 Representative Head is in a meeting right now. She should be back soon. Representative Gonzalez is taking this meeting outside. Representative Strong should be with us presently, as should Representative Christie. Good morning, Commissioner. How are you? Good morning, Representative. I'm fine. How are you? Good. Welcome back. Thank you. Do you know everybody here? I do. Do you know Edry? Hi. Hi. Lindsay Curly. Edry. Nice to meet you. It was appointed this year to replace Representative Gresham. Great. My life has never been the same. Mind either. You're not such a dear reporter, since I was. Dear Gresham, is irreparable damage? Oh. He'll talk off the record. That's great. We're here at the S40, which is a math related to increasing the minimum wage. And rules of the house, if people other, please, just when we do open up conversation or have open conversation or references or questions, please remember to identify yourself for the record before you start speaking. And the witnesses don't have to do that. But please share with us some. I mean, I imagine you have an opening statement to work with, and then we can go into questions and facts. Sure. So for the record, I'm Lindsay Curly, Commissioner of Labor. And I have with me today Matthew Barowitz, Economic and Labor Market Information Chief for the Vermont Department of Labor. Good morning. That's a little full. I just got that down, though. So I want to thank you for having us here today. Matt will explain to you that he was involved in the study committee, although wasn't necessarily asked to provide comment on the study and what they were speaking of during the study period. But I'll just put right up front that we certainly don't disagree with the intent of the minimum wage proposal. That being said, I will just clarify that the administration is not in favor of doing this increase at this time. I really want to let Matt speak to that because it's economics behind it that I think explained why we're where we're at. So. Good morning. Thank you for having me. So I'm here to share just general observations about the minimum wage, answer questions. This was Representative Stevens indicated I'm sure there'll be questions and discussions. This particular conversation is a challenge to me. One, because of time. We have potentially an hour. And the avenues of which we could take this discussion, whether it's economic theory, whether it's current economic conditions, or whether it's outside the realm of economics could feel that hour, no problem. Concepts, stories, everything. So this idea of this quick discussion will do my best to speak slow so that I'm not rushing because I have mental overload when the concept of minimum wage is introduced. I've been practicing economics as a professional for going on 13 years now. I'm a master's degree in economics. And one of the things that is in nearly two decades of studying minimum wage is that there is nothing that is conclusive out there to my satisfaction that indicates if you do X, Y will occur. And discussion today I hope will kind of illuminate some of what I think to be the fuzzy points around what minimum wage and what minimum wage doesn't do from an economic standpoint. Stepping aside clearly that this is also a political discussion. This is also a social discussion. There's many aspects to this conversation. So I'm solely speaking as the role of an economist. The role of an economist I take very seriously. And that means that my role is here to provide information. I'm not here to tell you what to do. I am not a politically appointed position. I've been through three governors. So this is my third governor. The administration has a perspective. And Commissioner Curley is here to share the administration's perspective. I'm here to provide information to help you make a decision because you have a decision in front of you. As the commissioner indicated, I was Labor's staff person to the summer study committee on minimum wage. I did not have the opportunity to participate that in that summer study committee in an active way. But I was witness to the discussions that took place from seeing that discussion, from seeing the end work product, certainly want to commend the summer study committee for the work they did. I do feel that there was one particular question that was left unasked. Much of the summer study committee's focus was on what will happen if we raise the minimum wage this way. One question was not asked is, what has happened since we've increased the minimum wage the last three, four, or five times? Because we are currently operating under a legislative past minimum wage that has increased the minimum wage over the last three, four years. And my question, and I have as many questions probably as you do, about the intent of this bill, because as the commissioner said, we certainly, I think the spirit behind the bill is one we can all get behind. We'd love to see the well-being of our monitors improved. But if this minimum wage bill is meant to tackle affordability, if it's meant to tackle poverty, well, we have data, we have discussions from our recent past of other states and counterparts that indicate those linkages are not clear. 50% of people under the federal poverty line do not have any income at all. So no W-2 income. So if we raise the minimum wage, that will not impact those individuals. So nonetheless, if we are trying to improve the well-being of individuals living in poverty, we need to come up with another strategy for the whole other 50% of that population. In addition, what I'm seeing, and this is where I can either go into the theoretical or I can go into the practical realities of what we've seen in the last few years. The Vermont economy has benefited from a massive US economic expansion since 2010. We've had robust economic growth from the standpoint of duration, not in terms of absolute growth. But over time, we have creeped back and slowly improved. And as a country, we are better than where we were in 2007. But that is not the case for all parts of the country. And that's not even the case in all parts of Vermont. I'm not sure how many people saw the last press release. That was released Friday from the Vermont Department of Labor. But there are indications in there that there are structural stress starting to show on this current economic expansion. So I find it, there's a lot of talk in the Summer Study Committee about getting to this 1968 equivalent of the minimum wage. Well, in 1969, there was a recession. And so if we are at that point, again, where we're looking around and saying, oh, 2018 looks great, we could be facing another recession. And I'm not saying we will, but in the next six months, one year, two years, we're already reaching the second longest economic expansion in US history. Vermont is not an economic island in that we are subject to the US headwinds. So the one thing that has concerned me most, and I can certainly pass these around, or just use it as an illustration, but this economic recovery has been urban-based across the country. The biggest urban areas have seen the greatest economic gains. Rural parts of America across the country have not seen their economic prosperity increase. And when we look at Vermont, it's no different. We used to talk a lot about how, I'll just hold this up for this standpoint of entertainment. We used to talk about the purple line being Burlington doing so, being so successful, and the red line being the rest of the state if you take Burlington out. We just recently re-benched marked our 2017 data, meaning we put out a monthly estimate, then we go back a year later and true it up. We found out that the rest of the state, meaning not including the Burlington labor market area, which includes some of Franklin County, some of Addison County. Would you like me to just pass these out? That would be fantastic. I'm lost a little time. I do not. I don't know what's already in record from my previous discussion. Nothing, oh, OK. I didn't know how this was documented. Sorry. So when we re-benched marked and re-looked our 2017, the area of the state that does not include Burlington labor market area, which includes some of Franklin County, some of Addison County, basically over to Waterbury in the northwest corner of the economic hub. The rest of the state we thought was getting back to where it was in 2007. When we went back and looked at it, you can see that the red line is barely is not even getting back to the zero line from where we were in 2007. So if you remove the Burlington labor market area from the Burmont economy, the rest of the state in 10 years is not back to where it was in 2007 as a whole. There's pockets that are going to be up, there's going to be pockets that are down. Now, if we look at this last release of the Burlington labor market area, you see the purple line taking a sharp decline. And that's what was included in the last press release, indicating that Burlington labor market area as an area is now over the year down. Our largest economic engine, the current estimates indicate is down 1,200 jobs from the previous year. So as an indication of the well-being and economic health of the state of Vermont, we're starting to see signs of stress. And I'm not saying, again, I'm repeating, I'm not saying there's going to be a recession today or tomorrow. I'm saying we're seeing an indication that there could be stress, as this is the second longest economic expansion in US history, that we could be facing something. We could plateau off and then skyrocket up. This economic engine could find more fuel to keep going. But we have indications right now that that is not happening. Hi. Sorry, Matt. I guess I'm trying to understand this document in relation to what you just said. This has nothing to do with what you just said about jobs now. Yeah, sorry. I didn't get very much reader guidance again. I'm worried about time. I'm just wondering if you have any, if the support, if you have information about the current situation as well. But yeah, give us some guidance to this. Sure. So left to right is time. So it's months. Up and down is percent job loss. So what this is is a benchmark data point starting in December 2007, the last economic peak, and says what happens from 2007? And we put it in percentage terms so that we can look and see relative to each other, relative around the zero line, are we gaining, meaning above zero, or losing relative to December 2007, the last peak? And so when we hit the recession, the state had a very tough time. The US economy, the blue line drops down to losing six out of every 100 jobs. Significant recession. In Vermont, the green line, we lost four out of every 100 jobs in the US economy, or in the Vermont economy. When we separate the green line into the purple line and the red line, you get this two parts of the state. The Burlington labor market area, which accounts for about 1 third of the population and 40% of the business activity. And you get the rest of the state or the balance of the state, which is the red line. So this red line is everything outside of the Burlington area through to December 2017. Yes. Okay, that is illustrative. Thank you. Tommy. I think it strikes me that you're showing one metric here. Jobs, number of jobs. Yes. But how does that relate to unemployment? That's a great question. I would love to see some trending lines for that. Sure, I don't have that with me. The unemployment rate is low. We have one of the lowest unemployment rates in the country. We are experiencing downward pressure on our labor force. So the labor market right now is tight. As it relates to that trend line, it would look similar, except it would go the other way. The unemployment rate would get high during the recession and drop down. So we're at about just under 3% right now. I will talk a little bit about the household outcomes. So I think one thing that I think you'll hear in these discussions. I just have one more question about the methodology here. Sure. So a year ago, if you were sitting here a year ago talking about these same statistics, you would have been truing up 2016 numbers and then making an estimate of 2017 numbers. So now we have this. If you have an estimate from 2017 and now you've trued it up, what was the difference? We were overestimating in certain months anywhere from 2,000 to 3,000 jobs. And it should be noted, there was a recent article by Art Wolf and the Berlin Free Press on this. The Vermont Department of Labor is a partner to the federal government's Bureau of Labor Statistics. Our ability to influence the Bureau of Labor Statistics methodology is new. So this is coming from DCs, their methodology, their definitions, their survey. And then it's trued up to what you get from your own numbers. So if you're using US methodology but then you go back a year later to find out what the actual numbers are. Right. So I just want to point out while we're having this larger conversation that we make policy based on estimates that are provided to us from government and to do our work, part of our research. And so it's just an interesting concept now to go back to real numbers that were pretty accurate last year as estimates. And now we're finding out that they're not. So does that mean our policy was wrong a year ago? Did we go into making policy wrong a year ago? And how should we adjust that now? I just, that's a methodology gap that I'm gonna struggle to get across. Yeah, and I would love your feedback so that I could share it with my federal partners because we've expressed our concerns about this to your point, the specific question. No, I don't think it would materially influence the conversations last year because the general trend line was the same even though there might have been a little bit of overestimating the positive line was still there. What we're seeing now is we could be facing a turning point and if we are facing a turning point, these surveys are have a tougher time catching turning points and that's what we're potentially seeing when we went back and we said, okay, we were a little hot but when we brought it back down and actually crossed the zero line there were slightly overestimations both in the Burlington area and in the rest of the state of Vermont. And so that's what's brought them both down pulling the state still below zero line and then the Burlington showing over the year job loss. And when you talk about losing 1200 jobs, which jobs are they? We are currently investigating that. This is new information as of Friday so we are working with our federal partners to better understand what these are. At the sub-state level, we don't have as much detail as we do at the statewide and so we're trying to dig in to understand better what's happening in the Burlington labor market. So this is all emerging. All right, so when we say, again, when we say we lost 1200 jobs last year when there's add-ons, we lost 1200 jobs. In the Burlington labor market area? Burlington labor market area. We don't know if we lost 1200 banking jobs, 1200 waiting jobs, service jobs or middle-class, we don't know anything about what those jobs are. We just have numbers. At this time, yes. Okay, thank you. Best I have. Brian and then Representative Smith and then Representative Walsh. Do you think that perhaps some of the job losses are due to contractors laying off the water type of thing or do you take that into consideration? Yeah, that would be taken into consideration because we do take into account the seasonal variability of certain industries. So we know construction and we know lesion hospitality of certain patterns. The paving company is in like that layout for the water. Something that was helpful to me just to clarify is when we talk about jobs that are lost, it's not that we don't have jobs, it's not that jobs are going away. That number is reported as people that are filling those jobs. So I didn't want, for me, I just wanted to clarify that it's not that companies are just wiping jobs away at this point. In theory, right, to add on that, because these are a count of people on payroll. It's possible there's 1200 open positions that weren't there last year and that Burlington is just having difficulty recruiting. Which is to bring us back to this conversation, as an economist, what we're trained is to allow the market to take signals. So there, if there is a labor shortage in Burlington, Burlington employers would take that queue and raise their wages to attract talent. And so what concerns me is that a minimum wage is a blanket change to the prices of labor and price control is not something that economists are typically very comfortable with. And for those, just to piggyback it, I see a lot of similarities in the discussions right now about starting a trade war. When the United States announces we're gonna enact tariffs on certain countries, what they're talking about is reducing competition and increasing prices. And in many ways, Vermont as a small island would be signaling that we're gonna increase prices and we are gonna try and, but the United States economy has enough diversity to be self-sufficient. If we ended up closing all our borders, we probably could provide for much. Our diamond supply would probably run short. We probably would do well for energy for a while, but there's certain things we do import technology-wise. We'd probably go back to bigger cars because we like to design them that way here. But there's no end to hate by Vermont as it can't go it alone, so to speak. So in sense, I've thought about this as it can be considered akin to that because through discussions I think you'll hear that there's no dispute that this potentially would reduce the number