 I'm sure you all know we're just passing military fairs. And continuing our discussion about the minimum wage, good to see you all here. Before we get going, we'll introduce ourselves. And with that on the head, we're up from some Valentine's Chair of the community. Tom Stevens, we're up from Waterbury, close to here. Deanna Gonzalez, from Wayski. Vicki Strong, from Albany. Tommy Waltz, from Bear City. Brian Smith, from Derby. Kevin Coates-Christy, from Hartford. Buddy Sherman, from Stoke. I agree with the thesis. Mary Howard, from Redwood City. And the committee assistant, Ron Wilde, will be running the take for us to preserve a record today. And we'll ask people to come up to this chair to develop a thesis that we can have it recorded and start with Wes Hamilton. Wes Hamilton, one of the owners of three-penny top root in your Montpelier, as well as the Matt Taco. We have a catering company as well. I apologize, I've been dealing with email and internet issues for the past two days. I didn't have the chance to prepare what I was able to prepare, but I think I can just speak. I'm strongly in favor of increasing the minimum wage. I personally wish we were talking about a livable wage right now instead of $15 several years from now. I think that just personally, if the economy does not work for everybody, it doesn't afford comfortable, dignified life for everybody, I don't know the purpose of the economy. And I know that the easy counter is often a business owner like me who feels that way should increase our wages. Much as I testified the same for the paid sick we built a couple years ago, if I choose to increase those benefits, to increase wages substantially over what my competitors do, it's me at a pretty severe disadvantage. My prices have to increase to cover those costs. And then, you may or may not be aware, the Vermont restaurant industry is thriving and tight and very competitive. So very often the difference between coming to my place for a burger or going down the street for a burger is a dollar on the menu. So just the same as with my competitors, we all pay rent, we all pay our water bill, we all pay the cost for our product. I feel very strongly that if we are all on the level playing field that we're required to carry insurance, if we're required to pay a minimum threshold for our workers, which we are now, it just happens to be not enough for them to get by. Then, you know, that puts us all at the same foot. My computer's not working, so I don't have what I'd hoped to have, but I have run some kind of just rough ballpark numbers. Even, you know, the approximately 33% increase from the current minimum wage to the $15 doesn't look like a 33% increase on the menu. It looks much, much smaller than that. The cost doesn't translate directly. So I don't think that that's, you know, that slight increase in what we would have to charge that doesn't bear out some kind of massive inflation as far as what it looks like to me. And then has the added bonus of more people can afford to go out to dinner or can afford to go out to the local toy store or wherever else because they have more income. That's just what makes sense to me. I know that business leaders and commerce groups, and I'll like to... What do they like to do? They like to talk about our taxes are too high and we should have lower taxes. Well, I've heard of our taxes paid for the welfare programs that prop up people who don't make enough to live. So I get pretty cynical and grumpy when I hear people don't want liberal wages and also don't want taxes to pay to support our neighbors who have to buy food and put clothes on their kids. And, you know, that doesn't even get into being able to buy a toy for your kid or take yourself out to dinner. So, yeah, I guess that's just the gist of it. I think it's a moral issue. I think it's smart economics. The rest of the world has figured it out seemingly. And I see 15 by 2024 as a very, very small step towards eventually having a more compassionate and sustainable Vermont. Representative Stevens. You talk a little bit about how many people in your restaurant work for minimum wage and where they fall in the spectrum of employees. But also, one of the things we don't talk about or haven't talked about much is replacement costs. If someone is moving in and out of those slots and you have to train somebody new, how do you account for that in terms of your bottom line and would it make a difference if somebody stayed on for weeks or months or years longer? Yeah, between the three restaurants and the catering company, I have about 60 mostly full-time, some full-time employees, probably about another dozen seasonal employees for the wetting season. Very few people we pay minimum wage. I'm going to say there's maybe about six, eight, and they're dishwashers. Dishwasher is always the low man on the totem pole, unfortunately, in the restaurant industry. And it's also, that's where our turnover is, but that's nearly 100% of our turnover. Maybe it's 75% of it, but dishwashers. They come and they go, and if we could afford to pay them better, I'm glad they would, as part of why I'm here, the costs of training are steep. Generally, you have an extra person, instead of three people in the kitchen that day, you have a fourth person because somebody has, because somebody's training. The way the industry works, it is easier and cheaper to train a dishwasher than it is a chef or a cook or a line cook, so we prioritize paying them better. As I mentioned, the restaurant industry in Vermont is thriving and moving. The competition for skilled labor, especially in the kitchen, is tight, which means we have to pay as best we can. I take a lot of pride in being generally above the industry norms in what we pay. It also results in a livable wage for, you know, the best half of my staff, but not that much. But yeah, the costs of the people who make glass, in my case, more often than our dishwashers, they don't stick around. I have bartenders. I have line cooks at Metaco who have been with us for six, seven years, and bartenders at 3.0 have been with us since we opened nine years ago. Those are not very common things in the industry, and I like to think, in part, it's because I'm a nice guy, but probably more so. It's because we pay better than most. Thanks, Les. So you think, rather than wages too low when it should go higher, what do you have guys in the middle wage? Why do you feel it's necessary for the women wage to increase before payment? I mean, you could be anywhere at all. Yeah, and the higher our payroll is then, you know, at the end of the day, eventually, that we've been, for about a year now, doing a pretty thorough cost-saving audit for everything else. We're working with Efficiency Vermont. We're going through our linen bills. We're trying to squeeze every savings we can in order to push the wages up as high as we can. At some point, there's no more we can do for savings, and so then that has to be reflected on our menu pricing. And then it becomes a very tight walk between the prices go up. And people are going to come in less because they can go around the corner and get a beer or get a burger because our prices are higher. I guess I'm kind of confused. But you're advocating for raising it to 50? Yeah, because then everybody's prices go up. If just my prices go up, then you don't have to come to 3-Band to get a burger. You can go to Positive 5 to get a burger for maybe $2 cheaper, maybe they choose to pay level wage. And we're looking for the income for banks, I mean $50 over there. But in theory there, the way it's tied in now to the inflation index, it will be the same level playing field all the way. Well, it's currently the same level playing field just in terms of we all have the same level of wage. What I'm saying is the way it's tied now is it goes, it's raised each year. Anyway, this would just accelerate it. So I guess what I'm saying is no matter what way you went there, whether it stays the same now or in this bill accelerated, the playing field will be leveled for everybody regardless. Yes, I mean that's true. And so I guess what I'm advocating for is that the more aggressive increase if I could, I would pay everybody a minimum of $18, I think a level wage is important. That would be significant cost on my end, which means my menu would be more expensive than all my competitors, which means I would lose business and then probably go out of business. That's why I think legislating the increase rather than leaving it to individual business owners is important. Representative Schumann? Just as a follow-up because I'm kind of confused as well. It doesn't, by doing this though, and you're obviously admitting this, that prices will go up, prices will go up all over the place. Everybody's prices are going to go up. So the purchasing power of the individual is still going to be the same as it is right now. So how does $15 change the purchasing power if all the prices are going to go up to pay for that $15 across the board, especially in restaurants where you are the last rung on the ladder of the cost of the product? So how does the purchasing power of somebody, we could say the same thing at $30 an hour or $5 an hour, like prices are going to go up or they're going to go down or they're going to stay the same. So that's my question. How does the purchasing power? I hope that there's somebody testifying who's an actual economist because I'm not. But $15 an hour is almost 30% increase for that minimum wage employee. To cover that overall, my payroll costs, maybe my prices have to go up 10%. It's not a penny, a dollar for a dollar across the board. To pay for that labor cost, but what about the product cost increase? Because everybody else is going to be paying. The driver for a payroll is going to be, to get the product to the... I mean, the products are going to go up. Everything goes up. So I guess I would just challenge that. I don't expect you to answer necessarily. Yeah. I mean, from what I've looked at and what I believe, it's just, it's not part and parcel. I think the benefit, I think there's ample studies and evidence and whole continents who pay pretty good base wages. And, you know, I haven't seen any, you know, just the size falling or anything. It seems to work out. But, you know, I'm a high school dropout. I don't know. I can't miss anything. No, I'm sorry. It's good for a high school dropout to own three restaurants. And I think I'm missing one. Three Kenny, Mad Taco, and what's the third? Well, we have two Mad Taco locations and then we also run a catering company. I'm not sure. I'm not sure. I'm going to cast our catering company. Okay. And one is in the Mad Hiller. Correct. And then one's here. Correct. Great food. Thank you. Good morning. Do you routinely give your, let me back up a second. How many employees do you have? About 60. Do you routinely give them raises when they deserve it? Yes. That almost exclusively in the kitchen, you know, our tenders and wait staff are coming on tips. What do you feel about having that opportunity taken away from you and being mandated? Well, I mean, there is a minimum wage right now. It doesn't feel like it's taken away from me. Sure. Okay. It pertains to wages. It doesn't really pertain to the minimum wage, but since you're a successful restaurant tourer, any losses in your business such as if customers walk out and don't pay the bill or the server drops tray of glassware, do you, your loss, do you take it out of their paycheck? No. No. I'm not even sure if that's legal, but no. Thank you, Les. Thank you very much. Thank you. Thank you. My friend. A restaurant tourer. And what are your three? I am the co-owner of the Reservoir on Waterbury for almost 10 years of the Bench Restaurant in Stowe. And as of last year, Tracy Meadows, Rusty Nail. And so I'm going to read you from the screen. Hello, board. My name is Mark Fryer. Somebody might recognize me from my testimony last year. I'm part owner of the Reservoir Restaurant on Waterbury to the Bench Restaurant in Stowe. And as of last fall, Tracy Meadows, the Rusty Nail. And so my partner and I finished last year pulling around 150 people up from 100 a year previous. I applaud your efforts in conversations around minimum wage, affordability in this state is a real challenge and one I hope you continue to focus on. Affordability can be approached from many different angles. For my business, much surrounds many prices and the ability to stay profitable on an ever-changing Vermont landscape. Today, I'm here asking the board to take time to focus on discussing tipped minimum wage and why I truly believe tipped minimum wage should be uncoupled from minimum wage to minimum wage. Employers are required to get employees to minimum wage or to do not earn it through tipped. Even by uncoupling tipped and un-tipped, wages, no employees should earn less than minimum wage. Let me repeat, keeping tipped minimum wage flat or keeping it coupled, no employees should earn less than the current minimum wage. By coupling tipped minimum wage to minimum wage it is given a raise to all wage earners no matter what their final take-home pay is. As you can see from my data below, the back of house, kitchen, hourly employees earn significantly less than the front of house, hourly employees in my business. This disparity in earnings is real and uncoupling will help to level the blank field if minimum wage continues to rise. I support higher minimum wage but I understand that most likely ramifications will be a cost shift up to a back of house labor. Earners at $15 today will expect earn more than someone just started. And I fully expect my costs are good to increase because we buy a lot of amount of products, produce, proteins, beer, spirits, etc. And we use many Vermont companies, distributors, service companies. The easiest response to these cost increases is to increase my menu prices, which will most likely increase the wages for front of house tipped employees since tips are typically percentage of price. But remember, since tipped wages are coupled in the current and proposed bills, employers would see an automatic increase in the front of house labor. Even though my front of house employees are earning well into the $20 an hour range, these tipped employees would see a higher base pay and most likely higher tips. No other business would non-tipped wages well into the $20 range would be have to spend more on their employees under this bill, but I would. Last year, my restaurant averaged around 16,000 hours of tipped wages per location. A move from $5 an hour, that's a 2017, to $750, would increase my labor costs by around $40,000 per year per restaurant. This does not include the other increases to back of house labor and costs are good stated above. Giving a raise to employees that are not asking for it and ultimately making my money crisis even higher. My first two restaurants operated around 8 to 10% profitability and about a third of that is labor costs. Large changes in labor costs cut hugely into profits. My new restaurant was previously a nightclub and is not profitable yet. The