Sacramento State’s College of Business Administration (CBA) played a major role in a recent study of the local minimum wage. This spring, Sacramento Mayor Kevin Johnson’s office asked the college to analyze the potential economic impact of a higher minimum wage in the city. The Sacramento City Council is scheduled to consider the proposal during its meeting Tuesday, Oct. 20.

The CBA's role was to serve as a neutral source of knowledge, advising the Income Inequality Task Force established by the mayor. The effort was coordinated by CBA Dean Pierre Balthazard, with Professor Min Li performing data analysis and Zack Snow, an MBA student intern, serving as a liaison between the city and the college.

Using data from the Census Bureau’s American Community Survey, Li constructed demographic profiles of minimum-wage workers in Sacramento. He also estimated the economic impact of three minimum wage levels proposed by the city’s leadership – $11.50, $12.50, and $13.50 – phased in over five years. Li concluded that the impact would be moderate, and presented his findings at public meetings of the task force.

“The involvement of the CBA in this minimum wage project clearly demonstrates the strong analytics capabilities at the College of Business Administration and our commitment to serving our community,” Balthazard says. Toward that goal, CBA will soon establish a Center for Business Analytics that will share the CBA’s downtown office at the Park Place Tower (980 Ninth St., Suite 2120) with the college’s other endeavors, such as the Center for Small Business.

Several other researchers and Sacramento business representatives also presented their findings to the task force, including Professor Michael Reich of the UC Berkeley Labor Center, whose study was commissioned by the Raise the Wage Sacramento coalition; Christopher Thornberg from Beacon Economics, whose study was commissioned by the Sacramento Metro Chamber; United Way of California; the California Association of Nonprofits; Sacramento Independent Restaurants; and the City of Sacramento.

On Sept. 2, the Income Inequality Task Force recommended that Sacramento raise its minimum wage to $12.50 by 2020.

College officials say they hope that the efforts of the task force and those producing the analyses will inform the policy debate on how to best address income inequality in the city, the state, and throughout the nation.

Gov. Jerry Brown’s recent approval of California’s own Earned Income Tax Credit (EITC) also may be an effective way to alleviate income inequality, college officials say, adding that other solutions, such as providing more affordable housing to the working poor and educating our young people for high-paying jobs in this “Big Data” economy, should not be discounted.

For more information about the College of Business Administration, visit www.csus.edu/cba/ or call (916) 278-6578. For media assistance, call Sac State’s Public Affairs office at (916) 278-6156. – Craig Koscho