of jobs in the state of Vermont. That's what you hear. There's potential job loss for this proposal. So then the question is what goes back is like, is there potential income increases for the individuals who keep their jobs? I also have indications to say that there's some questions about that. Specifically, there's two different, and this is two different sources. One from businesses saying how many hours people are working and the other one is from households from individuals saying how much they're working. And in both those surveys, employers in the private sector, over the last, and I have the data right here, they've gone down, the average weekly hours in private Vermont employers that work by employees has gone down to one hour. So it was 34.4 hours, now it's 33.4 hours. So they've lost one hour since 2008, 2016. So there's been a decrease in number of hours worked. My fear is is that concentration of average weekly hours is concentrated to the individuals who are the lowest skills. If you're a full-time worker or a high professional, you're not getting your hours trimmed from 40 to 38 or from 38, 35. It's the people working 35 that are going down to 29. And so... Tom, I'm sorry. We had two questions. Oh, sure. We're gonna make getting through your hour really difficult. Oh, that's fine. I just, yeah. Representative Walls. I'm sorry, I want to go back to the chart. Oh, sure. First of all, Burlington, I am assuming that means greater Burlington area. What kind of area is that? Sure, the Burlington, South Burlington labor market area includes much of Franklin County. Actually, now with the redefinition, it goes all the way up into Swanton. And then, Northern Addison County, but then Waterbury's kind of just nuzzles in there. Basically greater Chittin County area. Okay, which leads to my next question. What percentage of the job market is there? It's about 40%. Okay, thank you. Representative. I just wanted to make sure that I have this right. So that there was 1200 met job loss in Burlington area, but it's that companies are reporting that many lost people on payroll, but it's not necessarily the jobs are gone. They could be vacant. Does that include public employers as well? Yes, it's by place of... By place of employment, that data. So where the employer is located. And so, this is where it is a lot of information, even for me who's looked at this for going on two decades now, just trying to understand what the impacts of minimum wage are. Because when we look at how employers are going to react, the money's got to come from somewhere and employers are going to respond. In some ways that employers can respond is reducing hours, increasing or adopting new technology. And when the technology piece can be, I think that's one of the things that I think causes most people to pause is we don't know how technology will change. Small employers are not as equipped as large employers to handle this. Granted, I will be the first to agree in the short run, this will have less effect. But in the long run, employers are going to start making decisions. They're currently, I like to talk to employers to see what they think. They say how they would change their business model or potentially increase prices. But when you start talking to larger employers, they'll say, well, there's certain divisions that right now it's not even financially attractive to keep them in Vermont. We could outsource them, we could relocate certain arms or operations. The specialization, the future of where our economy goes. And as the prices change, that decision gets tougher and tougher. And so how technology is used, how outsourcing or other labor sources is used is a big concern. Because when I talked about the employers saying that people in the private sector are working less, when we ask people in Vermont households, there is a disproportionately higher number of people who say, I wanna work full-time but all I can get is part-time work. And so again, there's an indication, not only from the businesses brought from households, Vermont are saying, I would take more hours but I can't get more hours right now. And I'm a fear that as these smaller companies have less flexibility in dealing with some of these changes, larger companies, larger retailers specifically, they can invest in software that will actually shorten the shift. If they used to have four hour shifts, they'll now have shifts that are three hours because they realize there's only this peak hour. They have softwares that predict customer demand. So to the minute that they have actually more now on call workers, we've already seen the incorporation of self-checkouts and all of this is just how large employers can adapt to this world. Small employers don't have the luxury of getting a software model to predict when their customers are going here or do self-checkouts if they are the only one in the office. So on that, that has still has little to do or less of a percentage to do with wages. I mean, a large corporation that isn't headquartered here is gonna invest in software because they believe whether it's based on numbers or on policy that human capital costs too much. And if I'm a person who wants more hours but I can't find them because my job at a retailer said, well, I'm gonna only limit you to eight hours because I have to pay for your healthcare. I have to put you into healthcare. I mean, those are decisions that are made above and beyond actual living conditions for those workers. Those are decisions that are made up top that come down below. So how do we address, and I guess this is policy, so how do we address the fact that these workers can't find more hours? Whose fault is that? Is that their fault or is it the culture's fault? Until we know where these jobs are, how do we know who's gonna survive in Vermont on any wage? And if the job market is this tight, if the job market is this tight, if there's 1,200 opening, however, whatever those 1,200 jobs are, whether they're openings or whether they're jobs in positions that have been made obsolete through technology, I mean, that's a category that could be in that 1,200. But what do you say to those people if you're not able to provide them with work and then we wanna provide jobs that stay? I would just, I'll turn it over to the commissioner, I'll give you a segue, I'll set it up. Yeah, that's fine. I think the all fair points and the one variable in there that may be held constant in that discussion is human capital and I think that is very much a variable. How do you increase the skill set of the individuals to the jobs that are available? When you talk to employers, they'll say, I'll hire someone at this, but as soon as they can demonstrate, they can show up on time and work well with others, I can give them three other tasks, give them more responsibility, give them more accountability and allow them to earn more money, but it's this idea of human capital. Yeah, I was just going to say as a former employer where we hired people who would be in entry-level jobs, cashiers. We, as a business, we knew what we had to spend and as somebody really showed their value, we were more than happy to keep bumping them up, but we also had the pressure of as we add different costs, like you have to provide health care and you have the wonderful things that we give them, our budgets get tighter unless we start increasing our costs, obviously. And so, as Matt said, what we saw happen was we started cutting their hours because we only had so much money to work with and so we started cutting their hours. So it didn't, in the end, help our employees necessarily because we're shrinking what they're taking overall, what they're earning because their hours have been reduced. So I mean, I think that's like a big fear of mine in particular is that we want to give equal energy certainly to the employees and the employers, but Vermont is so full of small businesses and increasing minimum wage as it's proposed, if we had 10 employees and we had to pay them an extra $5 an hour over their full time would cost our business $100,000 a year. Now, in a small bit, I can tell you there's not even an extra 10. You know what I mean? So I just worry that the people that are providing the jobs are ultimately the ones that are going to pull back and stop filling those because it's too difficult. It's too much of a strain. And right now, where we have such a low unemployment rate, and as Matt said, the economy is forcing a business if they really want to hire somebody, they have to up the ante on their own. They have to make that decision on their own really to entice people. So I'm sorry. Yeah, and this, it kind of takes us back into the theoretical standpoint of, to the same I said before, money's got to come from somewhere. And in fact, like if this was, the proposal was designed to cure wage inequality or something, say that was a concern of yours, and you thought by raising the minimum wage, wage inequality would go down. When you look at the states across the nation that have higher or minimum wages or the federally minimum, there's no correlation in my mind about which states are doing better with their minimum wage loss. Looking to Hampshire, for example. But from a wage inequality standpoint, when the money's going to come from somewhere, say it comes from the pockets of business owners, which could be the goal or just the outcome, the risk profile for that individual is changed anyway. And so they're not going to accept more risk as a business owner saying, well now I'm going to increase my wages. They're going to have to subsequently offset their own personal choices and risk. And therefore we're pushing everything in the same way. So by changing the prices, which is again what wages are, it's the price of labor, I don't see us moving the needle towards poverty. In the last four years, we raised the minimum wage, last year's poverty statistics show that Ramon might not. I don't see, I'm looking for evidence of like, okay, what will happen? And I just, I'm not seeing it. So you said earlier that the question that was unasked was, well what happened? We had a question represented, it feels like a great question last week of saying, five years ago we had this conversation when it was 873 and we asked everybody for estimates on what it would look like to go to 1050 in four years. Do you still have those estimates and can you compare them to actually what happened? And does that inform your decision about how you make variables and how you make algorithms to decide what these numbers are going to be? That's a great question. Unfortunately it's not best directed. It may be best directed. The economist who did the analysis back in whenever that legislation was passed and I believe those talk to that who you'll be hearing from. But to that question, there was discussion that the cost of human services for state government would go down because people were going to be earning wages. Have we seen that manifest in state government? So, there's other signs and looking for it. Has incomes increased? Has poverty gone down? Has wage inequality decreased? Has affordability changed? I think about affordability as a big pot, half full of boiling water. And you're worried about the boiling water so you add a cup of cold water. That's temporarily gonna help your situation. But the more you add cold water, the conditions of the pot haven't changed and now it's getting more volatile because your pot is filling up with water and it's still boiling. It cools it down for a second but then it's coming back because of the same conditions. And changing the prices of labor are gonna increase the prices of goods and services across the state. And the indication that these people that are increasing their wages are gonna spend their money in the Vermont economy are true. But the things that you spend your money on especially in the lower income brackets are fuel, transportation costs, utilities, food, clothing. Many of those things, especially if you're in a lower income bracket are not gonna be affordable with the stamp Vermont made on it. I applaud anyone who supports it but when you're making those choices, if you were on a tight budget, you have to make those decisions. And so the economic leakages associated with the typical consumption patterns of individuals in lower income clintiles are gonna be economic leakages for the state. Representative Longs. So I'd like to follow up on your question and that would be wonderful to see based on this last day for me, 73 to 1050, what has happened to consumption? That would be nice to know. That's a great question. So if you could find that and what has happened to productivity and what has happened to the state's gross product. I forget what it's called by state. What are those other indicators? Not just the numbers of jobs. But I'm gonna add one more thing. I struggled a little bit with the logic of employers constantly decreasing the number of hours of work because there's a critical mass in which you can't perform your services if you go below that. Exactly. Yeah. Which I see cuts both directions. And it does. Absolutely. If you don't have enough cashiers or if you don't have enough people making the beds in your hotel and you're not gonna be doing the services, ultimately the burden comes on the consumer. There's no question about that. Yeah. And so I would like to see a correlation. What I'm looking for is more trends and what has actually happened in the past. And these are all fair questions. And I think, and this is the challenge, right? And so we had a summer study committee. They did a great job in answering the questions that were raised, but there were many questions regarding consumption that were not answered. There was many questions regarding what is the historical performance of Vermont then over these last five years? And so those were just questions not answered. But as it relates to wages and wage inequality, there are individuals that are gonna benefit from the technological revolution. And there's gonna be individuals, the job winners and the job losers or income winners and income losers based on this. And so there are certainly opportunities to continue to grow. And the people who benefit, when you talk about productivity, it's the higher income levels now that are benefiting most from productivity advances. Just because a computer processor can get an extra 100th millimeter, I don't know what it might be, but a computer processor goes a little bit faster. That's benefiting finance, right? That's benefiting high rapid transactions. It's not benefiting the cashier on the front line. Their benefit came in the 1960s whenever the cash register was invented and then their benefit came in the 80s when they invented the scanner. The frontline staff are not receiving the benefit of technological advances right now. They're actually feeling the direct competition of technology. And it's the people skilled enough to be able to leverage it. That's why wage data right now is so tough to understand because the way some people are getting 10, 15% raises year over year because of their productivity increases, because of their value to their company, because they're able to leverage the technology that the bottom line for their company grow. But that's not the everyday Vermonner on the front line saying I'm here to help you, I'm here to support. It's very tough. One more, I think just one more question that I have on this chart. This chart starts in December of seven and everybody's given the same value basically on that chart. Recession begins, what happens? So the United States drops 6% in two years. Since then, it's gone up 6% and changed. Does that mean it's the mean number of jobs go back to what that zero number is then? Is it? Pretty much, except you get the order operations problem. Like if you ever had a 10% loss in your retirement account, you get 10% back, you're still under, you know what I mean? Sure, 10% down always hurts harder than 10% going out. So technically we're still all behind from what we were in the- Yeah, I think the US is probably right back to a rate there. I think I saw that announcement. But again, there's certain pockets of the country that are not, that's a universal blank. And traditionally, Vermont has never, well, it has gone, but it always goes at a lesser curve. Doesn't get too high, it doesn't get too low when we have these booms and busts. So in the end, what does that mean for the green line? I mean, it means that, I mean, to me, it looks like it's somewhat sluggish, but not so different from traditional curves. And I just, and I don't see any traditional curves on this chart. Yeah, the, you know, we are back above the employment level where we're in 2007. Oh, and to answer your question, actually I got confused about that. 6% down, 6% up. The 6% down would have taken you to the blue line at the bottom of the recession, the 6% up would have taken you to the zero line and now there's 6% beyond the zero line. 6% up, okay. Yeah, so they've kind of, you know, down six up 12. So they are, the US as a whole is well above the employment levels. And as you said, you know, I've talked about that in the past where the Vermont economy is quite diversified actually. People don't think about the Vermont economy as diversified, but we have a higher concentration of manufacturing employment in the state of Vermont than the US does overall. We have a higher concentration of government workers. Some of that in part to our public education, but a good part of it also has to do with the federal government and the border that we share. So, and then we still have leisure and hospitality. We still have