previous business had mostly weekend hours and employed only a handful of people. With the use of tipman in a way we were able to create a staff of around 50, half of which are in tipped wage. Tips are earned whether my restaurant is profitable or not. Some will say, why should a customer pay for a business's wages? My response is, one business doesn't do this. Other businesses just build it into price. Service companies, retail stores, all set prices based on their estimated labor costs. We would probably have to consider a service charge type model of tipman when wage continues to rise. What puts us, what used to be tip dollars in the hand of the employer, we would do everything we could to pass that income to the front of house, but there's no guarantee other businesses would. We would also have to set a front house wage, which would most likely lower gross take-home wages for many of my employees. Other restaurant models are starting to pop up in other markets in Vermont that move to counter service. These restaurants eliminate service and the food is served on paper products, including back-to-house jobs like dishwashers. I now employ over 150 people. I care about their jobs. I care about their wages, and I continue to enjoy employing a significant number of people in Vermont. I want to see Vermont an affordable place to dine for the local adventurists. It also keeps us competitive against neighboring states. Many of my employees have children. Some even own homes. I'm going to continue to work hard and make sure the legislature understands the impacts of these new laws. When the servers band together to fight the higher-tipped wages passed previously, they were able to get the law reversed and actually lowered. And I included, from my restaurant in Waterford, the average non-tipped salary earner, so it's basically back-to-house, earned around $12 an hour. That doesn't include salary employees. The average tipped wage earner earned $24.56 an hour, including the base wage. I had 21 females and seven males last year that earned tipped income. The average female made $25 an hour. The average male made $23 an hour. I included an article about why New York's currently, in the situation where there's top bucket and we're to the tip credit, and why there's a fight against it. And I also put in an article about the main server banning together to fight higher-tipped minimum wage. Thank you. Thanks, Mark. I appreciate it. What did you just say about New York there? There's a push in New York to eliminate what's called the tip credit, so the differential between minimum tip and minimum wage and minimum wage, so basically putting them at a flat wage with no incremental difference. So they'd be at the regular minimum wage in New York? Yeah, correct. So how does that relate to... Because right now we're talking about coupling, but I know that there's also bills that have been presented that eliminate it completely. Yeah. So I want to make sure that... I want to make sure that there's an understanding of how the tip minimum wage works, so I believe it is actually a really good thing for Vermont's new jobs. And as the coupling continues and the cost of that tipped wage goes up, I really think there's going to be pushback against that, and it's either going to be common service models or there's going to be service models that say, all of a sudden someone's like, well, if that's not working, we're just going to get rid of tips, and I honestly think that that's going to be a decrease for a significant number of people in wages because it'll just become an hourly wage that we set as employers and potentially put more money in our pocket and less money in the pockets of the front house. When you look at some of the data my highest earning tipped employees are in the $30 an hour range. There's no way that we would be paying that in the future, so I'm trying to protect the strength of those wages and understand that the coupling continues. It's just continuing to accelerate this disparity between this back-of-the-house labor and the front-of-the-house labor. I had a clip coming to me this week and basically gave me an ultimatum that he wanted to be in the front-of-the-house because his girlfriend works in the front-of-the-house and I'm sure they talk about how much are they paying for what he's doing here and he isn't a weak candidate. That's right. That actually, thank you because there was a server in Stowe who talked about that to me that was losing tips, losing their and that they make a pretty good wage, just take home as well. Yeah, I mean a lot of my employees of children they, with these wages they don't typically work 40-hour work weeks. They can earn a pretty solid wage and be home with their families so there's a lot of people that define this for a pretty nice lifestyle. Representative Stevens? What other benefits do you offer that tip wages, especially the part-timers and what you do for the care you do 401K if you do... We don't do 401K, we do offer healthcare and all three restaurants. We also pay them on which they earn overtime and then... I'm sorry, what was the last? Pay time off, they earn overtime and they also have discounts on meals. So with the paid time that's basically just started with your employees in terms of call outs and in terms of we heard a lot about potential abuse of the system and now that it's operational what are you finding? We were doing it previously already just to try to be competitive in the marketplace. I think West is correct in saying that it's a highly competitive market right now for employees especially in the back of the house in Vermont and anything that we can offer to try to get a laid up so nothing has really changed from us it just became formalized on a state level but we were doing it already anyways many employees are using it but we're happy to offer and use it and incrementally that cost isn't to me significant over the entire P&L of the restaurant. And just one last tip to be clear on the tip minimum wage you've been clearly supporting the minimum wage increasing but because you have to meet it anyway so for you the tip minimum wage is I don't want to say irrelevant but you have to always make that tip minimum wage up to the minimum wage if they have a bad week. Correct. I mean that forced increase is going to most likely mean that we're going to raise prices and I think at any level restaurant, say it's a successful restaurant or a restaurant that's barely getting by the restaurant that's barely getting by most likely has pretty low tipped income for their employees so if they're ever short on a two week period they would have to make up for it but if they have employees that are at or just above minimum wage they wouldn't have to make up for it so I think it's actually protection for the low level so wouldn't be forcing us to have increased costs when we have wages at this level and we can work on understanding how to absorb minimum wage increases as our faculty costs labor and costs the goods go up and that's in and of itself is something that we have to look at every year but just this year that quarter increase is about $4,000 per restaurant increase when we're at this level it's a little over $300 a month that's a real amount of money we have to look at it and take seriously and decide at some point they have to take a price increase or if we don't or if other businesses aren't fast enough they could cash flow out of business especially with how the seasons work here you have to be very careful in terms of how you spend money in a restaurant and I learned that very early I ran out of my first restaurant I ran out of money in the first three months because you have to pay for your busiest months and your slowest months you have to be very careful and the restaurant is open and so the lap of fourth quarter which is open in September since we went into a slow season we were upside down about $70,000 a cash flow to try and come out of it this winter so I mean it's a tough business it requires a significant amount of cash and understanding how to cash flow and I think that's why you're starting to see these models of elimination these jobs through modifying the model you don't have those costs and then you can price compete with other businesses you can sell a burger at a counter or you can sell a burger at a seated seat and the counter service model saves a significant amount of money from a labor perspective and that competitiveness will get even harder as the tipped income goes up so thank you so much for your testimony and your business has been very successful of being able to figure out ways to provide a good working environment and all these different benefits that you're able to provide which is not necessarily true for a lot of other restaurants and I am wondering about sexual harassment in the workplace and particularly around customers and with tipped wages so what is it that you've seen in your restaurant around around that I think it is real we haven't experienced much of it and actually I had someone hit me up last week that's why I have some of this data here was that question was presented to me we have a policy that any customer that is treating employee to a level that we believe is on I guess it was the word unfair we have a management team that takes it on directly we actually do either ban customers for a period of time or permanently we have no problem doing that in terms of whether emails are seen difference in the wage I think it's pretty clear in the Waterbird restaurant which I would say that had a history of being just a bar for a number of years and it was pretty rough for years and I walked into a restaurant that was pretty rough around the edges and people were smashing over a table in the first year of business and we had to address those things but I think it takes the right management style to show that in terms of female mail there is a significant difference in the average wage difference and even my highest employee is a female so I don't believe that we're seeing that I'm sure it does exist in certain markets but I don't think minimum wage is where you go after something like that I think it needs to be in other forms of laws or something else that can be done to help report something like that Representative Walsson it's gone I thank you I really appreciate what you're doing in the industry I have a question I really need to be clarified what you mean by uncoupling you're not talking about making up the difference when a server doesn't make minimum wage you're talking about the percentage so basically right now it's coupled to 50% of minimum wage is tip minimum wage so it goes to 15 minimum wage goes to 15 we would be paying $7.50 per hour no matter where wages are with our employees I'm saying that I believe that tip minimum wage should remain flat if tips don't reach minimum wage over a two week pay period then we would be required to add increased costs but what's happening is by keeping them coupled that $2.50 an hour goes to employees at a restaurant like mine that have wages well into the $20 an hour range which is only going to force us to additionally increase prices which that additionally increases tips because tips are a percentage of price which gives them an additional raise as well so to me it doesn't make sense to do it the way we're doing it I think I'm understanding you're only talking about that 50% you're not talking about but you need to make up the difference when they fall short we would be required to do that anyways and then there's been a question I've talked about this a couple of times in different committees there are one on one and the question just like we are required to pay minimum wage we're required to make up the difference I believe that businesses should be audited I believe businesses should be held accountable for making sure that employees are making minimum wage or raising those penalties or putting more people on the ground to make sure that compliance but that's where I would rather see it's been not hoping that by coupling it's somehow lessening that risk because I don't believe it's happening very often and what it's doing is it's just increasing cost on businesses that are really trying to survive in the Vermont place and employ as many people as they can represent strong so I am trying to thank you Mark for coming and for the wages that you have here posted here it looks like competition itself as far as keeping good health and employing them and training them is helping the wages be high and I'm just wondering you're also advocating for raising the minimum wage am I right and yet it could cost you in other ways prices on your product or how you serve to figure out how those both go together I'm still confused and I understand the question and there is a confusion on how tip wage works first so tip wage I don't necessarily control other than we set how many tables a server might take we try to get a server to a thousand dollars in sales which we hope translates to two hundred dollars a shift so that's how we can kind of control the income but other than that from there we don't control the customer's tip over the years prices have gone up and we've had to take significant prices on everything so that's actually giving a raise to the front of the house the back of the house we similar to how Wes was describing it there is the time that we start to increase wages in the back of the house is when we need to be more competitive and what's in the marketplace is to find employees but our dishwashers typically start at the ten to eleven dollar range so that the employees that don't earn tips we work from minimum wage and I do believe that that needs to come up over time that we can understand not on a crazy accelerated schedule but I do believe that those wages need to come up and then like the question that happened earlier we could try to do that but the problem is that we would be our pricing would be completely different for editors and you know for example in the water brain market I have four or five other restaurants selling burgers right next to me so I have to be price competitive as well so I minimum wage can come up my back the house employees go up my cost of goods start to rise I most likely would respond to that by increasing prices but if you uncouple tip minimum wage I don't have an automatic cost increase for every single tip hourly employee in the front house and their wages are well above twenty dollars an hour and I think that's a very livable wage in Vermont right now thank you yeah I guess the same question I asked the previous witness do you are your servers punished if they wear class wear or if customers walk out they're not considered doing that very rarely do we have walkouts and this isn't something that I think would make sense for a lot we remember when they walk out there's no tip and we actually from money at a server to cover that difference understanding that that's part of their wage and that they didn't get that but I think that's something we decided to do personally at the restaurant but we'll