agriculture, professional business technical service. So we have a little bit more diversification. Healthcare, private education gives us a little bit more. But the green line, which you described as sluggish, you know, economic growth, traditional economic growth theory, and again, I'm not saying that this is the end all be all or the lens that everyone should fine tune their sight towards, but traditional economic growth says it comes from only a couple of places. One, natural resources. How are we gonna use our natural resources differently or are we gonna find some that we didn't know existed? Two, technological advances, which is again, going to productivity and how can we benefit from increase in productivity due to technology so that the standard of livings of all can increase? And then three is population growth. If you wanna grow an economy, you grow the population. That's one of the traditional metrics of economic growth and for the state of Vermont, we have not been growing the population. So our population is very stagnant. So I think this green line that's since kind of plateaued since January or April, 2015 in this graph, it kind of mirrors our population in many ways. It's just like we've been flat. In the last estimate by the census actually shows it's going down, which is the first decline in a while. But hopefully that's just a spot estimate that gets further revisions. Thank you. So, without additional questions, I could continue. I have another, I could talk just differently about what this graph is. I think, Ron, did I give you this one too as well? Yes, it's okay. So as the Department of Labor, we serve as all Vermonters and we're happy to work with employers and employees alike. And so what we have here is kind of a really rough depiction of what I consider to be the labor market where you have the cello-shaped figure representing labor supply, where we have a concentration of individuals at the top that actually have higher skills than potentially are necessary in the labor market. You can think about like, if you have a PhD in philosophy, if you are not a professional philosopher or a PhD, or teaching philosophy, perhaps your PhD in philosophy is skills beyond what outside the labor market would seek, right? We also have a wide body at the bottom of a lower skill, individuals who haven't gone on a complete bachelor's degree, maybe not even completed post-secondary education, lots of opportunities within there. The diamond represents the traditional staffing pattern of an employer, where however we change the economy, at the end of the day, there's always gonna be one owner, or typically one owner, and then they have their core of middle management or professional expertise, their lawyer, their HR personnel, and then you have middle management, and then you have frontline staff, and you're always gonna have more ditch diggers than foremen on the job site. So what this represents is how the staffing period requested by employers are hiring, and what worries me is part E, and that's why I want to kind of highlight, because the Department of Labor, we work with individuals. There are individuals in the Vermont economy right now that cannot get employed at $10 an hour because of either whether it was barriers to entry, skill deficits, a myriad of reasons. What minimum wage does in my mind is actually just raises this bar up. The bottom line moves up, saying, because there's a price, there has to be, for an employer, there has to be a return to the investment of wages. So we're potentially increasing. Do you mean the one where that E is pointing to gets bigger, the part of the yellow gets larger? Yeah, because you're gonna move the resolution. The red line goes up, and the nose below, okay. Because employers are gonna be faced with those choices that we discussed earlier. How am I gonna deal with the changing in labor costs? Is it through reduced hours? Is it through fewer staff? Is it through new technologies? Is it through shorter business hours? Is it through price increases? And to the ones who can pass on prices successfully, that's what they'll do. But others, where in a much more competitive environment, when you think about small retail, who's now competing with the global market, there's gonna be some challenges. But when I think about the people, because that's what we work with, and I'm exposed to it all the time, it's like, we're trying to advocate and champion individuals to get them employed, and they're having difficulty locking down a $10 an hour job, and now $10.50. And a change in the minimum wage makes this population, I worry again that we're gonna be separating the population and the people who are already able to succeed, and the people are not, and we're gonna be increasing the people are not. And so, I'm not saying, I'm identifying areas that would need potential policy assistance from you. This is what I'm asking. There are gonna be verminers who will not benefit from this change, potentially. And those are individuals that would need assistance, and some of the most critical in need, as it stands now. Can you repeat that number at the very beginning? And I think this is actually, I think what you're talking about here relates to what you said at the beginning about poverty, and the number of people in poverty, or the percentage of people in poverty who have no income at all, so the minimum wage wouldn't help at all. Can you tell me what that number is again? Yeah, our rule, of course, it is a 50%. 50% that are households below the federal poverty line have no W-2 income as it is. So, again, they might have very good reasons for that, and they might have barriers to employment, they might have significant, and they're probably, yeah, right. Making ends meet in other ways. And along that line, making ends meet in other ways, is that I think we, there's two things that also frighten me about the minimum wage changes. One, it is my belief that it'll increase the number of unpaid internships, because, you know, which, something that the Department of Labor does not believe in, because you don't know what it creates. Employment opportunities based on economic necessity, or economic need, oh, I can qualify for that free. Right, I can work for free, but the person next to me can't work for free, so they don't have that opportunity. Right, so, unpaid internships, I believe would be more common. You know, I'm potentially, I'll sit up with college courses or credits, but an income, a wage. And the underground economy. Represent a few. Was that 50% of Vermonters' goal, the federal poverty line? Yeah, yes. So in changing the incentives for the underground economy, or, you know, challenging the new modern definitions of like the gig economy and figuring out how we can separate the employer from the employer through three different means. Do we have a official definition of what underground economy is? A legal activity, that's different from the gig economy, which the Bureau of Labor Statistics is gonna be releasing their newest study on what's going on with what they call the contingent workforce. But the underground economy is exactly that, they don't answer surveys very well. So we don't, we don't, we don't. We're really wild, we're overtaxed, we're worse. Yeah, yeah. But I did live in France for a while and they even have a word for it, which is what I thought was fascinating. July 1st is coming, though. Pots could be legal. So as an economist, I guess, if I was just gonna wrap up to give you the opportunity to conclude, I thank anyone who remembers their first job and starting minimum wage, potentially, and that first increase in your wage, your first raise. That's an important market signal that young people, or people new to a career, take and they build off of. Wage compression will dilute the ability of employers to have the sensitivity to award certain individuals higher wages because of performance. And it's diluting a market signal that is a key market signal in my belief that more skills, better professional attitude, or better professionalism will lead to higher wages. And as we compress it, and as it gets more challenging on the front line to distinguish who's in charge and who's not because of changes to price of labor, I think that's an important signal that's lost on young people as they build their professional acumen. One question we had last week as we were starting to take testimony and the question was kind of punted to labor was there's a discussion or an argument that if I raise my wages up to a certain level, then the people who formerly made it up to that level based on the old levels, I'll have to raise their income up that high. So in this last five years since we've seen the increase, do we have the ability to find out what happened? Did those salaries indeed go up from, if I was, when minimum wage was $873 an hour and I was making $11 an hour now that it's $10.50 an hour, did my wages go up to $14.50 simply because of that or because I've been there for five years, whatever, can you determine how much more salary is being paid out at a level higher than the minimum wage than was, but what it compares to five years ago? That's a great question and it would be a pretty significant research task, but it's a question that as my knowledge has not been asked and therefore has not been researched. So I don't know what has occurred on that front. And we heard that Washington State can break down hours because they rose their income, their minimum wage so high so quickly or so quickly and then, but they can break it down by hours but we can't, is that right? Yeah, I know my counterpart in Washington the reason is is because their formula for calculating unemployment insurance benefits requires that information to be collected. Our calculation does not require that information to be collected, so we do not collect it. They're one of the few states that has that. Any further questions for the commissioner or for Matt? Thank you. 50 minutes. That was, that was exceptionally helpful. Thank you, that was really informative. Thank you for having us. Yes, thank you. Thanks. Good to see you. All right, next up on our list, we have Stephanie Yew from Public Accounts Institute. You know, from Tom Kovat, is he on the phone, or is he on the phone? He's supposed to be coming in. Okay, I'm not sure, you've testified before us, I think in Room 10, but let's introduce ourselves, to just let you know who we are. That'd be great. All right, I'm the non-representer of Tom Stevens, I'm Vice-Chair. I represent a very competitive dual-store in Bolton. Okay. Helen Hadzapero. Mary Howard. We'll go, we'll go the wrong way. Mary Howard, Rutland City. Ed Reed-Faithson. Tommy Walts, Berry City. Freddie Sherman Stoke. Brian Schwedt, Blue Nervy. Vicky Scrogg from Albany. Rachel Gantz from London. And Deanna Gonzalez, who would be here, is from Rolinski, and Coach Christie is from Hartford, so we're very geographic, and split up. Okay, well, I appreciate that. So I don't, do I have the ability to click, or does somebody else have the ability to click? Oh, Mary, okay. So, so just to introduce myself here, I'm Stephanie Yu, I'm a policy analyst with Public Assets Institute, and we are a public policy think tank here in Montpelier. We're non-partisan and non-profit, but what we do is we look at Vermont tax, fiscal, economic policy, particularly through the lens of how it's affecting low and moderate income Vermonters. We have counterparts in most other states, but we work here in Montpelier, and like I say, we look at state level fiscal policy, particularly through how it affects ordinary Vermonters. And what we do is we spend a lot of time in some of the databases that Matt was just talking about, looking at jobs related stuff, BLS, Bureau of Labor Statistics, Bureau of Economic Analysis, IRS information, census data, all that fun stuff. And so, and our goal is usually to kind of translate that information in a way that people can understand quickly, you know, keeping it in chart format and looking at sort of ways that, to kind of distill that information down into something that's easily graspable, more easily grasped. So, and part of why we do this is because we believe in what you passed in 2005, which is the purpose of the state budget, which is to address the needs of the people of Vermont in a way that advances human dignity and equity, and that those spending and revenue policies should recognize every person's need for health, housing, dignified work, education, food, social security, and a healthy environment. So, and when we do this, we kind of, we go through regular reports, and so we do a monthly jobs report, so some of the jobs data that Matt was just talking about when it's released monthly, we also look at it monthly and release a report on that, and then every year we also do our state of working Vermont report, and that comes out at the end of the year, and it looks at a lot of census data, but also a lot of IRS data, and really looks at literally the state of working Vermont, or maybe more accurately the state of working Vermonters, so looking at both sort of labor force, but also how that's affecting families and their ability to make ends meet. So a lot of what I'm gonna talk about today comes from that. I did, I just, I was taking notes on my phone just because it's crowded in here. So I just wanna, I wanna kind of raise a little bit of a question in response to some of what Matt was saying, which is, I think a lot of what he was talking about was sort of concerns about sort of how the wage market works in general and what that looks like, and I think from my perspective, I would just take a slightly different approach to it, which is for the question of whether we should have a minimum wage at all, and so if the question is, if you believe that we should have a minimum wage, then the question becomes what's the right level? And so is, are we due for an increase or not? And so I think that's really sort of the focus of what I'm talking about today. So the, so my testimony today is really focused around three main points. First, that income inequality is rising in Vermont, and that that's bad for Vermont and for the Vermont economy. Two, that there are many families in Vermont struggling to make ends meet, including many middle-class families. And then three, that by any measure, the power, the buying power of the minimum wage is shrinking, and so we need to get it back to a livable wage as soon as possible. So this first slide, so some of, so a lot of these slides, these charts that you're gonna see come from the last two years of our reports, 2016 and 2017. Not everything is, not all data sources are updated annually, so some of this, we just, you know, we have the most recent data available, and that's where this comes from. So the first thing to note is that where economic growth has gone and who's benefiting from economic growth. So these particular, the reason that we have these time periods is those are the post-recession expansion periods. So as the economy is growing again after a recession, where is the economic growth going? And you can see that, so the red, the red bar is the top 1%, and the orange bar is the bottom 99%. So since about the 1970s, you see that the majority of economic growth has gone to the top 1%, or a disproportionate share. There's only been a little, a short period when it was actually more than 50% of growth was going to the very narrow top 1%. And so you can pretty clearly see that trend, that since the 70s, that income inequality has gotten worse. So for the, and we know that the most recent actions in Washington are only gonna make this problem worse. So if you go to the next slide, then the, this kind of just gives you a perspective of what that means. So this is the top 5% of remonters earn 12 times as much as those in the bottom 20%. So almost $300,000 more a year. This is for a family of four, but that just gives you an idea of what we're talking about. 100% of the three, thank you. The first, not that slide, but the first one. There's that one period, move it 2001 to 2007. And then it looks like it corrects itself. So there's no updated data past 2012 on that. So 2012, so that's right. This is the most recent period. So that's the beginning of the expansion of after the Great Recession, but we don't have anything more recent than that. But I think one of the issues, part of the reason that that's true is that in this particular period, it took the stock market longer to recover, which often is part of the income sources for people in the top 1%. It's not, obviously it's not just wages that's contributing to their income. So that took a longer time to recover. So it was more depressed. But this is the most recent information that we have. Do you have an analysis of why there was that just about one time from 2001 to 2007? Where it went to 50%, you mean? Like I say, there were a lot of factors. I do think that at that particular time, like I say, a lot of it depends on sort of what the stock market's doing because that is a big chunk of what the income is at for the top 1%. So it just happened to get that high. I think you can sort of, you can see that that trend since the 70s has been a bigger share is going to the top 1%. So going back to the meeting's finished, and then if you can go to the next slide. So that pattern, so this is a little bit more recent information. So this goes through 2014, but what we were looking at was just what's the income growth for the top 1% and the bottom 99% post the Great Recession. So you can see pretty clearly that the top 1% income is back to growing much faster. So more than four times as fast as that for the bottom 99%. So, and then on the next slide. I think before you go though. Is that annual growth or is that just total? That's cumulative, and that is adjusted termination. So then I think this is, this also sort of gets to the same point, which is that it took much longer for low and middle income for monitors to regain the ground that they had lost during the recession. So for people at the bottom, their wages dropped well actually shrunk quite a bit. And that we've just now, just now, and this goes through 2015, just now sort of gotten back to where they were previous prior to the recession. And so this is, so that red line bottom 20%, the sort of blue line is middle 20%, and then the top 5% of wages. So you can see they didn't have the same falling off during the Great Recession, and then have grown much more quickly since then. They didn't have any fall off. The top 5% had growth. Right, it wasn't steady growth. You can sort of see what was happening there, but they didn't get below where they had been, right? So that's a big difference. So on the next slide, this gets to median household income. So this is adjusted for inflation, and you can see it's been relatively flat over the last 20 years, 30 years, really. So on the next one, and just to sort of make really hammer this point home, again, this is average household income by income group and proves growing. And so this is between 2006 and 2016, the top 5% seller incomes grow by 42%, the bottom 20 less than 6%. But I kind of want to, I want to put some numbers on this because I think the percentages we're trying to compare sort of the growth rates and to see who's growing faster, but I think in real dollar terms, this is really, it gives you a sense of what we're talking about. So for the bottom 20%, that 5.8% growth was $700 a year. For the top 5%, that 42% growth is $95,000 a year. So that's a pretty big difference. So a raise of $700 versus a raise of $95,000 for those at the top. And again, just to acknowledge sort of what's happening in income, it's not all wages. This is an all wage related. So income does include capital gains. So those people at the top, a lot of their income is coming from other sources other than wages. But for the bottom like about 75% of households, they really only have wage income. That is their wages and income are pretty much the same thing. But that is part of what drives that income and quality is that investment piece, that capital gains piece, those other sources other than the wages. Is that that available? That it would just be wages? And I asked just because it makes it a lot more germane to the minimum wage. So this next slide, I hope gets to some of that conflict. Before you go to the next slide, there's 20% or more missing in the bottom 20, middle 20, top 20. Where's everybody else? Right. So we didn't put them all, the charts starts to get pretty crowded, but it's a pretty steady increase. There is some sort of ups and downs in volatility in there, but it's pretty much the bottom grows slowly and the top grows the most quickly. Are there people missing from this chart though? Right, these are just the relative, these are just the slices that we want to call your attention to. I mean, like I said, I can give you the rest of that information, those sort of other quintiles if you're interested. Are these Vermont numbers? These are all Vermont numbers, Vermont specific numbers. And do you, in your information that you provide, do you break it down by the tax department? We can find out how many people are in the top 5% or the middle 20. Right, and I can provide that too if that's useful. So obviously we're talking about, these are quintiles so that it's 20% of households, but for your information, two thirds of Vermonters, those households you're falling below that $75,000 in household income. So that kind of gives you a ballpark of what we're talking about. Thank you. So on the next slide, this gets to, I hope this gets to your question, about wage growth. So again, that unearned income piece really does put a lot of that sort of top 1%, top 20% or even further up because they're getting this unearned income, but just on the wage piece. So, and again, a lot of the income stuff that we talk about a lot of times is household income. And so if it's household income, there may be one wage earner, there may be more than one wage earner. So when you see that sort of $300,000 number for household income, that may be one or more wage earners. Whereas the wages, when we talk about wages, we're usually talking about sort of a per person wage. So this kind of gives you a better idea. So that's why when you start to talk about like the 90th percentile of wages, it's a much lower number than that 90th percentile of income. But so this is wages. So if you look at the 10th percentile of wages versus the 90th percentile, which is like greenish-yellowish line, it's about $80,000 a year. Whereas at the bottom, you're talking about $20,000 a year in full-time wages. That's a 10th percentile. So, but the other point again is sort of the way that they're growing. So the bottom is staying pretty flat, the 90th percentile is growing up. So even when you take unearned income out of the picture, you still see this disparate growth in the different groups. I'm sorry, group's at a moment. I would like to see the impact of inflation in that chart. So this is adjusted for inflation? Oh, sorry, I didn't mean that. No, no, no, no. So that does account for that. So I think that's part of it. So this is staying relatively flat. And again, I would just point out that sort of the, even if they're growing by a certain percentage, what that means at a low-wage job is going to be significantly less than what it means at a higher-wage job. So we sort of want to balance how, you know, our comparisons with sort of the nominal ballers that people have to spend. So- I'm sorry, representative Reed. Can you tell me or do you have a comparison with that or how it relates to the U.S. average? I can't. So where mom generally is above the U.S. average in sort of wage and household income. There's some pieces where we are, not at all levels. So Vermont tends to have a smaller spread from top to bottom in a lot of states. You know, we're just, we're a smaller state. There's not as much, you don't have these sort of hedge fund billionaires sort of stretching that top part out. So we do have sort of smaller compression, but on average, our wages are higher, our minimum wage is certainly higher than average. So, you know, there's, you know, but Vermont does tend to have a better educated workforce which translates into, you would expect would translate into sort of higher average wages. Not always true, but they do tend to go together. So I think the main point from that slide is that this idea that increasing the minimum wage would in fact lead to a fair distribution of the economic gains. So if all the economic gains are going to the top, then lifting that minimum wage really does sort of force some of that economic gain down to the bottom. So from any angle, income inequality is really getting worse and that's what spread is getting greater. And in fact, some of you may remember the Federal Reserve of Boston did a study in 2007 and found that Vermont had the second fastest highest growing, second fastest growing income inequality in the country. So even though our spread is not as great, the rate at which it was getting further apart was faster and that's continued to be true. So can you, I realize that one of the stated goals of this is to reduce income inequality, but it was made clear by the economists that there's no evidence that that would actually happen. I'd like you to address that. Is there actually evidence that it reduces the income inequality? So yeah, well, I think there's no evidence that doesn't. So I think there is evidence that it reduces income inequality. We can show we've increased the minimum wage over the last four years our income inequality has increased. Well, but the income inequality has been increasing for much longer than that. And I think part of the question is, by how much? Is it doing enough to reduce income inequality? And I think that's part of the question. When we're talking, when we get to some of these measures in terms of livable wage and the fact is that some of the increases that we've had in the minimum wage in the past haven't been sufficient to narrow that gap at all between what's livable wage and so what it means actually means for people at the bottom. I think there's also this issue of, we do have, again, sort of a lot of those gains going to the top, which is continuing to happen. So we could get into a whole separate conversation on sort of income tax changes and what's been going on with that and in what ways that's contributing to the income inequality. So there's a lot of other factors that play beyond just the minimum wage and I don't disagree with that at all. Virtually not strong. So when you talk about changes from Washington, et cetera, what I'm reading, it's more and more, almost every day, our ability for companies and businesses to give more wage to their earners, to their workers and increase benefits because of this. So why am I hearing very different things? Where I'm hearing positive changes will improve people's quality of life and raise their incomes overall. Why am I hearing two things? Well, I guess some of it depends on who you ask. I do think that there's a real question about what, when we talk about the federal tax changes in Washington, what's going to happen next? I think there's been a lot of signals that what's going to happen next is that the way to pay for this, for some of these tax cuts is that services will get cut. So that's one question. The other question that I would say is when we look at, so we've done, we've looked at, there's been a number of groups that have done analysis of what those tax cuts will mean and where those tax cuts are going. And there's pretty strong consensus that the vast majority of those tax cuts, so about two thirds of the total tax cuts are going to the top 20%. So that's increasing the income. Now some of it's corporations, but ultimately I think, and Matt, I think acknowledges this well, is that companies are always gonna be looking to decrease the cost of labor. So you can talk about tax cuts and what that might look like and whether that there might be the ability to trickle down and some companies may. There may be companies that choose to push those benefits down. But I think the goal is always gonna be that there's this push to decrease the cost of labor. It tends to be one of the biggest costs for businesses. So unless there's sort of a countervailing pressure to keep those wages up, you're gonna have this just moving in one direction. So I think part of the question is, how is this gonna play out individually? And these trends are sort of lots of individual businesses making these decisions. So each individual business may handle it differently, but the broader trend is that we're seeing that the vast majority of these benefits are going to the top. We've been told that there will be services that will get cut. That Vermont's state budget, you all know this, is 35% federal revenue. That pays for a lot of the programs that support Vermonor. So if that cut happens, there's just, so I think part of the question is what's happening at the federal level is sort of taking money from services for vulnerable people and bringing it up to the top. I'm giving it as tax cuts to the wealthy. Now, I think you can argue the question. I think there is, we were having this conversation the other day in a meeting where you can sort of argue the cart before the horse question. Do you need economic growth before you can sort of invest in people or do you need to invest in people to get economic growth? And our argument would certainly be that you need to invest in people to have stronger economic growth because there is very strong evidence that income inequality reduces economic growth and that the worst income inequality is that not only does it cause poverty and reduce economic growth, but there's also sort of a whole host of other sort of health and social issues that come with that. So, that's sort of our perspective. But I understand the other perspective as well. I'm fascinated by your little box and the bottom right-hand corner here and I'm trying to, first of all, I'm trying, oh, thank you, I don't know how to get this. Tomorrow, what up? What is weighted average threshold? What does that mean? They just look at it in terms of the share of families and better in these different categories, but bottom line is this is the poverty level for these different family sizes and family types and so it varies. So you can see what the poverty threshold is. So the main chart on this page is really just looking at the poverty rate in Vermont over the last, I think it's 10 years. But these are the poverty levels. So for a family of four, it's 25,000. So there's some other challenges, how we establish those poverty levels and what that might look like and whether or not that's a reasonable measure of poverty levels. But this is what the federal government uses. My question is, what's the weighty? Oh, I don't know what. I could pull up. What's the methodology there? So this is just based on? Something is being given more. It's based on the share of families that are in those categories. There's a couple pieces to it, but I can pull the kind of formal definition of that weighting if you'd like to see it. But this is the number that all of the federal programs use. This is therefore the number that Vermont translates into. And some of our benefit programs, we might use 138% of poverty. We might use 200% of poverty. We might use 100%. Whatever that number is, it's based on these thresholds, it's calculated from these thresholds and those are updated every year at the federal level. So that's all I said. So if you go to the main chart on this page, this is just the poverty level, the poverty rate in Vermont. And again, I think we, I think we've talked to some people at the census. I think the 2015 numbers is an anomaly. I don't think it really dropped that much. I think, again, Vermont's a small sample size. Small sample sizes. There can be some quirks in the data at times. So really, I think poverty is sort of relatively flat or trending upward. And again, so over the long term, it's really not getting much better. So the, this weighted value and the question is the feds have not really adjusted that poverty number for what, since the 60s or the late 60s or something to that effect. So we end up having to correct or re-weight at the state level or make adjustments for our programs that we offer folks in order to try to capture the right number of folks within that range. Has there been any talk about why? It seems kind of stupid. The lack of a better way to put it. So things sometimes move slowly. I do think, so I think what you're talking about is that the definition of poverty was, you know, they established in the 60s and it was based on, again, sort of archaic kind of ideas, which is, you know, somebody was home cooking meals and your food bill was based on somebody cooking those meals every day. Or, you know, so there were some archaic pieces to it. It has grown. They have adjusted it over time. They also, in 2011, introduced the Supplemental Poverty Measure, which is another way to look at it and what that does is that accounts for, which is a good measure too, and I'm happy to send that information to the committee if they're interested. But if you're interested, but what the Supplemental Poverty Measure does is really adjusts particularly for regional differences, particularly in housing. So when you use the Supplemental Poverty Measure, it's not so far off, but it just gives you a little bit more nuance in terms of from region to region. So somewhere with a high cost of housing, for example, you'd see that more people would sort of be considered in poverty in those areas. But there's only two of the 50 states that actually have a qualified... Poverty. Right, so I think that is an issue. I think that is part of why a lot of the programs use these percentages above what the actual poverty level is, because I think there is this acknowledgement that there are some weaknesses in how that's officially measured. But this is also part of what we looked at, and we'll get to these next slides, where we looked at Vermont does this, the Joint Fiscal Office does these calculations on the basic needs budget, and what the basic needs budget looks like. And so we do a lot of analysis based on that. So looking more at what does it actually take to meet your basic needs, not just what these sort of official measures of poverty are. But I do just want to point out a couple of things about the poverty level, which is that there are certain groups, for whom, if you could go to the next slide, please, there are certain groups for whom the poverty level is particularly worse, particular groups that really get left behind, and we know that it disproportionately affects Vermonters of Color. So this is Vermont's specific information. Again, we have small sample sizes, so we have to use the five-year estimates just to kind of get some smoothing in that. But we know that the rates are much worse for Vermonters of Color. And so the difference, just so you know, that red chunk is the people in extreme poverty, which is considered 50% of the poverty level, which again is some of what Matt's referring to in terms of people who have very little income at all. And then the other- I'm sorry, one more question. In this committee, I just want to point out, we are asking a lot of questions because we're very interested and we just, we do have other witnesses that are scheduled too, so I want to respect Stephanie's time and I'll witness his time as well. I'm going to condense what I was going to say, which is I would like to see the statistical analysis you're presenting to be able to work consistent because you've contradicted yourself twice now. Okay. And I'd like you to just present the data consistently. Okay. Okay. Thank you. Sure. So the next slide is that single mothers also particularly have a particularly high rate of poverty. It's close to a quarter of single mothers and that's been true for a long time and it's particularly bad for those single mothers with children under five. So, and we've sort of known this for a long time. I don't think it's necessarily a surprise to people. We know that childcare is expensive. We know that the costs and the schedules are difficult, particularly for single parents. We also know that this disproportionately affects single mothers over single fathers. So the next slide is, this is what we were talking about. So this looks at the joint fiscal office analysis. So this idea of the basic needs budget. So what we did with this is we looked at the census microdata which really gives you essentially a profile with each person who answers the census. So it doesn't have any identifying detail but it has sort of their number of children, their income level, their number of hours work, sort of lots of detail. So when you kind of go into that deep dive of those people, we really want to look at how many families weren't meeting their basic needs. So not just looking at the poverty level but looking at what is realistic in terms of living expenses. And so we only looked at, this isn't all families in Vermont. We just looked at a handful of family types that are addressed in the basic needs budget for the joint fiscal office. So they kind of break it out in these different categories. And so we stuck with those categories and then we also narrowed the universe of this to people who are in fact working. So these are all working families who still can't meet their basic needs. So no surprise, many two thirds of single parents with one child can't meet their basic needs. 