even do that but losses like dropped later something like that we would never consider do any of your restaurants participate in tip pooling no we don't participate in tip pooling I don't believe tip pooling is necessarily in itself a bad thing as long as the rules of tip pooling are followed which is we do have tip outs so employees would tip out a food runner and that kind of thing ultimately the rule is that 85% of those tips needs to stay with that tip employee in tip pools I think it gets a little bit sometimes questionable whether or not they're getting their full 85% but we don't participate in tip pooling and none of that money can go to as a rule currently in most restaurants is where I understand the follow-up in just one last in terms of figuring out the averages what is the percentage now of cash tips versus plastic tips which are harder which are easier to follow yeah well 80% credit card in so we're closer to 90% so most of our business is within credit card so we have visibility in most of the tips but yeah that is true that that's only well we have visibility too so there is some cash that we don't have visibility to that isn't reflected in that and they're required to declare something they're required to declare something but we don't have full visibility unless I don't know how you would necessarily be able to do that but we do try we encourage and we do at minimum they need to report the credit card tips but if we start to see that on a regular basis we make sure that they understand that they need to be claiming cash as well thank you top 40 I'm trying to I don't make these for tall people it's like trying to fly a united commuter flight to life not pleasant alright welcome good morning for the record my name is Tom I'm president of the Lake Champlain Regional Chamber of Commerce I will spare you reading most of my testimony and just offer a few comments first of all thank you for allowing me the opportunity to talk about the minimum wage bill and to explain the chamber's position on that bill like so many others it's not straightforward simple or linear a number of complexities and nuances to it all of which I think are within your control as legislators a bit of history is always good I think to set the stage for for the debate if you go back in history to the 40s and 50s 60s in this country minimum wage was anchored to worker productivity and low and semi-skilled workers saw wages as did other workers in the country go up as productivity went up and workers were able back then to be fully engaged members of their community they were able to do things like buy cars and buy homes and have a standard of life and living that most people describe to late 60s that began to shift for any number of reasons before in a amendment to the Fair Labor Standards Act believe it or not championed by that great liberal thinker Richard Nixon that workers in this country saw a 40% increase in the minimum wage we had a retreat from that over the years and once again we saw minimum wage for those people at kind of the low and semi-skilled wages stagnate and everything that attributed from that stagnation began to happen we've been trying to address that three years ago this legislature addressed that we were part of the solution for that staging an increase to the minimum wage over three years in an attempt to address it we're here again three or four years later still trying to address that and I think some of the same issues that we saw then are still in place today so with that as a backdrop let me give you our comments on on the bill the first and foremost I think that any increase in the minimum wage that you enact needs to see a concurrent move in the benefits cliff not just for child care but for housing and for health care services as well it does absolutely no good to increase the minimum wage and force people to have to make choices about well, ludes, housing subsidies lose child care subsidies now the Senate bill begins to address the child care subsidy to a degree as funds are available but there's nothing to address the housing subsidies which are very real as chair of the Board of Cots we have a number of apartments now in our new Cots building where people who are coming out of homelessness who have a job and who are looking to better themselves and their families lives those apartments they can only stay in those apartments because of a very generous philanthropist who makes up the difference between their housing subsidies and the increases in wages that they get now we're lucky most people are lucky but that is not a statewide policy so as you think about moving the minimum wage think about what you're going to do with people who are getting housing subsidies if you lose your house what good is the extra 10, 15 dollar an hour it doesn't make up the difference the same is true for high child care so better than do nothing than do something and after you hurt the people you're actually trying to help second we believe and this is from a Chittenden County perspective that the path to $15 an hour set out in the Senate bill balances the needs of workers and the fragility from our businesses from our perspective we believe this allows market forces which are already increasing wages of skill and skill trades to continue these forces we see them at work in Chittenden County food services, hospitality industries etc etc however from on small businesses and industries that cannot define or dominate their markets such as those that compete with national chains and those companies that have little control over aspects like the cost of raw materials have to have the ability to align their business plans with the increases that you propose in the six year rollout the last iteration over three years and 50 cents an hour over three years was doable this is going to be a tougher reach for those small businesses and it's a steeper hill of decline and I think some sort of carve out of those types of businesses especially those that compete with national chains should be considered seasonal work force let me address that speaking to our members from higher large seasonal work forces summering into recreational businesses in particular is their strong belief that there must be a carve out for them given their lack of elasticity in prices we've heard that from the previous gentlemen about restaurants the result of mandating large annual increase will unquestionably undoubtably undeniably resolve future hires you can only charge so much for a lift ticket and you can only charge so much for a bed or a head in the bed so you're really going to hire fewer people in that seasonal work force these are the people who are looking to get a second income make a little bit of extra money or we're going to go to what my union friends euphemistically call RoboScale you see them in all your supermarkets they're going to self check out more and more use of technology and ski areas and other places and fewer and fewer seasonal hires again providing an economic disincentive lack of a benefit for those folks finally I will echo what the last speaker said this chamber is unalterably opposed to coupling the minimum kit minimum wage with the minimum wage it makes no sense it only is going to hurt those people who the restaurants in this game treat this gentleman as a good example that those restaurants want to help your cooks, your back at a house staff one restaurant owner said to me my servers make up to $40 an hour you know I would rather give that extra $2.50 an hour to my cooks and my bottle watchers and those folks than to give it to have to put it into the base wage of a server that I know is going to skyrocket as $15 an hour and it's illogical because for those restaurants unlike mine in Chitton County which I will admit some of my restaurants are different than the ones you'll find in other corners of the state they still have to get to $15 an hour on average over a two week period or else it has to be made up so it doesn't I've heard the one-off stories of this employer this tip staff is afraid to say something to their employer because they're afraid they're going to lose their job it's not my experience that that is true it's not my experience that the vast majority of modern employers act that way towards their employees and those that do act that way towards their employees and punish them as lawfully and rightfully theirs I think should be prosecuted but I don't think you should make laws for the one and two bad apples in very large barrel that's our testimony take any questions you might have yes sir oh sorry I apologize so you know she's my boss yeah no I I fully understand but I I'm usually getting pilloried so I figure I'll go to the first one so if so if I have this straight then you're advocating for this $15 dollar hour minimum wage increase over six years but for car amounts for seasonal businesses and smaller rural businesses I'll let you decide how you want to handle smaller rural businesses my perspective is from Chittenden County you know my pizza delivery driver is from my members today my servers are making a lot more money than that it's already occurring organically in six years what my board what my executive committee, my membership told me in six years they're going to be a $15 an hour plus so I think there are others from other chambers and other regions here that can speak more eloquently to the rural areas I can't tell you about the Meadowee Valley or what's happening in Bennington it's just not my my bailout so would it make sense to look at this as more of a growing thing than the state? I think that there are examples around the country where they have looked at New York State is a good example where they have looked at regionalization and they're much larger states than ours I can't tell you if that model works well for Vermont because we're not New York State, we're not that New York City, you're going to go Buffalo and you've got this where else in here those places that we compete with for jobs that we don't like to mention so I don't know if it makes sense and I don't know if it's Burlington specific or County specific, I think it actually requires some deliberation but generally can we get in most industries the $16 to $15 an hour over six years yes, without breaking the bank I think there are industries in the where that's going to be difficult with different parts of the state because they don't have the same labor market pressures that we have in Chittany County it's a bidding war, it's a very small restaurant and not one of the glitzy ones that hang in there $20 an hour because if you want a good cook or a decent cook, you're going to pay $20 an hour that's not Chittany County actually, it's a member outside the county so that's not a very clear answer to your question but I think thank you representative for telling me that I think it's something to look at I think generally $15 an hour as a baseline state wage makes sense and you can get there over six years I think there are some parts of the state where that is going to result in hardships for businesses and therefore for employees I guess I'll just get the asset straight out and support this bill I'm giving you an opportunity because there's been a lot of stories the chair of the committee came in and said do you guys support the bill Do you guys support the bill as it came out of the Senate Would you support the bill with the changes that I have just said, and I've been clear As it came out of the Senate do you support the bill As it came out of the Senate I will answer that by saying I support the bill that came out of the Senate with the caveats that I have just expressed that you have to address benefits cliff and if you don't do the benefits cliff don't do it and they didn't do it well then you have an opportunity to as this political process you know better than I hope you have an opportunity to fix that in a house bill and argue the logic of not doing something that's going to hurt the people so I would you support a tax increase to pay for these subsidies that we would be forgotten that we have to make up you know I'm going to go back to the comments I've made for years and years and years when you have a budget that's in the billions because you know I remember starting when we was trying to get to 563 and that was a million so you're in the billions of dollars state budgets there's there's money that can be found and reappropriated and reallocated to priorities and this is your priority if this is the legislature's priority and the administration's priority to take care of the most troubled and disadvantaged low-skilled unskilled workers then there's money in the budget to find I don't believe in tax increases I'm not a big tax guy I'm a spending guy but we raise enough money you were talking about the well first of all the robo scabs you know like that term I kind of do but I also recognize that businesses that would use those would do that regardless of what their labor costs are disagree on that so we got well I'm gonna use the example of our local supermarket that put these in for a year to come out you know because because the cost of them well cheaper took away from the human interaction of the service of the service industry which was which was our local supermarket so there was this there was just this idea of whether it goes all the way in terms of the lowest service jobs but the next step up were seasonal workers I read reports received the seasonal workers to see this past winter had a harder time finding people the existing wages because the existing wages were fairly low and there is that competition at that level as as the restaurant tours have been talking about wouldn't a higher minimum wage at the very least I mean it's a minimum wage would it not attract more people to those to those jobs I think there are a lot of things that go into that one thing that goes into that is the abysmal foreign visitor foreign worker policy that's been enacted under this administration that limits the number of H2B visas for folks to come in and work in those industries I think if you artificially increase the minimum wage for part-time seasonal employees not the full-time employees but part-time seasonal you're gonna find ski areas hiring many fewer people to work in those lift-attended jobs and you're gonna find them using much more technology even though they're deploying technology now you're gonna find them higher if you are people I hear that from my members in the ski industry said this this will leave them it necessarily higher fewer people in those jobs because they can't afford it and the elasticity believe it or not the ski tickets is not infinite even though it seems to be infinite just generally speaking we were talking earlier about replacement costs do you guys have a you guys assigned a percentage of what it costs to replace an employee at any at any wage level like how much how much did you budget if you're replacing employees at the lowest level you know I don't have I don't have a number I could get you from various members a number because they all know that this is how much it costs the on board this is how much it costs the train this is how much it costs and I hear that but I don't have a number that I would state to the committee if you could you know because that I mean coming from coming from especially Virginia County that would be very useful for our conversation let me ask you could if you don't mind service what type of employee unsim-skilled semi-skilled coke bottle washer what are you looking for talking at this you know basically at this level this is what we're talking about it's minimum wage I mean I know I can say for a white-collar worker it's gonna cost two months salary three months salary four months salary whatever the industry but for this for this industry you know for the service industry I guess you know for people who are paying the ten fifty to twelve fifty dollars in an hour now yeah that would be great you know I just one point maybe maybe I'm being redundant if I do I apologize back to the benefits cliff I have one employer Chittin County employer but it has staff located around the state because of the type of service industry that they perform they're having a hard time getting their workers who are very good workers to work additional hours and take raises because of what that's going to do to the housing subsidies and so they would prefer to not work to stay continue not to move into a supervisory role etc. etc. because of the subsidy so back to you know I don't have an answer for representative Sherman in terms of what tax what I support increasing the doys I don't support increasing taxes but it's a really it's a real issue because that was a real-life example of employees who live in Barry who will take additional work or responsibilities because it's going to screw up the housing subsidies and I just think that's wrong matter of public policies I do not have this housing subsidies there thanks Tom for coming today being that Vermont is primarily a service oriented economy based on a lot of factors there's still a lot of the small individual storefronts how is that affecting or I should say how would this affect those environments it would be interesting to get that demographic perspective again and always it is in Chittenden County maybe brought issue my small members who run those types of stores on boutiques call them little shops in six years look at you know you there's enough of a line that yeah it's going to it's not going to be easy but they'll get there and in deliberations on the board those voices whether or not they were small manufacturers or small shops believe that you get there in six years I don't know what what it does the shops they'll get there it's secure we've talked a lot about it in fact almost solely about tip-wage employees this restaurant workers but statue calls tip-wage employees also hotel workers in tourist place workers do you have an idea of what other sectors we're talking about here no I was focused primarily on the restaurant sector I don't know what our hotels are paying they're back-of-the-house employees or who will protect employee in a hotel in Vermont would be the restaurant workers I've seen it always as the restaurant worker I can't think I could easily get you that information from the convention Bureau what kind of employees hotels are actually tipped folks I was not chamber chamber persons anymore I don't know what the right term for that is these days but yeah I can't remember I can't think of any other people who I solely on tips essentially solely on tips yeah no you really you got me there but I'll ask you well sorry for being clear as thank you very much for having me today and so basically we knew that the legislature was going to take up raising the minimum wage $50 an hour statewide and I lived in Burlington and I thought you know what I also did work river in 2016 and one of his main policy initiatives was raising the federal minimum wage to that and I thought you know what I think it would be a great idea we could try to create grassroots effort fight for 15 in Burlington to see what Burlington voters think not to convince them of anything just to see what they think and then to have that information go directly to the legislature because you know these are there's a lot of reps so basically I love this outreach effort where I helped to gain by part I contacted all of the Burlington City counselors and to ask them for their support which be completely honest was not an easy task a lot of pretty conservative there are some conservative folks on the council and I even had to convince somebody a few Democrats in fact why this review helpful and thankfully it worked out very well after a month or two of trying into 7th and January 2017 with a vote of 10 to 2 we just needed 7 votes to pass and Kurt Ray was the dissenting vote and also David Hartnett refused himself as a business owner so and then since then I know that unfortunately didn't pass out of your committee last session so but I'm very glad that the Senate passed it second half of the biennium and that you're taking it up now I wanted to speak specifically in regards to I've done a lot of outreach to really hear from you know Burlington voters and also people in the state to hear their experience I'm also a social worker I have my bachelors of social work I worked for Howard Center for five and a half years and I currently work for the schools in Burlington so basically I a lot of things I've just heard one of my friends in Montpelier for instance I've seen how she struggles having a daughter who's about four years old being a single parent and relying on minimum wage I've seen how she had to rely on you know actually it's a housing subsidy for the last many years in order to get by I don't know what would have happened if she didn't have that and I do encourage the house to certainly to certainly do something about the housing subsidy nobody should lose the subsidy that they have the roof over their head because the minimum wage increases and I'm very proud of the Senate's version of the bill I am very very proud of their work in terms of resolving the benefits as you in pertaining to the child care subsidy but I do encourage you as Tom Fordy said to do something about the housing subsidy that deserves definitely a good some sort of resolution for those people and I also I love to hear different people's perspectives including those that are different from my own so I do agree absolutely and really like for 15 degrees with raising the minimum wage to $15 an hour we wanted it a lot sooner but you know it I do understand the plate of businesses and I think that and yes they're gonna have to increase their wages or they're going to have to increase their prices and I think that over a six-year span is is more doable for them than a four-year span and but what I and and I just recently graduated from UVM and before that I started my career at Howard Center and I actually while I was in college I was a server at three different restaurants so it's really interesting for me to hear a lot of the and I have a lot of friends who are servers too so it's interesting for me to hear how a lot of restaurant owners are saying you know we do we do not agree with paying we don't want to pay our employees half of the minimum wage we don't want to do that they're already making 20 something an hour and I'm here to tell you that's not always true I'm here to tell you that there that you do not get the same amount of tips every single night that you work you cannot predict who's going to come into the restaurant you cannot predict if there's going to be an accident on the interstate and the restaurant isn't is only gonna you know have maybe ten people interning I remember one Sunday I worked I only made $40 in tips and I worked I believe six hours or maybe longer than that $40 and I and I also I'm here to tell you that I didn't know this when I started out like I I've heard that all servers make so much money you know that's what a lot of people here so I thought okay well half of the minimum wage is at that time I believe it was $4.25 and then I multiplied okay well I'm gonna be working 20 you know hours a week so four times that's about you know like a little over eight a little over 200 you know no a little under 200 sorry so I was thinking okay well and that plus whatever I'll make in tips what my paychecks actually reflected was $0 in tips every week not every single week at the most I got $50 every week and at the end that only happened I believe once and at two restaurants that I worked at so I worked like part-time and but my paycheck was $0 I would get direct deposit and I wouldn't get any wages and I didn't understand why I wasn't and then I learned that some restaurants not all of them I will say some of them don't pay their servers any wages if they make above then the current minimum wage so I'm here to tell you that some restaurants do do do that and it was a significant you know back set for myself and some of my fellow employees to know wow we don't even know what we're gonna be making when we come into work we can't even rely on the minimum wage to be making for our question because if you're I think you're I think you're talking maybe these particular restaurants weren't abiding by the law but we actually have a law in place that says that they have to match minimum wage regardless of how much anybody was making and that minimum wage is not just 425 or now 525 it would be up to whatever that actual minimum wages so if it's an issue that's a different issue no that's not what I'm referring to you said you weren't making minimum wage on some of those sorry to clarify sorry let me clarify what I was saying that I what I believe I just said is that if I made above the minimum wage so just say if I made $15 an hour for an hour that I worked then my employer wouldn't pay me the 425 plus the because I already made $15 an hour I need more than the $10 an hour current for that is the standard so what I'm trying that's an enforcement okay so I think so about the minimum wage yeah just want to make sure okay well thank you for letting me know that and I was confused as a server so were some of the other folks but I'm happy to I'm here to tell you as a server for over three years that not not all restaurants do the same thing there was only one restaurant that I had where I was paid for my wages on a regular basis and and I and I had some servers who are my colleagues who prove that with their $0 and wages for the pastes so I'm just saying that that's an important thing for you to know about at least it's not the main reason why I was here to talk I just wanted to so the vote was to have a ballot advisory question on the time we can get ballot asking for LinkedIn voters that they support $50 an hour statewide minimum wage and to contact their state reps so basically asking do you as a voter support this statewide and use are you with your reps that was essentially what I said so it was on the ballot it was on the ballot so the vote was tended to to get it on the ballot so then it was on the ballot and on town meeting day I believe it was March 6 2017 that's 75% of all of the people who voted that day in Burlington voted in support of it so thank you for reminding me of that last part so that was basically just to send a message to the legislature that this is really what a lot of your testimony years you know I feel this I feel that you've done any economic analysis and two horses just your feelings and oh no I to be completely honest I know I've never testified ever on the tip minimum wage before I'm just telling you my own opinions at the moment just for and not just my own opinions I have a lot of colleagues that are servers who have who I've spoken to and they have the one issue that they want to me to bring up today and I have some other things to mention was the fact that some employees don't always receive their current work because they take taxes out based on everything so it's completely possible and I was a tip server for a lot of them to have my day that what they made with minimum wage they have more taxes taken out because that's also based on the tipsy declare so it's a completely possible that that that probably because I don't think restaurant owners are out there trying to be illegal oh yeah I don't think so either right so that that's actually legitimate the taxes taken out we will render a zero balance and that will be on the paystubs okay so I guess what I'm saying here is you need to do some DPL and economic work here analysis no I have three questions here but I just wanted to help you out with what's going on with you and your friends yeah and I'm sorry just to clarify this is mainly my colleagues I'm sorry so what I when I'm done already just not just to talk to my friends I've talked to a lot of a lot of people in Burlington and you know sometimes just people from UVM where I you know people who I didn't even know who were in a completely different major who had similar experiences or people you know who I met doing outreach the farmers market or wherever so I was just trying to relate to you and I'm sure I don't maybe I didn't look close but that's really not the main reason why I'm sorry to have distracted from that I also wanted to mention that sometimes which some of you may know and in restaurants there can be an overstaffing issue so this happened at two of the restaurants that I worked at and I'm talking today to mostly talk about my experience which I think as a server which I think is unique from the other folks who have spoken today just to tell you what I've experienced and what some of my colleagues have also experienced and so normally you know you have this a really busy restaurant like three tables if you and then you're able to turn the tables quite frequently and then there's there to be however many servers but if if some reason there's more servers on the floor than they only have like two tables every you know hour which can really significantly affect your ability to make a regular a normal amount that night that you could expect on so I think that that's an issue that a lot of restaurants have sometimes and that is something that needs to be I'm not necessarily not necessarily addressed legislatively but I wanted to let you know that the only thing that serve servers should be able to count on at least making half of the current minimum wage I think that that just not allowing that would be a disservice to service because there's so many unpredictable things that happen in restaurants especially in terms of volume and how many people are there to work or how many people you know aren't there to work that night so those are the two main things that I wanted to talk to you about and and I hope that and also I was thinking also that being a server is I know that you've been one but it's an incredibly hard job is is I to be completely honest I would say it's somewhat comparable in terms of energy exerted as some of the other jobs that I've had working in mental health and I rather than getting emotionally tired you can