80% of single parents with two children can't meet their basic needs. But what we found surprising about this is that even in families with two earners, that more than a third of them were not making enough to meet their basic needs. So that was a little bit of a surprise to us too. So on the next slide, I think this also explains why the demand for services is still well above where it was before the recession. So demand could be squares is still elevated. On the next slide, we also see that there's more people in an affordable housing than there were before in an affordable housing defined by HUD as spending 30% or more of your income on housing. So a lot of these things we think of sort of as important measures of however monitors you're doing. And from our perspective a lot of these are moving in the wrong direction or they're stuck. So I think the question is what are the policy changes we can make at the state level that would help turn this around? So again, this comes back to minimum wage. And I think one of the questions that came up in the study committee and sort of that I referenced earlier too is this question of whether the minimum wage should in fact be a livable wage. And from, and our answer is unequivocally yes, that that is sort of the point of the minimum wage is to ensure a livable wage and that we by letting the buying power degrade over time, we've broken that link. So to by any measure, the minimum wage, the buying power of the minimum wage has decreased. So if you look at it compared to economic growth as Matt mentioned, compared to productivity. When you look at it compared to median wages, high wages or just looking at the growth in some of the big ticket items like childcare and the cost of housing, the buying power of the minimum wage has shrunk. So for example, on the next slide, in 1980, if you worked at part-time minimum wage, you could pay for the cost of BVM. And in 2016, in order to be able to do that, you'd have to work 56 hours a week to pay for the cost of tuition room and board at UMM, which would leave you pretty much no time to go to class. So, and then the next slide is looking at this comparison of the livable wage. And again, this is the livable wage as defined by the Joint Fiscal Office. That gap is not shrinking. So even though it's gotten a little closer in these most recent increases, it's actually not really shrinking that gap. So the question is, can we shrink that gap and what would that look like? So those two things aren't getting closer together. And then on the next slide, so this is the basic needs. Again, this is the basic needs and we just want to point out when we talk about livable wage, we're talking about what a single person in shared housing needs. Obviously, there's a whole lot of, you need a whole lot more if you've got kids, if you're a family with kids, if you're a single parent with kids, what you need to meet your basic needs is significantly higher. So I acknowledge that we're talking about minimum wage here. Obviously there's a whole other set of policies that we look at to try and address every family kind of being able to meet their basic needs. And so there's a whole package of that. There's childcare assistance, there's the earned income tax credit, there's Dr. Dinosaur, there's all these other things that we do to ensure that families of all sizes are able to make ends meet and get what they need. So we know that the minimum wage doesn't buy what it used to. It disproportionates certain groups. We know that there's more women, we know that there's more people of color that are earning minimum wage. And it's not even close to meeting the basic needs for individuals, let alone families. So any staff I think toward narrowing that gap would make a big difference. And of course timing matters. So the timing of this is significant. So I know that what's in front of you is this 2024, $15 by 2024. When we deflate it back to 2018 and 2016, we see that a $15 minimum wage by 2020 or 2022 would have meant a livable wage in 2016. So if the goal is a livable wage, I think 2024 was close. But the further out you go, the less likely you are to be closing that gap between the livable wage and the minimum wage. So just in conclusion, I think the points that I was trying to hit were that income inequality is getting worse and that that's a problem. And that a lot of that inequality is driven not just by the big gains that we're seeing at the top, but also by this stagnation of the wages at the bottom. So while, as Matt said, we can't always do a lot about sort of those broader economic courses, this one is something that we could do something about. And that if we do in fact raise minimum wage to a livable wage, we're starting to push back against those forces driving the inequality. And not from our perspective, we really need to start with this idea that addressing the needs of workers and families is the way to a stronger economy and not the other way around. One last question, or for me anyway. I like the thing about the weighted average salaries and the things that I like to put a different number on $15 an hour. And I always use 40 hours as an easy math. Is that accurate anymore? And we just heard from up here, it's that the average hour is 34 hours. Should we be using, when we try to compute what $15 an hour at 33 or 34 hours, or is that a truer number of what's going on in Vermont? Or is it 40 hours of work no matter what the jobs are that gets to the salary? I think we use 40 hours as the default for what's considered full time. But we're taking, the wages that we're taking into consideration include full time jobs. We're just trying to analyze them all so that they're all looking across the same standard, even if not all of those jobs are full time jobs. So some of this is just the way that we compare it and that we're not actually trying to say this is the average number of hours people are working. We're saying if you work 40 hours, this is what you would get at X level. If you work 40 hours at this, this is how those pieces compare. So I'm not sure, the way that we do this analysis, I'm not sure that we need to be that specific about what the average number of hours are, but I do think, and I've had, we've had a lot of conversations about the number of hours and about some of the volatility in scheduling that people, particularly people who are working part-time face, particularly in retail, and those are real issues. Now, whether or not that's a minimum wage issue, there are real issues in terms of sort of the last minute scheduling and the volatile schedule, which is part of what goes to this issue of people not being able to have a job, because if they don't have critical childcare or a lot of these minimum wage jobs, you're working retail hours, you're working restaurant hours, and so it can be really hard to predict. So that's something to take into account, but what we're trying to do is just standardize the numbers that we're looking at. So we use the default of 40 hours. How do I represent my person? To continue on Representative Stevens' tack around the 40 hour piece, you know, I do apologize for being late, but I was actually doing a constituent piece, and it was around this particular issue. And, you know, he and his wife, I think, combined work, what they call three-part time near full-time jobs, and they're just barely able to kind of keep all of the pieces together. And what I've noticed in talking to him and a few other folks, you know, is that it seems that there's more of a trend to keeping a lot of regular folks at that 30 hour range, you know, it's 32, and what it does is, obviously, it reduces the amount of overtime that needs to be covered, but it doesn't give a lot of budgeting power, let's say, to the average person. Has that trend, you know, like Representative Stevens has been saying, has that been showing up in your research? So, there's definitely some, absolutely. So, I mean, I think, you know, Vermont has a lot of small businesses, you know, we still have some big employers, we have Walmart, we have, you know, so you see some of this. I mean, there's definitely incentive to keep part-time jobs, part-time, if possible, right? There's definitely incentive for that. There's definitely, you know, movement toward reducing hours. You know, I think, and I think the volatility in scheduling is also a problem for people just from the planning perspective, from the perspective of childcare or whatever else is necessary. So, you know, I think whenever you look at the, when you look at the body of minimum wage research, they're trying to take into account both the loss of hours and sort of what it might look like. And there's always gonna be some adjustment in the, you know, there's always adjustments in the labor market. And I would point out, you know, when we talk about job loss of 1200 jobs or whatever that might look like, I don't wanna diminish that, but I do. But there's always such churn in the job market. And any given year, we're losing 20,000 jobs and gaining 20,000 jobs. Or we're losing 22,000 and gaining, and worst of the recession, we're losing 23 and gaining 18 or whatever that might look like. So there's all this churn happening. And that's true of businesses opening and closing as well. So, you know, if we look at businesses opening and closing over the course of the recession, you can see we sort of have net gain in businesses opening pre-recession. Now we're back there again, but during the recession it was tended to be in that loss of businesses, you know, closing, more businesses closing than our opening. So there's just, there's so many factors that are going into these things. I think most of the minimum wage research does try to look at whether people are losing hours and whether in fact, you know, sort of the low wage population on net in the aggregate is doing better or not. And the research is pretty clear on this. Pretty clear that on net it's better for that population to have minimum wage increases. So, you know, I think there are going to be some loss of hours. There's no question about that. There, you know, there are going to be businesses that, you know, there are going to be winners and losers. But that on net it has a positive effect on the economy and particularly on the wage workers. Thank you so much. Thank you. Lots and lots of information for us to show. Thank you. Thanks. Do you want to do any news on top of that? Do not. Okay. I'm going to jump ahead and say beggars trigger. Thank you for waiting. Got it. Good morning. Thank you for the opportunity to address the committee. My name is Becca Schrader. I'm the business resource manager for the Vermont Community Loan Fund or VCLF. The Vermont Community Loan Fund is a mission driven community focused alternative lender. We make loans to small businesses, community organizations and nonprofits, childcare providers and developers of affordable housing who may not qualify for loans from traditional lenders. We combine our loans with financial capability consulting and business advisory services to make sure our borrowers have access not only to capital but also training and the knowledge and skills that are critical to running a successful business. VCLF's mission is to create opportunities that lead to healthy communities and financial stability for all Vermonters. Vermont's early care and learning system aligns with that mission in several ways that address economic development issues and issues of social and economic justice. To highlight just three of those, the early care and learning system provides jobs. It facilitates labor market participation and invests in our future workforce. To that end, VCLF has a dedicated lending program to finance startup and existing early care and learning businesses in Vermont for real estate purchase, construction, equipment and working capital. In the year 2000, we identified a critical need for financing in this industry. Banks are hesitant to lend to early care and learning businesses, especially startups. The profit margins are razor thin, owners rarely have much experience in business management and collateral is tight. Many early care and learning providers mortgage their personal residences to finance their businesses and even after many years, rarely have considerable assets to leverage for expansion or working capital when they look to serve more children, increase quality or increase wages and benefits. For over 15 years, we have financed childcare businesses ranging from registered homes with six children to licensed centers with over 150 children. In addition to providing access to capital for early care and learning programs, we offer business advisory services primarily around business and financial management to help early care and learning programs increase quality and access as well as working to make early care and learning a viable professional choice. In advising early care and learning providers, we've learned a lot about the funding streams into these businesses and the careful and precarious balance many of them operate in. Juggling childcare financial assistance program or CCFAP subsidy payments and private pay tuition is just the beginning. Many also participate in the federal food program receive preschool tuition payments through Act 166 private public partnerships to provide universal pre-K. They apply for both government and private grants and even hold fundraisers. We can assure that no one is in the early care and learning business for the money and these business owners would be the first to tell you that their employees should be compensated much more for the service they provide to children in their most critical years of development. However, they will also be the first to tell you that the families they serve are already stretched thin to pay tuition at current rates. The 100% subsidy rate is outdated and even if brought up to current market rates would likely still fall short of the true cost of providing high quality care as calculated by Vermont's Blue Ribbon Commission on financing high quality affordable childcare. Families that receive partial or even full subsidy can rarely afford to pay the copay to make up the difference between their subsidy and the provider's full rate. Many providers elect to simply not charge for the difference, absorbing additional costs into their programs. The more children a provider cares for that receive subsidy, the larger the impact of this deficit so that programs serving predominantly low and moderate income families are hit the hardest. One of our borrowers, a four star program in Lindenville recently made the difficult decision to close her infant and toddler rooms. The very age group where Vermont has the most critical need. As of the end of this month because she simply cannot make the numbers work. This will mean a loss of 12 childcare spaces and five jobs. She has always paid her entry level workers at above minimum wage and for the last two years had raised entry level pay and stepped with the rising minimum wage without raising tuition rates. This year she was unable to absorb the additional cost without raising rates. Early care and learning business owners are caught in a tug of war between two groups of people they care about the most. The children and families they serve and their employees. Oftentimes people fall into both categories as one of the most valuable benefits early care and learning employers provide is discounted care for employees' children. They would love to pay their employees more but they simply cannot. And while families that access early care and learning programs would presumably benefit from an increased minimum wage the subsidy structure and benefit cliff mean that making more income does not necessarily mean that minimum wage earners would have more funds to pay higher tuition rates. While this bill partially addresses that issue stronger language while still non-binding would communicate this legislature's acknowledgement of that importance. The financial stability of the early care and learning system depends upon a complex structure of several inputs. Pressing one lever without adjusting others could easily cause collapse. In tandem with consideration of raising the minimum wage we would suggest an investigation into other investments in the early care and learning infrastructure. Such as public funding through increased subsidies financial supports for early care and learning professionals to prepare for and grow professionally in the field. Incentivizing employer funding and facilitation of childcare support for acquiring and renovating facilities including permitting costs as well as bond issues or other measures. Thank you. Representative Strong. Thank you for the testimony. We just had our lunch with our early childhood group a couple of weeks ago. And from the Northeast Kingdom had several strong voices that right now on the goodness of their heart they're taking care of a lot of children to help families but really don't charge what they should because they're already on lower incomes these families. Can you just mention Lyndonville? Is this a permanent problem that is really throughout more than just the final area? Yes, I would say that that's something that we see statewide to some extent that the borrowers that we work with they often do not charge a copay to families receiving subsidy whether it's 100% subsidy or partial subsidy. And one of the things that concerns us about that particularly from a business management standpoint so we're working with providers on doing cost projections and cash flow management looking at their financial statements their profit and loss and balance sheets. One of the things that we don't see when we look at their profit and loss is any accounting for that. So they are running at a breakeven or loss and they don't know why because they're not accounting for there's no line item that says scholarships or whatever they want to call that they're simply absorbing that cost and most of the time it ends up that they own or then is the one that's taking a hit on their wages. So it would seem that if you make that decision as a business owner that you would be able to deduct that stipend that you're making an issue for. As a loss mean? I mean if you're it's part of doing business. Right. And if you're making that strongest statement that I am going to operate my business I want to do the best I can to operate a profit but any loss that I attribute you would think that adjusting for that? I think generally we see sort of a lack of sophistication in terms of business management skills for providers so what they're doing is literally a labor of love and so that's where a lot of the training that we provide comes in and really seeing it as a business and so acknowledging that if that's a choice that you're making that should be then reflected in your finances and that has ripple effects as well so when we do the market rate survey which I'm sure you've heard we're already behind the market rate as far as the subsidy goes but even when providers are completing that market survey when they are setting their prices those prices aren't reflecting the true costs of care they're reflecting what somebody down the street provides what they're able to get from the subsidy what they're able to pay workers and so even the market rate I would say is not a true market rate and so it has that effect and then you have the other effect of many providers not being able to make that business sustainable on its own so they either have a spouse who makes enough money to subsidize that business or they have another business that subsidizes that business and that's the only way that they're able to make the childcare viable Do you have information on the tenure of childcare workers? I would, let's grow kids might have that information we don't, so we don't have a research or data gathering arm independently or in-house so the data that we have is specific to our borrowers we have a portfolio in the early care and learning of approximately 43 to 45 childcare providers and then we obviously have folks that have gone through our program and pay their loans off and so that's where we get our data so most of our data is anecdotal but certainly we know that one of the things that we hear from our borrowers is the difficulty in attracting and retaining qualified staff particularly with the increased qualifications that came out in the last round of licensing regulations we do have one borrower who has been open for four years she's had zero staff turnover that's unheard of really I mean she's definitely the exception to the rule Thank you, very interesting testimony can I request that you get a copy of this to Ron for our records? Yes, absolutely and I just ask that we're going to hear from like dozens of people so it would be good to know Information overload Yeah, I'll figure out what I can retain over three weeks So the loan fund has been I mean I've been aware of your work for many years and in terms of the child care and supporting child care providers and I guess it's always frustrating to me and maybe this is a let's go kids question is you just said that a lot of people don't create a business model that reflects what it costs to run the business We have a hard time seeing child care providers pay even a minimum wage with all of their college degrees or qualifications and yet even forgetting up to 200% some people who receive subsidies this is an incredibly expensive service that a parent or family pays for regardless of their income and yet these are some of the most underpaid people are you know not arguably they're underpaid for the work that they do I see this huge canyon we're not going to solve it with raising or not raising the minimum wage Right, and I think that's our basic argument is that there's so many different levers that you can push minimum wage might be one of them with the understanding that in this case your employers are probably working at or honestly less than minimum wage themselves and that it's a blended funding stream that comes from both private pay and public funding so it's really so while we encourage and try to help providers see themselves as a business it's not a business in a traditional sense of the word in terms of you know the pricing structures and that sort of thing so we try to bridge that gap in some ways but the financing piece that we do also is part of that as well so that's one of the startup barriers is a facility because you need to obviously there are several safety requirements that are needed in a childcare facility and a lot of times they're buying maybe to start a small center they're buying a residential home then they need to if they want to have care on the second floor they have to put in a sprinkler system you're looking at $20,000 just at the outset permitting for traffic increased wastewater and water usage so those are other areas where there certainly could be I mean I've limited what I'm talking about to the minimum wage issue but we have lots of ideas Thank you. Thank you for sharing. Thank you. Thanks. Ron, do we have a phone interview next? I think she's available at 11. Okay, so we have Sarah Kenney. Yes, yeah, sorry. Sonia let me know that she was in a in a meeting until 11 and then getting on the road and could call in from there as a childcare. Pay is free. Now she's going to pull over I think actually, yes as a childcare center director she's juggling an awful lot today so Good morning. Thanks for inviting me here I'm Sarah Kenney I don't think I've actually been before this committee since I was in another job and you were in another room so it's nice to be here I work at Let's Grow Kids as you may or may not know we are a public awareness and engagement campaign committed to ensuring that all Vermont kids from birth to five have access to high quality affordable early care and learning programs I'm not going to belabor the points that Becca made and that I think you'll probably hear a little bit more about from Sonia who has a really unique perspective as a childcare center director and also as the head of the Vermont Association for the Education of Young Children so she works with centers all around the state but I really appreciate the opportunity to be here to talk to you today about this issue because I think that the early care and learning system really sits at the nexus of so many things in Vermont and especially when we talk about workforce and economic issues so our state, many people in our state literally would not work without access to childcare and we also know that during the first five years of life that that's when the most rapid brain development happens so our childcare providers are literally growing the brains of our future workforce and our development child talks about how their newest data is that the baby brain is growing 1 million new neural connections every second which is mind-blowing to me but it's such a critical window for us to provide that really positive early learning and development for our youngest children to grow the future workforce and to make sure that our current workforce can be at work and have the comfort of knowing that their children are being well cared for in those environments as you just heard from Becca this is such an incredibly important sort of structure for our economy in our workforce and yet it's one of the most taxed systems in our state not in terms of taxes but like burden systems in our state as you heard the average childcare worker in Vermont makes about $25,000 a year often many many workers although that's the average right so many are working at the minimum wage level and I would argue that they're doing some of the most important work in our state and as Representative Stevens identified there's this sort of canyon between families are paying way more than they can afford you've heard some talk about the childcare financial assistance program there are families that are two parent and two kid families who are receiving support from the childcare financial assistance program and still paying up to 40% of their income on childcare and that is a huge portion you know when my son was born I had known all along in my life I was going to have to start saving for my kids college account but it never even occurred to me that I would have to start saving before I had a child for his childcare but we never even found infant care for him which is a situation that many families are in too so I had a little bit of savings there except that I wasn't working as much when we couldn't find infant care for him and in this role that's for kids the more I realized that this is such a common problem for so many Vermont families so we've been really grateful to be part of this conversation about the minimum wage because it really as you heard from Becca directly impacts childcare providers and it also really directly impacts those families who are on the benefits cliff as it were so the childcare financial assistance program is one of those few components of our social service system where with the minimum wage increase as folks wage increases they actually lose more benefits in their childcare than they gain in their wage increase so that's obviously a situation that nobody wants to be in and the summer study committee and the senate committee has talked a lot about and we really appreciate the conversation around how do we make sure that that doesn't happen for families I would agree with Becca that I think that the language that the senate authority begins to get at that but it does entirely rely on the availability of future appropriations so I think it's wonderful to acknowledge in the bill that we need to address this issue and that we can't hurt families more than we can help them with the minimum wage increase and the language also references the sort of wage increase on the wage impact on providers as well and I think that that's really important anything that you can do to strengthen to make sure that the money will actually be there to support those increases would definitely help the situation I think and help ease fears around the state of what the impact might be on childcare providers it's interesting and Matt actually talked about one of the things that we need to do is grow our population in Vermont and we have been astounded at how many businesses are really interested in talking with us about how to solve the childcare challenge in Vermont because that's one of the first things that they hear when businesses are thinking about moving into Vermont which surprised me they want to know is the housing will my employees be able to find housing and will my employees be able to find childcare and so many businesses and chambers aren't able to say that they'll be able to find childcare we know our latest data is that when you look at the population of kids so 70% of kids under the age of 6 in Vermont have all of their available parents in the labor force so that means that over 70% of families in the state are likely looking for some form of childcare and for that universe of families more than 50% of those infants and toddlers don't have access to regulated care in their community so we just don't have the childcare spots that we need so when we look at wanting to attract young families to the state and being able to support our workforce we need to be able to grow this universe of available childcare and not make it an even harder profession for people to sustain and to get into so anything that this community can do in your work as you go along too to support the childcare workers and families accessing childcare would be really welcome. As Becca mentioned the childcare financial assistance program is currently about 10 years behind in terms of the level of reimbursement that we pay so they pay families based on the provider on behalf of the family subsidy to support their access to childcare the rates that they currently base that on are from 2008-2009 so that as Becca mentioned leaves a gap between what the state is willing to support you with and what the actual cost of care is and that doesn't even really reflect the actual cost but the providers is just the actual cost that they're charging so as Becca mentioned some providers just take that cost on themselves others pass along the co-pay to families which is where we get families who are paying to 40% of their incomes in spite of having state assistance so we have a huge road ahead of us in terms of solving this problem but it's so critical to the future of our workforce and to the future of our economy in Vermont. When it comes to childcare centers that have families that receive or receive the subsidy mm-hmm what is the I don't know if it's an average percentage of their clients or their kids who might be on subsidy so mm-hmm they're getting underpaid for what percentage of their kids and who might be on full that is a great question that I don't know the answer to off the top of my head I'm sure we could find out that Reva Murphy who's the deputy commissioner for the Child Development Division at DCF is a terrific resource about all of this and it's kind of all over are you hearing from her or are you a commissioner I presume that's a great question for her it's sort of all over the map some providers don't have any families who are on childcare financial assistance others have, I've heard of some centers that are like 90% of their kids are receiving financial assistance we took similar tests only five years ago we kind of played with this current one and there were so many people and you know I think that the commissioner and deputy commissioner talk really eloquently and hopefully we'll speak with you about this when they are here but the underfunding or childcare financial assistance program means that so even if you're receiving 100% of the subsidy that's based on market rates from 10 years ago but if you are your income is over 100% the federal poverty level which is still a very low income or lower level of subsidy so for folks who are sort of right at that you know upper low income or lower middle income right on the threshold of eligibility they're only getting a 10% benefit from the state and that 10% is definitely not enough to be able to afford childcare if you're in that income level so there's actually a flop off of people who are accessing the program because they just can't afford it you know I'd say so young couples that already have a child looking for childcare do you have a lot of young couples that come to USA and we want to have children what can you provide what do you usually see more of I would say it's both and yeah and we just to be clear we don't actually sort of line people up with childcare there are referral agencies in a lot of communities that do that but we work closely with those referral agencies to just find out sort of where things are at I think it's both and it's interesting to me that I'm increasingly hearing more stories and it's really anecdotal but I'm hearing many more stories