get extremely physically tired and I think that it's and I think that it and servers work for their money as you know you can go to a wonderful restaurant but if you don't have good service you're not gonna come back and I think that it does a disservice to to those servers to have them to have them somewhat be regulated with like oh well if you earn if you do too much of a good job then you already earned this much so that's your bad you know I think that is important to have a half of the minimum wage that should absolutely be able to count on half of the minimum wage and because I think that they should be rewarded to be completely honest for how hard they work and it's not like the employer is giving them those tips they are the ones that earned it and they are the ones that should be able to bring it home because again those tips aren't always consistent so those are the two main points that I wanted to talk to you about from things that I've experienced as a server for three years I'm not a server currently but also as well as my colleagues and those who have done our issue thank you thank you for having me for the record I'm Kerry Brown the executive director of the commission on women and I appreciate the opportunity to speak about the minimum wage I provided you with some written testimony that's a collection of facts and figures and many of which I believe this committee has seen before and not go through all of those in detail you you can have us for your reference to consult as you would like to but I do just want to make a few key points so the commission on women in the 54 years we've been around we've been concerned with women's economic security for that entire time this is a foundational issue for us and one of our policy statements is that we support legislation policies programs and initiatives that promote a little income for volunteers and so under that we are concerned with anything that's going to bring reminders into the range of income but more recently I think since the last time I spoke with you all about this the commissioners looked more specifically at the idea of raising the minimum wage and this is something that we've spent well a lot of time on over the years but over the past six months to a year in particular we've had quite a number of guests come in we've looked at lots of different research we follow very closely what the legislature has done because the commission has recognized that while raising the minimum wage in on its face may seem like a quick and easy way to get more money into people's pockets it's actually potentially a bit more complex than that when we talk about benefits plus overall economy and so after that entire process the commissioners then chose to vote on whether to support or not support raising the minimum wage as a tool to increase for monitors economic position and they voted in favor of that so while they tend not to take positions on specific bills recognizing that bills may change they did take a position on this issue the specific issue so the commission is in support of raising the tool to get everybody closer to the holding the wages and minimum wage in particular has a proportionate impact on women in Vermont and I just want to make a couple of points about that we already know that women in Vermont are in a somewhat more precarious financial situation than men are and so anything that we can do to address that is going to have a disproportionate economic impact more women than men are working in minimum wage jobs nationally and in Vermont as well if there's a national some national economic data that says that if the minimum wage were raised $15 by 2024 about 33% of women overall would get a raise in that but we look at women of different races or different demographic groups we see different kinds of impact so black women would see it raising 43% of them would have an even greater impact Hispanic women 38% raise and working single mothers 45% of them would see a raise and this is particularly important to to the commission because the benefits was one of the issues we spent the most time talking about looking at the analysis that suggests that single mothers are potentially the ones who are most impacted with the loss of the old income when the minimum wage goes up and so the fact that this bill includes a means by which to potentially address that is very encouraging and it's one of the things that they didn't commissioners didn't put it into their official vote but made it very clear that they they just feel extremely strongly that raising the wage has to be accompanied by some means to offset and I just a couple other points to make that you know we're very concerned with the wage gap the difference in earnings between men and women and national analysis shows that a higher minimum wage is linked to a lower gap between men and women and I think that maybe part of what accounts already for the smaller gap that we see in Vermont between men and women higher minimum wage already many other states and then the the getting back to sort of related to the benefits issue when we see a raise in earnings or single mothers especially we see potentially lower impacts on public assistance in other areas so that is a complex you know probably you all work out to make sure that we see a savings at the same time as you're trying to offset any kind of loss in benefits but I believe that overall there's potential there to see that savings in that strengthening of the economic situation of women and families for us in the consoles so we've been talking about the tip minimum wage this morning and my understanding from the research is that when there is the tip minimum wage is a lesson percent at the minimum wage there's an increase in sexual harassment so I'm wondering at that is something that you all have looked at of the differences and you also mentioned women of color and since people of color make less tips than white folks when they're servers wondering if you talked about that perspective of women of color making even less money and enduring more sexual harassment as tip workers that is something that we started talking about and have not done intensive research into but the fact that there is clearly between sexual harassment and economic impact on women and that women are more likely to lead their jobs if they experience sexual harassment and that tip workers are particularly you know like in a restaurant are experiencing sexual harassment often on a daily basis and so that is definitely linked I can't give you numbers or what that what the results are but it's of growing concern to several of our commissioners have raised that as an area that we need to focus on to get some more data that was national data that estimated that an increase of $15 minimum wage by 2024 results in 33 33% of women next witness is by phone I'm Helen had chair of general housing and military affairs in the Vermont house hi how are you this morning oh and well nervous but well we're happy the committee's here we'd be happy to hear any of your thoughts Senate bill to raise the minimum wage okay from a business perspective right I'm going to general store in Vermont since 2004 so that's a little over 14 years I've never testified to a committee about my concerns over any you know government issues however I feel I need to step up to the plate about raising the minimum wage and its effect you know on small businesses such as my general store you know I don't think you're considering how raising this or maybe you I feel that you need to consider how the minimum wage will affect the bottom line of small retail businesses you know so that we can continue to be profitable you know without reducing staff raising or you know raising costs are reducing the hours of operation you know the type of business that we have I can't just get a self-checkout like McDonald's is doing or Walmart you know that would help me reduce the number of employees so I can maintain you know being profitable if this increase happens currently we have four full-time employees and three part-time employees if you know the part-timers get raised to 15 an hour then the full-time they're going to have to be at least 17 an hour which I can't afford unless I raise the prices of products and you know for instance I have milk that I pay or 25 a gallon you know wholesale and when I sell it I can't sell it for more than that I sell it for five dollars a gallon you know which is about a 10% profit the 75 cents that I make is split between labor mortgage the cost to keep it cold you know with the minimum wage increase that is being proposed you know employers face an additional 13 to 15% payroll taxes on top of every dollar the wages are increased we work on a very you know fine profit margin and when it comes to our retail in Vermont and unfortunately that will in fact it will affect our employees you know the most you know unfortunately it will affect the employees and if I'm paying 15 an hour how much more do you think I can raise the cost of milk in other products if I'm too high then I won't sell any milk therefore I'll have to reduce the number of employees I can't stay in business if I'm not making money as a matter of fact over the weekend I had to raise my daily prices in order to offset the last price pay increase and what point will I lose business because my prices are too high you know I value my employees and want to be able to keep them working but I need to be able to afford to pay them with the proposed increase it will be difficult I do not feel that increasing the minimum wage will help anyone because it will drive up the cost of living and you will actually find more people in the employment as we are forced to reduce the workforce that are to remain profitable but such a small margin that retail businesses make according to my account a small business such as myself averages about a two percent profit and just for the record if I could afford to pay my employees that $10 an hour you wouldn't be telling me that I need to do it you know I appreciate my employees you know when at this time I feel like I can't run my business without them but if I'm forced then I'll have to find a way to run my business without the people I value and currently my husband and I don't even make minimum wage you know when you calculate how many hours that we work you know to offset some of the hours and you know you don't think we'd like to make 15 an hour and you know it's just I'm just praying that the votes of how it will affect small retail businesses and vote against this wage increase you know I don't feel that it will help the economy and small businesses such as myself I mean my husband and I have been even talking about all right if this goes through do I now quit and go find a job someplace else so I can offset and keep our business running we're not doing this to get rich we're doing this because we love what we do we love our customers and you know love being able to hand the paycheck over to our employees in fact two of them make more money than my husband and I do 15 an hour it's just I don't see how we can continue doing what we're doing right now you know I really hope that you guys you know take how you know you don't see my bottom line you don't see my $2,000 electric bill in the summer and all of our expenses the insurance the taxes and whatever and and now you want to tell us that we need to pay higher because honestly if I could afford 15 an hour they would be getting it because I value them so you know I'm not sure where you guys are going with this but I don't think minimum wage at 15 an hour is the right answer and I truly appreciate you guys allowing me to you know get on the phone and speak with you guys and you know there are so many other points that I can bring up but I know you guys have you know lots of other people that want to speak and you know if anybody wants to contact me individually I would love to talk to them we have a question here sure representative Smith okay thank you Lisa I don't I'm not very familiar with the town of Benson or how big or how small it is but are there other businesses in town that feel the same way that you do about this or I would say yes we have another general store in town we have a restaurant we're only a town of about a thousand people thank you Lisa thank you very much for weighing in with us okay and and if anybody would like to call me they can call me directly if they want to know more or my husband because we have a lot of you know valid points we've been doing this for a long time so thank you all right thank you very much thank you yep bye bye first of all for the record my name is David Snedeker I'm the executive director of the northeastern Vermont Development Association the regional development corporation that serves the Northeast Kingdom and I'm also currently the chair of the regional development corporations of Vermont of which there are 12 statewide so many examples I give in my testimony which I'll probably follow comes from my experience in the Northeast Kingdom so we can say that so first of all thanks to your committee for taking testimony on the supporting issue regional development corporations every month have been hearing from many businesses about their concerns regarding an increase of the minimum wage to $15 an hour we feel obliged to inform the legislature of these business concerns and there are a number of economic considerations at play here and we believe it's but we believe that by bringing these to your attention we can help inform the policy discussion Vermont is experiencing a period of historically low unemployment as a result businesses are making significant investments in workforce training to improve skills of new workers from the shallow pool of applicants that they see notably many businesses are also making investments in automation in my region we see businesses such as cheese makers now buying equipment that replaces the jobs people had for turning and washing cheese we have metal manufacturing companies that are moving to more automated robot systems also to increase productivity for their business that also replaces workers so I think a change could potentially accelerate automation for some employers many employers particularly in the manufacturing sector are concerned about the potential impact of increasing the minimum wage and the upward pressure this would place in the wages of existing workers other existing workers and the effects on their ability to find a qualified workforce some businesses that located in border communities will have the option to move investments in employment across the border in my region for instance we have a company like Ethan Allen that have a plant in Orleans in Beecher Falls but they also have plants in North Carolina where this is not an issue and Honduras were certainly not an issue and I say industries and metals manufacturing company in St. Johnsbury recently constructed a plant over in the across the river New Hampshire and New Hampshire is also not pursuing this initiative right now for a higher minimum wage