from people who are even thinking about getting pregnant or in many cases are thinking about having a second child or a third child and are realizing that they can't afford to the childcare for a second child I have so many friends who've actually left the workforce after having their second or third child like really smart amazing professionals who haven't their income just didn't offset their child so they've had to leave the workforce and sometimes that's for five or six years and we talk a lot about sort of the impact on women especially professional women and what that does in your career when you're forced to leave the workforce for a number of years and there's this very scary calculator that's on a national website out there where you can actually plug in sort of what your income was when you took your time off and how many years you took off to be home with your child and it tells you exactly what your lifetime loss is in terms of income and social security and everything and it's really, I didn't do it, it was really sad, it's a little scary, yeah. To further help the committee with the representative Smith's question around what let's grow kids do can you share with us your work? Yeah, absolutely. So we are an initiative of the Permanent Fund for Vermont's Children which is a nonprofit foundation and the Permanent Fund has been around for a while and is really dedicated to our mission is making sure that all families have access to affordable, high quality childcare by 2025 and then we go away. So we have a lot of work to do in terms of sort of the let's grow kids arm is really taking all these stories that we hear from Vermonters and connecting people with each other and working on advocacy here in the building on these issues. Our partner initiative is called Vermont Birth to Five they're the other sort of branch of the Permanent Fund and they have been doing work for many years on improving the quality of childcare so they work directly with childcare providers all around the state and their new work starting just a couple months ago is really the level of quality of care has really gone up in the state of Vermont which is wonderful but the capacity has gone down a little bit and continues to decline because of all the financial issues we've been talking about here we lose a lot of childcare providers who go to work in the K through 12 system because public education just pays much better and has much better benefits so they really shifted their work to looking at capacity so part of our mission now the work of Vermont Birth to Five is increasing the capacity of childcare slots around the state and we have a goal of 500 new childcare slots every year so that's another big part of the work that we're doing John that helps thank you Sarah I'll ask you the same question I asked Becca with a little bit of variation do you have information on recruitment and retention of childcare when you just I texted my colleague when you asked Becca that question and she texted me about Vermont data which I haven't had a chance to read yet but let me see what she said she said nationally there is high turnover among providers reaching about 30% nationally which is largely attributed to low pay and benefits sorry Vermont Department of Labor has projected that between 2012 and 2022 so I think they did this projection in 2012 looking at the preceding 10 years that almost 70% of childcare positions would become available in Vermont due to turnover 70% annually I think that's between that's over that decade between 2012 and 2022 so it's in the top occupations in the state with the highest number of openings on average per year and that's not because new childcare programs are opening I don't think it's because of high turnover it's definitely something that we hear a lot about from childcare providers and you may have heard from folks in your communities that the new regulations around childcare in the state which came out last year especially for home care providers do require higher levels of certification and training and credentials in some cases and that's also creating a huge problem because if you're already working 60 hours a week for minimum wage how on earth are you going to go back to school so Sonya can talk to you about a program that's got real promise in the state which is the teach program which is one of the things that we reference in our memo is one of the levers that we can pull to try to impact the system which provides access to higher education or even bachelors degrees or apprenticeships for childcare providers to help them get the credentials that they need my understanding on the approach to see a teach that wasn't supportive that is true and just throwing that out to the universe because it is I have no there's no reason for that we are definitely working with your colleagues on the senate side around the appropriations bill as well because there's also you all did and we are very grateful that there is a small additional appropriation to bring at least the federal poverty guidelines the reimbursement rights after the federal poverty guidelines for 2018 but there's no significant increase in terms of the amount of reimbursement that families will be getting to bring them up towards market rates but we look forward to continuing to work with the legislature on this issue in the coming years thank you happy to come back thank you we're going to have a phone interview with Sonia Raymond and then we're going to take a short break because we've been sitting for a couple hours and then we'll talk to so I'm going to do this just a little technical word we have our percent of consults on the phone we can get two calls on that phone but if I don't reach I have to disconnect them with this her too so I use my cell phone and using your cell phone for Sonia yes that's the plan and who wouldn't answer a call from the 512 area I didn't know that hi Sonia you're on speakerphone with the committee and also the executive director for the Vermont association for the education of young children which is a statewide organization with adults wanted to experience as a home this would basically be so our teachers as I've stated are pretty woefully underpaid today I have not raised tuition enough families that are on state subsidy to afford this co-pay as many have struggled to afford their current co-pays who have no tuition assistance at all would basically price out of the market and forced to make some tough choices about choosing programs that are unregulated or lesser care or perhaps even pulling out of the workforce altogether some programs would be forced to close particularly intensive talkers for their FEC subsidy are going to be devastated as they generally are their care businesses we have a pay scale and this would mean a 3.5% increase for an additional $460 a year for child and this increase wouldn't even take into account increases would mean including language to increase the market rates families who sit on the edge of the qualifying currently state appropriation to offset this is representative thank you so much for joining us today do we have any questions for Sonia? I just had one quick one representative strong when you mentioned earlier childhood facilities toddler and babies having to close do they have to charge more per child because it is more intensive care thank you that's the first time I've heard that thank you Sonia would you say that this industry is one of the few where labor costs need to be increased rather than decreased would you say that the childcare industry is just an industry where labor costs the price of labor needs to increase in order for it to be sustainable we're losing those folks to public schools because great thank you so much Sonia I appreciate your time and if we need to delve into some of those other levers as you call we'll be sure to call thanks have a good afternoon thanks Sonia so committee we have we want to take a 5 minute break to stretch committee thank you for coming back in 5ish minutes pretty good legislator time welcome Tom thank you it's been a while since you've testified that we introduced ourselves to you from from from from from from from from from from from from from from from from from from from from from We did three analyses last year on variations that were brought up and proposed at different times about what might happen to minimum wages. So those three memos are things that I sent to Ron, so if you want to reference and read through them, that's fine. We've also done probably another three or four analyses since 1999 when we did the first minimum wage analysis for the state that was done with a summer subcommittee that really went deeply into it. And it was the first time that there was an understanding that there would be benefits lost by people through minimum wage increases, and that had never been factored into any minimum wage analysis in the literature that was out there. And I think, you know, made a real difference in how we understand it and what we can do to truly benefit the people that you're trying to help, which in some cases this was disadvantage in people because they were losing benefits faster than they were gaining income. So I really commend you for, you know, addressing that and considering it. Deb Brighton was a person, by the way, who did that analysis and has done it consistently over time. And it was a phenomenal amount of work. She had to go into each one of these benefit programs, federal and state, figure out all the cutoff points, calculate everybody's after-tax income or income for purposes of qualifying for these programs, and then seeing what would happen to their benefits. It was a monumental effort on her part and really contributed to the whole thing. There's, you know, a series of charts that we've done over the years and probably seen these. But, you know, it just shows that you stack up all these benefits, you know, and that's in-kind income for people. And then as wages go up, it shows, you know, depending on the family configuration, that your actual, you know, the monetary value of what you're getting for those benefits can actually go down as the wage goes up. And that's not what we want to do. We want to send people to work. And also how taxes come into play, you know. So there are taxes that start to, way before you get to a livable income level, taxes start to pull away money also from what people have. So anyway, all those interactions are important to note. So we did a series of analyses that culminated in work in September and October for the subcommittee that was looking at this. And our final analysis is not one that matches perfectly with what's currently under consideration. So we don't have an analysis that pegs, you know, detailed numbers like we do for the other variants that we looked at. We looked at $15 per hour in 2022, $13.25 per hour in 2022, and $12.50 per hour in 2021. And those would be sort of stakes in the ground so that then you could look at those impacts and say, all right, if we go a little faster or a little slower or something like that, then the impact should be somewhere within these ranges. But that was the purpose of it. So Joyce Manchester and Deb Brighton, people at Joint Fiscal, have taken those analyses and translated those into likely potential impacts for what's been proposed in S40. And those are the numbers that you've probably seen. But they're not in my documents because we didn't do that work Joint Fiscal did. But if there's any aspect of this that you have questions about, I'd be happy to just talk about it. We ran all the analyses through a state economic model to try to quantify some of the potential impacts. It's not like something that you're talking about an event that's six years hence. You're using data that in some cases is four to six years old. You know, there's a lot of, you know, there's a big time cap between that. A lot can change over that period of time. So it's not as, you know, a solid basis as if you say, what are revenues going to look like next year or two years from now or something like that. So that's the nature of the analysis. But the major chips, the major things that are likely to happen are spelled out and quantified in that analysis. So that document, if it's up behind, it's up behind. Okay, so that was October 2nd analysis and there are lots of charts and tables and things like that in that. But one thing I don't think that didn't make it into S40 that was kind of trailing testimony to Senate economic development was a recommendation that there be analysis that follows up to study what the impacts actually are. So we've, you know, done analysis in the past. But without the data to measure what really happens, you don't really know what's happened. And with some recent changes in Washington State, in the Seattle area, they mandated collection of information that allows you to look at hours worked in addition to the number of jobs and provides a basis for understanding what happens in the real world around this. And so I had recommended doing something like that for Vermont so that we're not flying blind. This is a substantial minimum wage increase, so it's beyond the range of historical experience. And so having ways to measure what's happening is probably useful so that if it's highly beneficial and not a lot of negative impact, you may choose to go faster on increases. And if you're seeing things that are negative, then you could say maybe it should be temperate. Maybe it should be slowed down or, you know, the cost that we didn't understand or realize. The work in Washington has not been conclusive. It hasn't been out long enough to really get an understanding of the impacts. But it's been a useful set of metrics to try to understand what happens when there's this kind of increase. The other thing is that we border a state with 29 bridges across it that has a minimum wage and at the federal level. So that's New Hampshire, of course, and there's not any indication, at least from what I've heard in the current session, that there's going to be anything done in New Hampshire to adjust that. And that differential is something that's a concern. There's a chart on page six of this analysis that just shows the differential with New Hampshire and if they don't change it, the sort of thing that you could get. And that, too, is an opportunity to look at and study what changes and what, you know, we've now had a fairly persistent differential for a while. It used to be, you know, pretty much the same, that's a zero line at the bottom. And then it started to depart, you know, at different periods where there's been a state increase that was above the federal, then the federal increases and that differential drops. But you can see it's sort of been, you know, climbing back up. And there should, you know, if there's some negative effects, they should start to show up and we should be able to analyze those. And there's not been funding to do any work like that. And I think even if it's sort of cursory work, that would be a useful adjunct to this is to be able to have some kind of a dashboard that says, you know, alert something bad's happening or something good's happening. Just some of the data we looked at, cursory analysis, the New Hampshire Department of Labor ran some data for us and showed that there was about 13 percent of the labor force. I think as of 2015, that was below Vermont's minimum wage. What was interesting is that about 70 percent, I think 68 percent of the people who were under the minimum wage were women. So there was a real gender split between who was getting a sub-Vermont minimum wage in New Hampshire. So things like that, which are just of interest to, you know, look at the data and start to say, well, you know, what's different? What's job growth look like in industries with high concentration of minimum wage workers? Now, it's not like there's nothing else going on in the world. So like take the retail sector where all the big box stores, you know, are being built on the other side of the Connecticut River. And so you see retail employment was going up there for a long time relative to Vermont. And all of a sudden, retail employment has dropped specifically to New Hampshire because of internet sales, not because of anything Vermont did. But it didn't drop into Vermont because the kind of retail stores that remained were real niche, kind of either tourists oriented or, you know, just fit in a different slot. So it's not like the minimum wage is controlling everything. But we can look at some of the factors and just observe things that are going on. So we had recommended that the Department of Labor collect data on ours and also job accounts that would allow us to monitor potential impacts that are occurring and also that some analysis be done over time looking at Vermont and New Hampshire. So that's not in the legislation now, but it was a recommendation or something you might want to consider. Isn't there information at the Department of Labor that shows at least Vermonters who work out of state where there's a number of, you know, income tax dollars that they can tell who works out of state? Oh yeah, you can tell who works out of state and who from New Hampshire works in Vermont and that sort of thing. Right. And the other thing in, you know, a way that may be taking your time is just that idea that minimum wage, there are a lot of the service industry jobs that are paying matching our minimum wage in the highly competitive services. Oh, sure. And this is another issue is the prevailing wage is starting to get significant upward pressure. So I mean, this is why Walmart announced, you know, large increases in the minimum wage they're paying. This is now the witness of their heart. This is because in order to attract qualified workers, you have to pay more. And what they saw when they did that was part of what's called the efficiency wage theory is that their turnover dropped substantially and they found it was actually a little bit more profitable to not having to retrain people and have quite so much turnover. So that's coming in at the same time. And actually it's why in some cases minimum wage increases haven't been shown to have really high negative impacts because quite often they lack the prevailing wage. So to the extent of just catching up with a prevailing market wage, you wouldn't expect there to be a whole lot of impact. There are some people that get lost in that. You know, when I talked about the female workers in New Hampshire, you know, people that are not, you know, demanding wage increases as vociferously or as, you know, whatever, those will sort of not, you know, there won't be motivation for every employer to just automatically increase those wages just because they're increasing wages for new people that they have to hire and attract. Representative Christie had a question. I'm sorry. Being that I represent a border community, what we noticed, you know, very quickly was as the Vermont minimum went up, it was matched, if not exceeded on the other side of the road, because of the competitive nature of the market. We have the lowest unemployment rate in the state in Hartford in that area. And so that being said, there's a demand for workforce, qualified workforce, and the only way that they could maintain their businesses was to be that demand. Right. Right. So that's a prevailing wage notion. And that's true. I mean, right now, we're seeing unemployment rates both nationally and the state level come very close to record lows. And that will create upward wage pressure, which even though you'll hear a lot of employers ringing their hands about it, this is what happens when there's scarcity in commodity or input to production. And it's also something that the lack of has been a real problem in the economy. And we talk about wages not going up for a very long time and real wages as well. You know, it's not that that's, you know, that's necessarily a good or a bad, but it's, it does mean that the negative impacts from minimum wage, if the prevailing wage is already above or close to that, that it will be the negative effects will be much lower. But again, you know, we'll be using projections. And if the economy overheats to the point that unemployment, you know, I mean, by adding deficit spending, which is what the tax cuts have done that were enacted in December, so that's juicing up the economy by deficit spending when the economy is very close to full output, you're likely to get more inflation and part of that inflation will be through wage pressures. They're not, it'll bring in people from the fringes of the labor force. And we're seeing that now. We're getting labor force growth, not because of natural population growth. We have the working age population actually declining in the state and flat nationally, but we're getting increases in our labor force because there are people that left the labor force that are coming back in. And so that's the first thing that happens. But when you hit the limits of that, you then will have wage increases. You'll be the same business that's competing for the same people. And those businesses that can't afford to compete for them will go out of business, either if they're competing with, say, cheap foreign labor or a served market that's unable to afford price increases and the like. Then they'll be going out of business, but those workers will be hired by some company that has competitive advantage somewhere and is able to pay those wages. So did you just say, I'm sorry, you say that there are people who are coming back into the labor force to fill out the gaps that are from a 2.8% thing? Are these the people that are measured differently? Like we say that there's a 2.8% unemployment rate, but there's really a 12.2%? Or whatever the number is, are those those people who stop looking for jobs that are coming back into the market? Yeah, there are about six different metrics for unemployment. So the standard unemployment rate is called the U6. So it has certain measures that you ask somebody, are you looking or have you looked for work over a certain period of time? If the answer is yes, then you're fired in the labor force, you want a job, you're trying to get a job if you don't have one, then you're unemployed. But if you say, no, I haven't looked for work because it's impossible, there's nothing out there or whatever, then you're not counted as part of the unemployment rate because you're not in the labor force. But then there are other metrics that say, well, are you discouraged because there's no potential work? Are you doing this voluntarily? Or so there are other counts of the unemployment rate and yes, that's what these other metrics and some go below and some go above the standard unemployment rate are all measures of labor market tightness. And there's no question on all of these, the market's tightening. And that's bringing more people who said, no, I'm not even looking for a job into the point of saying, yeah, now I am looking for a job because there's some that really look interesting. And at those wages, I'm willing to work. Generally, there are more people that are more what are called marginally attached to the labor force. Either they don't have to work or they maybe have a criminal record or have some history of drug abuse or something like that. They're harder to employ. So they wouldn't be the first employed, but at some point, people give them a chance and they're back in the labor force then. Or older workers. Does that even agree? I guess if I could lend something to that conversation in the last couple of years, I've hired people who I never would hire before. Yeah. And one point, whatever percent of who aren't working right now either don't want to work or are unemployable. And so I think that's, like you said, the margin. People that went from 3% to 1. Whatever percent, they get a lot of people like that. Yeah, well, that's what's happening. What line of business are you in? Property management. Property management, yeah. So you're not hiring at the very bottom. And retail. And retail, OK. So they need to have people. Yeah, certain presence, certain, yeah. OK, well, so depending on the labor markets you're drawing from, it can be looser, tighter, or various things like that. But the market response to a shortage is to pay more. And so there's a market clearing price for every commodity, including labor, every input to production. And at some price, if you were to offer $100,000 a year for people to have people lined up, but they'd be going from other lower wage jobs to that. And so that's the kind of competition that starts to occur. And I think your point is well taken. It's happening now. It's really starting now. Two things. Before we, it's almost 10 or 12. And we go on for hours with you, and we want to. The question I have for committees, do you want to work over until 12, or should we invite Tom back as soon as we can get him for further? And what is your life like? I think there's a meeting with the money committee chairs at noon. Is that the correct choice? Is it noon that I need to be at? But other than that, I could certainly come back sometime if there's follow up work. What is your, well, we can work even later today. I don't think that's a long meeting, not more than an hour. So let's just, we'll stop at 12. And then we'll bring, I want to bring you back, or we all want to bring you back. Question that we had from earlier today. The Department of Labor was here, and Matt Barrow was stated, made a statement about talking about poverty rate. And there was an argument, just this discussion does the minimum wage effect the poverty rate. And he made a statement where 50% of the people who are under the 100% poverty rate don't file taxes with W-2s. I'm assuming they receive SSI, or SSDI, whatever the different forms they may file, they don't work per se. Is that familiar to you at all? I haven't done a deep dive into the poverty stats and to who comprises that growth and exactly how they're affected by these sorts of things. So I have to defer to Matt if he's got data on that. That's what it is. If there are some specific questions around that, you want to ask, we could chase them down. I'm just trying to come back with. Well, it's just part of this whole workforce thing as well. I mean, just getting a big bead on the numbers, what the numbers in Vermont are of people who work and people who work and who don't work. That go beyond just this category that you just talked about. Yeah. Yeah, that would be interesting to see more about that and understand that. Yeah, I haven't seen those data though. Okay, thanks. Yeah. There must be another question. No, there's one take a little time. Well, Tom, I've asked this a lot of everybody. This was a question that Perth feels had last week. So, and you mentioned something about finding out the right data and what the outcomes are of actually doing a policy choice like raising minimum wage. And you said it's difficult to find out what happened and some of the things that you were asking for would recommend would be trying to find out that information. But we have a series of projections that you've done. Five years ago, there were a series of projections. Is there any worth or is there any credibility to looking at what you projected five years ago versus what you're projecting now and what happened in between? So, we made a policy decision based on recommendations from all of our research that were projections. And now you're making new projections based on what exists. Is there any way to correlate those two pieces of information to help us understand it differently? Well, have there been the kind of data collection that we're recommending now that would allow us to look at both ours work and number of jobs in these sectors? We would have been able to say something about that. Now, there are obviously lots of things that affect levels of employment. So what we're saying is relative to some baseline, there'll be a little bit less employment. And so that baseline though, was affected by the Great Recession. It's affected by zillions of other factors and things. So it's not like we had a point forecast that said, this is where we'll be. And if you do this, this is the variation. The better way to look at that is to say, let's look at control areas that have the same experience and those that have higher or lower minimum wages. That's why New Hampshire is such a good kind of comparable is that it's nearby. It has a lot of similar things affected and then, but you have this wage differential. So what sort of things might we see that would allow us to say, all right, they benefited or there was a cost. And that hasn't been done. That's a deeper dive into this part of it. It's not like there's a forecast that says, here's this number and here's where we're likely to be then. I mean, you can do that with revenues. We can say, how much did you forecast for revenues and then what was it? And we do that every year. We go back and say, well, what was the variance and at different points in time? What was it? And that's a track record and you're either up, down or on, you know? And you don't have a comparable forecast for this because you're doing a simulation that's assuming lots and lots of things and you're not measuring at the level of granularity you'd have to really know whether it was because of the minimum wage or something else. It was a factor. But that's exactly why I think collecting those data are important to give us some idea. But it's not as important either when the wage changes and all our wage changes before have been relatively what might be considered modest, you know, either at or a little bit behind prevailing wages. These are a much more substantial step up and so we would expect to see more pronounced impacts but without having the mechanisms to register that we can make some informed guesses but we won't have the precision that otherwise would be the case. So I'd be hopeful that at some time that that gets included as a part of it. You know, there's a lot of money at stake and it's not terribly expensive to do this and it's sort of thing other states have done and it's useful. But the results will still be debated in different ways but we'll have a set of core data that we can really look to that will inform what happened. Did hours go down? Did in certain industries they go down more than other industries? Are those industries of high concentrations of minimum wage? What happened to the same kind of business on the other side of the Connecticut River at the same time when the only major change was minimum wage change or this sort of thing. So we could start to tease that out. Representative Christy. So that's very helpful and interesting just because of where I live. But the other thing that came to mind and I think we need to be very cognizant of as we formulate our piece of legislation from a policy perspective is to ensure those benchmark points that you talked about and then having some sort of a relief valve or some way of saying at that benchmark if we spot that there's something going on you had mentioned we need to have some sort of a circuit breaker in there or it would make sense for us to have a way of saying wait a minute we gotta put the brakes on here because all of the data is indicating that if we don't so that's something that we need to be aware of and that hopefully you'll be able to help us possibly the policy component of that. Yeah I think that could go either way. I mean you could look at it and say gee there's hardly any effect we could go a little faster or whoa put the brakes on. And there are some other states that have various mechanisms for doing that. I think New York state did something like that. We did get that in some of the initial testimony so I'm just really concerned about that and I think that it might help people feel a little more comfortable if there are safety valves and controls. Yeah it's pretty far. I mean going out in six years things can change quite a bit so yeah it's probably good idea. Good segue you mentioned New York of course there are other border issues that we're very much aware of that we heard about in our initial testimony. With changes afoot in New York, upstate New York, potential changes in Massachusetts and a different structure in the Quebec province in terms of wages and particularly tipped wages. And can you comment on that in the analysis of those pieces? Yeah I think you need to look at every surrounding jurisdiction but the commerce that takes place with New Hampshire is far more dominant than any other economic flows that occur with either of the other three bordering political jurisdictions. So the presence of Lake Champlain and the fact that there are only a few places and ways to get across it and the absence of very large population centers on the other side of it has minimized those flows. If you look at journey to work data on how many people come and go to work between different states it's massive between New Hampshire and Vermont and it's really minimal between New York. So certainly the Bennington area down there you're getting flows both Massachusetts and New York. And with Albany not too far away there's a fair amount of commerce that flows that way with Brattleboro there's also Massachusetts effects as well as New Hampshire but New Hampshire is the biggest one. With international jurisdictions the difficulty in traversing the border and especially with security and all the rest has dampened some of what might otherwise be competitive impacts that you would see. So there are other costs to trying to compete there but it's not like that's to be ignored either. So all of those things are important and are important to monitor. It would be great to be able to include some of that in any cross-border work but the biggest focus ought to be New Hampshire. But yeah all of those matters. Well thank you part one. Okay. So would you like me to come back today or what we have today is I'm assuming that the floor is gonna be short-ish today. We have something right after the floor and then we have more testimony scheduled for this afternoon if you want to check in with us maybe around one o'clock. Okay. After your meeting with appropriations I don't want to pull you back and forth and back and forth and then you're busy. But tomorrow morning we also have time available probably after 10.30 between 10.30 and noon. Yeah I'm not available tomorrow but we can look at schedules and like the work summit we're on and see what happens in the next areas. Yeah because today may be harder. Yeah and I don't know if there are a lot of more questions over here so maybe you want to I think well let's work on something that should be early next week as well but just to yeah. And if you want to make a list of questions two things that come up and then you want to like send that in advance I can even you know work to that so that's whatever you're going to do. Yeah right you're going to figure them out between the nine and eight area. I'll look at it sucked into the vortex of statistics. Well hopefully you can sort of use that to the extent it really helps inform and shape things but it's not the final analysis on it it's just one piece of guidance piece of information work with that with everything else. Great well thank you very much.