so there's certainly the ability for some companies to shift work to areas where the workers may not be paid as highly also we've had a number of Quebec businesses come to our region over the last few years and a lot of these companies have their parent facilities in Quebec talking to these companies it's my understanding that this $15 an hour issue our wage issue was defeated in Quebec so I think these companies with parents in Quebec should something happen in Vermont they can also shift work back to Quebec small businesses in retail hospitality and tourism currently employ the majority of minimum wage workers these sectors already operate on thin margins or at thin margins and are extremely susceptible to economic variances in our conversations with small business owners many clearly state they do not have the ability or desire to simply increase pricing to support increasing the wage of their employees some explained that they may have to reduce their current workforces to remain viable youth employment has been identified as necessary to create the workforce of tomorrow Vermont has many programs being implemented attempting to induce introduce students to career path here in Vermont a student's first job is a critical step and also a stepping stone in learning how to be an effective productive employee businesses that raise concerns that they may no longer be able to provide youth employment opportunities for entry level jobs at the wages being accomplished contemplated while wages are a critical component to economic welfare we ask the legislature to consider the cash value of benefits employer provided health care paid sick days vacation time and more as a significant benefit cost businesses are concerned that the wage pressure created by significant increases to the minimum wage will force them to reduce employer contributions to the employee benefits package finally the regional development corporations have questions on how the increase in the minimum wage will impact state economic development tools both the Vermont employment Britain Senate and the Vermont training program arguably the two most effective economic tools that we have in the state are tied to multiple the minimum wage the proposed increase has the potential significantly diminishing the value in utilization of these programs unless addressed by the legislature while we fully understand and agree with the desire of the legislature and others to see that all citizens of Vermont have the opportunity for economic security the business community we support would ask that you also consider the potential impacts across the economy and seek answers that do not negatively impact for month's ability to compete for commerce who concludes my testimony Questions for reference students so being up in the kingdom you mentioned about going across the companies moving across the border do you find that you have an influx of workers coming in from New Hampshire because the minimum wages are so different that Vermont companies are attracting or have a choice of war employees because if you can work for $7.25 an hour you can work for $10.50 an hour at that minimum wage would you not go across come to us I know there are in New Hampshire residents that are employed in Vermont manufacturers particularly along with a lot of manufacturers in the St. John's Bury Linden area and you know just talking to the companies they sometimes struggle to find people locally so then they recruit from neighboring New Hampshire in the Connecticut River we have a lot of communities have a lot of close ties you know on both sides Representative Strong thank you for coming and representing the northeast kingdom could you elaborate a little bit more on the Vermont training program you said that's tied to the minimum wage what is that training program for Vermonters I'm guessing younger Vermonters yeah the Vermont training program is one of the two major tools that we have in the state and basically it's a training money that are provided to a business to train new or existing workers and there's a wage threshold which at the end of the training the worker would need to be paid that's just over $13 an hour and those thresholds over the last few years were lower to fit for rural areas so we actually have more companies from my region and other rural regions just vetting in these programs and they work previously but the program itself covers up to half of the employees wage during the training period what kind of jobs is that training for a wide variety it's a wide variety of jobs that can be in any industry sector and we save a lot of manufacturing companies in our region he talked about opportunities for youth employment do you know of any businesses that utilize the exemption in the minimum wage laws that allow them to pay students a lesser wage for the bulk of the year thank you thank you for having me Betsy Bishop with the Vermont Chamber of Commerce had some good testimony here today much of what we will talk about but I think it's fair for you folks to know that the Vermont Chamber does share your concerns about growing wage disparities in the ability of working Vermonters to earn a living and for the businesses that we represent we think it's paramount that there's a good balance between our workers and our businesses because without good workers that want to come to work that put in an eight hour day or more and get paid well to do with benefits our businesses cannot succeed so there is a balance that works together with them is something that we're always striving for but both sides of that equation have to be helping so we are today I'd like to register some concerns about the impacts that we have with increasing the minimum wage at this accelerated pace the bill before you S40 represents a 43% increase in wages and over the next six years on top of a 20% increase that we've had over the last four years during that same time we don't anticipate the need to perform at that same level we can always prognosticate into the future exactly how much we can look at what the economy has been doing over the last number of years we've seen that economy grow anywhere from 2 to at the high end 3% so putting wages at that accelerated pace when the economy is not keeping track with that is difficult for us and as for some of you who might not have been part of what I would call the grand agreement four years ago the Vermont Chamber did support the accelerated minimum wage over the last four years with a fourth and final year going into effect just this past January that was the 20% increase so we supported that four years ago we took that agreement seriously we supported it at that time and we think that your committee it would be great if you would adhere to that and so we are supportive of increasing the minimum wage I think you need to hear that that most of the businesses are supportive of that according to the current law that we have now which that grand compromise was four years of accelerated minimum wage increases and then the next increase would be according to CPI keeping in line with the economic growth that I mentioned that 2 to 3% so we would like to see now that we've gone through that accelerated pace we would like to see the minimum wage increase at the level of CPI in accordance with the current law I think one of the other things that was brought up by the store owner and some of the other business folks that were in the room is that it's not just about minimum wage there is a cumulative impact of the costs that businesses have to bear some of them are mandated by new bills in the government some of them are just the cost of doing business that you may or may not really be able to put a dollar number on but we see those as thinking about from a businesses perspective and how they're going to pay for increased wages even the CPI or the past wage increases that we've seen I think businesses are really looking at okay so what are the wage goes up what else do I pay that's attached to that wage the unemployment insurance rate the workers comp insurance rate the payroll taxes the federal tax and they're also trying to do their best in supplying benefits just recently going through quite a change in health care benefits and penalties that were assessed and regular increases there as well just the insurance market increasing so when you calculate all that together a dollar in wage sometimes that can be as much as an additional 25% it really depends on it could be more than that it depends on the businesses benefit package and what that includes I would also like to tell you that the Vermont Chamber supports some of the language around the tip wage that you've talked about we believe that you should separate that out and keep that at 525 an hour a lot of the conversation that I've heard is about whether or not tip wage employees deserve that $15 wage I think there's no or whatever the current minimal wages which is 1050 an hour I don't think there's a notion about deserving the law says that if you don't make 1050 an hour in tips with this lower minimal wage plus tips your employer has to pay you 1050 an hour or whatever the minimal wage is there's no dispute about that so even if you keep it at 1050 an hour and don't pass this bill and keep that at 525 an hour if it's a slow day at the restaurant and you're not making any tips and you haven't turned those tables you're going to get paid that minimal wage it's the law it has to be done the employers are adhering to that so even if that increases to $15 an hour is under this bill and you leave the tip wage at 525 and it's a slow day we would have to pay that tip wage worker that $15 an hour so I think that's something that we would encourage you to visit excuse me and look at that so finally I just have a couple of suggestions that I'd like you to think about as you continue to deliberate in this bill we think that we ought to allow the COLA the cost of living adjustment the CPI increase to go into effect and increasing wages in that way in accordance with the economy allowing employers to absorb those wage increases those giving them some sort of amount of certainty with that we'd also like you to maintain the student exemption that is in that representative Stevens you just asked the previous witness do you know anybody we keep looking for those people do you pay the student weight we haven't found them either but I was heartened by representative Brickland's testimony in your committee a couple weeks ago and think that probably one of the reasons that there isn't a lot of discussion around the student wage from the employer standpoint is there's a lot of confusion so I would encourage you to maintain the student exemption and adopt some form of representative Brickland's clarifying language around that that he has presented to the committee and then finally decoupling the basic wage rate from four tipped employees thank you representative Stevens offhand what the percentage of minimum wage workers and your your client businesses are I do not it's not everybody no it's not we've actually had many employers some who've actually come and testified here who are already paying above $15 an hour because the the market demands that we see a lot more activity in that direction in our with our Chitton County employers than in the rural communities in the rest of the state and making sure that you can not only attract those employees but keep them oftentimes that wage will demand that above that just a more philosophical question we talk all the time about legislators say the most important new jobs and certainly the chambers agree what how would you define at least in terms of salary what a good job is not only from the employer's perspective but from a business owner's perspective because we hear these we have two sides I can't live on the amount of money that I'm getting paid at this minimum level and business owners are saying I can't keep my business going unless I have you know can pay at this lower level and that to me is really the biggest canyon between this in this conversation and you you've represented the chamber for such a long time just it's an interesting conundrum that you bring up and it goes along with the other issues that we're wrestling right now with as well which is we hear from employers that they have all these jobs I can't find people to fill them and then we hear from people I can't find a decent job so there are these things that are happening including what you're talking about what is a good job I don't have a strong pat answer for that to respond immediately but I'll give you some of my thoughts since you asked I think wage does come into that I think benefits come into that and I think what a good job is is different for individuals I've had a series of jobs over my lifetime I think somebody was talking about what it's like to be a wait staff person and those people if you've ever been a wait staff person you've visited you for the rest of your life and you've become a good tipper in your future there used to be a little restaurant here on the corner called the stop yard many years ago where I got my start and it was a horrible job because it was such hard work but I think that at that time it was a good job for me I learned a lot I made tips I was able to make a wage I wasn't looking to live on that wage but for me at that time that was a good job for a different reason than other jobs so I think depending on where you are and that I don't think it is just salary although I do think that is an important component I think work environment is something that people are looking for as well you know how do I balance that having a work life balance also is my employer flexible and can be flexible what are the benefits being offered here perhaps this job I get a higher salary but over here I get no 401k contribution or no health care benefit so there's a lot of things that go into that or maybe this is a job that doesn't have a high salary but I'm going to stick it out for 2 or 3 years and learn something so I can get to that better job that I want I think it really is a philosophical discussion and my guess is if you ask everybody here about do they have a good job it's going to depend on many different factors yes thank you Betsy and we had the Chamber of Commerce testifying and of course that's shitton county which has I think quite a significant different impact than the northeast kingdom so you represent a lot of different chambers and so that particular opinion from that group is that is it a diverse opinion in the different chambers so just to be very clear I don't represent any other chambers but the Vermont Chamber the way the chamber chambers work in this state we have about 35 different chambers of commerce and they're all independently owned there's no like parent-child relationship and we all have independent boards that are governed by local people so my territory is the state so you're absolutely right I have a very diverse group of people everybody from restaurants to manufacturers retail education health care so there's not one area to look at in my formal written comments that I will submit there's a couple of examples from employers that have actually written in to me about specifically how they will look at this so I think you know I hear different things from each of those industries as well as regions thank you for clarifying that Hi Betsy thanks for coming when you do your disaggregation of your data from the different chambers if you wouldn't mind looking at some of those other sectors it seems that it isn't just an anomaly it's just that the restaurant business seems to be what we've been hearing or who we've been hearing from but to get that perspective of the downtown small business the little retail shop you know on the corner the repair facilities you know things of that sort you know will just be helpful and I do think those businesses I think you're hearing a lot from restaurants around one section of that sporting which is that tip wage and I've heard from many of them some of them are not concerned about the overall wage rate but they're concerned about that tip wage I think those small businesses are the ones who are at least to show up here and talk I was pleased to hear the woman who called in from the local store I think that's helpful we hear that perspective a lot what else we hear from sort of what I would call those main street type businesses is you know it's hard enough to stay in business with all of these things and fighting the big guy whoever the big guy is in town you know they'll remain nameless but there's often a larger store somewhere nearby and they're trying to maintain that vibrancy of the downtown with that local store flavor so thank you I'll definitely be able to segment that thank you Aaron Segrist lots of testimony today I guess I should have coordinated a little bit because I have some of the same information so I'll try and do my best to spare you repeating that information for the record Aaron Segrist with the Vermont Retail and Grocers Association we represent about 700 members across the state actually a little more our membership is inclusive of a variety of business types and models they're collaborative and extremely diverse where members include retail grocery stores, convenience stores, distributors, food producers, business service members so first I'd like to take a quick second to share with you a conversation I had with a member of this body last week they told me that their partner had a couple businesses and they said that they treated their employees well and they would make every accommodation they could for their employees whether it was giving them extra time off giving them some flexibility and scheduling and they would even take a pay cut to ensure that their employees could get a pay increase and I'd like to share with you that that is exactly what a majority of the businesses in this state do I grew up in a small business and I watched my dad do the same so it's a little personal but VRGA and Vermont is made up of small businesses that service stewards in our community across the state we support local organizations they hire young adults with little to no experience and train them with the foundation to move them up in the real world and quite often they're working right alongside employees seven days a week so more often than not when we talk about increasing the minimum wage we hear about the impact to employees however this mandate would require employers to face an increase of labor costs of nearly 50% over the next six years unfortunately inflation is not keeping up with that demand so businesses rightfully so have significant concern when it comes to deciding whether they can continue to employ employees or continue to sustain the business altogether we can all agree that having more Vermonters earning higher wages is a worthy goal it's a goal that everyone shares however businesses again have growing concerns on needing these increased demands such as S40 when the wage increases by a dollar but actualized labor costs is anywhere between 12% to 15% higher than that so $15 minimum wage would actually be equal to $16.80 per hour further the increase does not take into account the additional benefits that employers and employees negotiate paid vacation, additional training, health and dental insurance, etc. some of the facts that's here being shared in addition we're facing extremely low unemployment here in Vermont and while this is positive news a simple supply and demand has already increased wages to a point where larger stores are reviewing options to automate and smaller business owners are working longer hours and keeping their most valuable employees one member shared with me yesterday that Sundays are for day off and she's now spending her Sundays sorting bottles and cans because she can't afford to pay someone to sort those bottles and cans I have members that would like to expand but they're required to have a certain amount of funds on hand before they qualify for a loan expanding means more employees in this state but they can't do that when taking into consideration groceries, housing, utilities, transportation costs Vermont ranks 10th most expensive state within the country while the latest version of S40 works to address costs of childcare strongly urge the committee to consider not moving forward with S40 without fixing the institutional issue that is holding most vulnerable homeowners back the entire benefits clip I have members on a daily basis tell me that they've offered their employees a pay increase promotion and they come back the next day and say I can't afford to take it they're good employees they want to keep them but the employees cannot afford it this is a huge issue and I would ask the committee to sincerely think about the entire benefits clip so that being said some questions some suggestions for you also to consider continue with the current law tying minimum wage to CPI and taking a much deeper and larger look at the entire benefits clip I would ask that you consider including a reduction in wage an employer offers a combination of employer sponsored benefits which may include health insurance, retirement benefits, time off in excess of what is already required by the law many businesses have reported that they offer and match retirement funds for employees many have told me that if the wage increases over the next six years this the retirement fund is certainly in jeopardy of disappearing for these employees and I would ask you to maintain the student exemption currently under section 21 VSA 3883 so currently in law or consider a training wage that would allow less skilled employees the opportunity to gain employment at a rate that employers can comfortably afford so maybe they start at a lower rate but after six months they go up to the minimum wage and again that's only if the committee decides to move forward with increasing the wage that being said I will stop there and happy to take any questions questions for Aaron representing the students are you aware of any of your clients who use the training wage or the existing student wage so yes actually representatives representative Brinkland's constituent is a member and so my understanding of the situation is the gentleman hires intellectually challenged thank you I lost the word intellectually challenged employees so they can't live on their own they're still living at home they might you know they're very confident and hard it's just they might not be able to again live on their own and so it's an opportunity for those employees to get out in the community well not necessarily being required to have you know the full responsibility of finances on their own so one of the issues that we talk about when we talk about minimum wage or two it's either training wage or beginning wage but the statistics that we also have been that have been shared with us show that a large percentage of the people who work for minimum wage are women and a large percentage of those folks make our single moms etc so they're not beginning these are jobs that show apparently no income growth where are those jobs that show knowing who are the companies that show no income growth to people with families and you know so that it makes it I mean these are the things that we try to balance again with the real life problems of the workers versus the real time needs as you described as the employers but if I if I read a statistic that says 58% of the minimum wage workers are women adult women and that most of the minimum wage workers are over 30 that's not a training wage or that's not a training wage that's kind of a real existing thing and a lot of those are in the service industry where you represent so how do we balance that reality with this other one that says we can't afford to pay more that's a fantastic question I personally don't know where those jobs are however I think it's something it goes back to the enforcement issue if you're not treating your employees well and there's there's not the ability for them to move up then we can't enforce that by increasing the minimum wage we need to encourage businesses to be allowing those employees to gain more training we should be encouraging those businesses to allow them to move up that's another point I would like to make actually is a majority of the stores in this state are owned by independent operators if we increase minimum wage to $15 over the next six years a majority of those larger stores have the capability of selling off to large corporations that may not support employees in the essence that this body would like to see only disenfranchise more mothers or more women who are stuck in those jobs the state has made an effort to do some workforce development and workforce training I think that we as a state need to take advantage of that we need to be coordinating more proficiently and it shouldn't be state versus employee or state versus employer we should all be working together to move those people up and out of those same positions but it's not something that we can legislate them out of and keeping it maybe at large on that and just give maybe some examples of seven generations not a minimum wage paying company but they were about a unilever and the business is growing it's a stable I don't want to drop any names but if you're a convenience store there are four large chains in this state all owned by firm owners we all need gas there's always interest in buying up those convenience stores and it could be a multinational corporation who comes in and does the basic that they need to do they'll automate so that again eliminates jobs we are pushing businesses to the point where they are considering selling their businesses and in business you sell to the highest bidder or you sell to the next person that knocks on your door and that might not be the same type of business owner that this body is expecting to have in this state or would like to have in this state I think we all would like to have those business owners that care for their employees that move them up in the ranks but we need to understand that if we're selling businesses off to you know outside corporations that they might have different a different mentality representative Smith retail gross association doesn't go along with this bill or does go along with this bill we oppose this bill I'm very tempted to keep rolling through our witness list we have three people that I know of I'm also aware that we've been yelling for over two hours okay I hear a call it's a good day for us as members William Moore good morning thank you for the opportunity to be here for the record my name is William Moore and I'm the president of the Central Vermont Chamber of Commerce we are basically the Chamber for Washington County and a little bit beyond we have members throughout the state but generally in Washington County and we're here to be respectfully urge you to reject S40 what's our position we oppose it we did support the current law back in 2014 and we believe that that's the way to go because it does have the incremental increase based on our cost of living I've previously submitted my statement to you so I'm not going to read it I encourage you to please do read it because it is brilliant but what I'd like to say is especially like page 3 of the bank I like page 5 is even better but there are some points that I do want to make and that includes that minimum wages are generally those at the intro obviously there are some that are not at the intro but generally they're considered that and a minimum wage doesn't ever intend to be a livable wage or a living wage that's actually created in order to prevent employees from being exploited and it would impact the depression we're concerned that the increased proposed go beyond what the intent of minimum wage is study of the U.S. Department of Labor shows the median hour wages in all occupations in Vermont in 2016 18, 23 per hour well the mean hourly wage is $22 what that indicates is that most employers are paying at or above the premium minimum wage which is $10.50 they're paying at or above the $15 minimum wage what that means is the market is driving wages in order to get employees, employers are paying higher wages there have been studies conducted that indicate what the max increase in the minimum wage are I think one that's very telling was done by the Heritage Foundation in 2016 I'm going to read it because I find it very important it says that starting wages of $15 per hour mean full-time employees must create at least $38,700 a year in value for their employers including wages, employer payable taxes, affordable care and aid penalties such a high hurdle would make it much harder for less experienced and less skilled workers to find full-time jobs many of these workers are not yet productive enough to create that much value for their employees and businesses simply won high-level costs that's the effect of a $15 minimum wage for employees producing that type of income to the business or as a business action going to be operating at a loss other studies have been conducted including one on Seattle by the National Bureau of Economic Research minimum wage increases wages and low wage employers evidence from Seattle done last June Seattle as you may know has passed legislation which would increase minimum wage $215 an hour and what they found was that this study significant it looks at all sectors of the economy it didn't just look at restaurant workers as most other studies have looked at this looked at wages across the board and what they found was that at $13 an hour it's having a huge impact on low wage workers due to fewer hours being offered those employees their studies show the result because of raising the minimum wage above $13 an hour there was a loss of roughly $125 per month due to working fewer hours I've seen some studies that indicate that the lost hour could lead to actually wages loss of approximately $171 a month it does have an impact it's that we need to create a workplace that is sure the productivity is commensurate to the increases in minimum wage and what that means is focusing in on education and training education and training are the keys to raising wages at all levels moving students who may not be college bound to technical and apprenticeship training is vital to strengthening community college in Vermont technical college will present better opportunities for looking for higher paying careers improving access to vocational technical education at the secondary level is critical and it requires untangling a complex network of funding and administrations become a barrier to providing what students and employers need there are good paying jobs going for the asking in Vermont today employers I've spoken with said they're having a hard time filling those jobs because the applicants are not making necessary job requirements for the training issue there needs to be training increase the minimum wage to $15 is a lot to go but does not really solve the problem training and better education will go a long way to helping to do that studies have been presented to the assembly indicate that raising the minimum wage to $15 can result in significant job loss across the state of Vermont we don't think the public college should encourage loss of jobs in Vermont public policy should encourage job creation so without closing my comments we'd be happy to take any questions I appreciate your point of view and the idea that I asked a question earlier from the Vermont chamber and I'll ask you how do we define what a good job is if you're a worker, if you're an employee and if you're a business person and I totally buy into the idea of education we brought companies into the state and I think of Bennington as a recent example where their aerospace industry jobs or high tech manufacturing jobs and when they've left leaving behind skilled workers in that trade they've also said we're not leaving because it's too expensive we're leaving for other reasons and we don't know exactly what they are so we educated people and then boom jobs are gone and I'm just curious to know what is the interplay between in your opinion between what that good job is for someone who's gotten educated and is making more far more than the minimum wage it makes a good job as opposed to what an employer needs are both economically and in order to attract skilled workers that is a good question and it's a difficult a good job to some may not be a good job to others and I always told people they're not happy to job leave to them that's not a good job but it may not be a good job but it may not be a good job that's a good fit for them it's not a good answer either it may be productive that contributes to the organization that they're working for that allows them to contribute to their family to bring up family to provide for housing and all of those good things that one wants to do there's different ways of setting what those wage rates ought to be and the wage rates we believe should be set by the market that if I'm in a tight job market and I need somebody who's going to mop floors at $15 an hour I don't think that's an appropriate pay level for mopping floors so it all depends on what the level of the job is what the training requirements are and what the return to the organization is our organization we're a small business right now we're down to three we're looking to hire a fourth person nobody's earning minimum wage we provide some benefits to those employees I can't find I'm looking to fill a sales slot and I can't find anybody to find that slot and we're offering some fairly good wages for that along with the benefits so I think it's a good job evidently other people don't think it's such a hot thing to be looking for so it's all in what the employee perceives it to be what a good job is some people are very happy at $13 an hour job we're able to succeed but what they want others are not other people are not happy at $50 an hour job I've got our sister who's an attorney she makes significant money on an hourly basis she's not really happy she's a sole practitioner she's a one-man paper hanger so is she really happy at work I don't know that I suspect she enjoys the law but I suspect she doesn't enjoy the office what it entails the employer is deciding what the market is for someone who's mopping the floor do they include what the market is to live including what rent is what food is what other expenses might be and then say well this guy needs to mop the floor and he needs $15 an hour to pay for all those are those calculations that you bring in as well because one of the things that happens is when you take somebody on your onboarding the question why don't you train them and you're really not going to recapture that for more than a year so you want people that are going to be long-term employees and in order to have long-term employees you want to make sure that compensation is fair it's just and it's something that they can continue on so yeah those factors are considered very serious and also what are other jobs that are similar vain thank you good morning I once fostered Columbia Forest Products in Newport just a little history of the company Columbia Forest Products has been a the mill itself has been a fixture in Newport since 1945 in 1966 it became under various ownership since 1966 at Columbia Forest Products during the 1980s it became a private company at that point the owners decided to sell the company to the employees so since the 1980s Columbia Forest Products is a 100% employee owned company the company itself has two divisions a veneer division and a plywood division the Newport facility is part of the veneer division which consists of four plants the one in Newport we have one in Maine, Wisconsin and the province of Ontario the division headquarters for the veneer division is also the facility itself the mill is about 160 people currently looking now to hire another 10 or 12 folks and the division office of which I am a part employees of another 16 people best sales accounting other administrative people that constitute that office myself you may be wondering why an engineer is coming to talk about concerns about this particular bill I've been with the company 22 years 16 years of that was manager of the Newport Mill facility engineering capacity so I do have some responsibility for the other three non Vermont mills in my role in the division the plant currently has an average hourly wage of about $16 an hour our loading is 75% so in order for us to pay that average wage of $16 an hour it costs the company about $28 an hour the wages range from about the lowest wage we have up to $30 depending on the nature of the job experience so what we found is that in order to attract and retain employees we have to pay a premium over the local prevailing wages particularly for the entry level workers if the minimum wage is $10.50 which it is now our lowest wage is $13.50 that might suggest a premium of about $3 an hour that premium exists because the manufacturing environment the shift work we do the rather rigid schedules that we have is not for everybody so for us to compete with other job which some people might perceive as easier work more flexible schedule we have to pay more to attract those folks so while the minimum wage may not affect us directly I think it does and will have a significant indirect impact on the mill it will have a ripple effect if the low wage is forced to go up to attract those folks that now can make more than $10.50 up to $15 an hour then we are going to have to raise our lower wages again to establish that premium to attract the folks and even the pay structure within the mill we have several different levels between $13.50 and $30 that is all going to go up as well as an example if hourly rates increase I would say $3 per hour last year that would have cut the mill's profits in half at $3 an hour so you may say well so your profits are less than half of what they were what the company does with this profits really boil down to two things the best their equipment updated things better working conditions but the other part of profits use is to buy back shares that the employees have been granted over their years that's how the ownership works the company has to have money to buy their shares back so when they leave and we hope they leave because of retirement not for some other reason they just want to pay basically their retirement nest that they have developed over their years of employment so if those profits are impacted which they would be if they were forced to pay higher labor wages that means less money to invest in the Newport facility that means that any potential growth instead of going to the Newport facility might go to the Maine mill, might go to the Wisconsin mill may go to the Ontario mill that has lower production costs and higher profitability and it also means if bad times come, which I'm sure they will again we were significantly impacted by the recession of 2008-2009 that means the highest cost mill which could be Newport it's going to be the first to be reduced that's going to be the impact of any downturn in the economy if we don't have any customers in Vermont it does not have any competitors in Vermont so we're not in the same boat as some of the testimony you heard earlier well everyone else's prices are going to go up too so we're not going to be in any different situation relative to our competitors for us that's completely different our competitors are in different states, different countries, our biggest competitor is actually a Canadian facility commonwealth pilot, you only have one facility in the US and that's white on New York so I guess my message is if you have an interest in seeing the Newport facility to continue to be a viable part of the economy in Newport and Orleans County you'll allow the minimum wage to increase with the consumer price index as is the current law and not accelerated anymore thank you for being here can you tell me what the employee retention is at Columbia what is the turnover going? overall the turnover is probably around 10 to 15% but it's very very very low on the senior employees because they have a vested interest they have a lot of retirement money built up so for the more senior employees it really is retirement most of the turnover that generates that average of 10 to 15% for employees that come and go they work for 6 months they work for a couple of years and then it amounts to a pretty great retirement plan thank you for coming and you made an interesting point that I don't think we have heard that Columbia Forest Products is tied to other economies outside of our state so basically what you're saying is if we increase the minimum wage the competitiveness decreases in the state of Vermont? yes right now the four meals is only one that operates a full three shifts that's a Wisconsin plan Newport is at two and a half shifts our third shift is sort of a skeleton group the main facility is a two shifts and the Ontario facility so the company has options to expand elsewhere where it might be more profitable to do so sorry just to follow up I just want to make clear so it's the labor costs themselves so if I just want to get that in context with labor costs is that what you're saying is that if our labor costs go up Vermont becomes less profitable obviously than it is now I know but it's also less profitable is labor costs in comparison to the other facilities is that what we're talking about the labor costs would be cheaper in Wisconsin relatively speaking if our labor costs are escalating at a faster rate than our sister mills okay that's what I was trying to do so it is because labor costs labor is about one third of our total cost thank you Dan Barlow I'm committing for the record Dan Barlow policy manager and we are here today in support of S40 and our support does not come with caveats or carbons for 28 years BBSR has been talking about what a good job means in Vermont and that has been an evolving position at times broadly speaking for us a good job is a job that pays a living wage that a person can bring home a salary that allows them to live without public benefits allows them to cover their household expenses and save for a future additionally we think the benefits surrounding a job are also incredibly important employer-sponsored health insurance is a big part of that that's a big cost for businesses a flexible work schedule paid time off whether it's paid sick days or paid family leave these are all what we see as essential elements for a good job and you know different circumstances for different individuals maybe they would rather have a flexible work schedule rather than some extra time off so allowing the employer to make those decisions around the edges to make a job work for an individual but I think it's really important to talk about what is a good job because often we find that there are jobs out there that are highlighted as good jobs that really when you dig beneath the surface you find that they are not really actually working for the monitors so VBSR has been looking at this issue around the minimum wage for about the last year and having some pretty serious conversations internally with my public policy committee and my board of directors about how to address income inequality and also but within the scope of the benefits that employers are already paying for and how to do that on a timeline that's going to work broadly for a large part of the economy and I'll be frank I have a few board members who would tell me that our position is actually a little wimpy that they want $15 an hour in 2020 that we think we should move very quickly to a livable wage I have other employers who I sat down with them and we looked at what they pay right now what their scale might be in the next few years and they quickly realized that they would already be at $15 an hour over the next few years and quickly became very comfortable with the timeline that the senate had put forward so we do think a six year timeline broadly speaking works for most employers out there in our economy and we think that's the direction that the legislature should take and I do want to note that again I have some members who want this committee to move faster and farther than that so within VBSR and we have 700 businesses across the state there's some diversity and opinion of how quickly we need there there wasn't a lot of diversity and opinion about whether or not we actually make this move I know prior witnesses have talked about the economic impact on verminers of raising the minimum wage they've talked about the profile of who is making a minimum wage and breadwinners for families and that's why it's important to address income inequality there but we also think it's important to talk about the intersection between our failing healthcare system and the suppression of wages over the years and from VBSR's perspective this really suppresses wages and affects decisions on both the employer and the employee side the person I'd like to talk about is Don Mayer the owner of Small Don Electronics, I think a lot of folks probably know him he was at Oberman Public Radio, Oberm-Watesfield, South Burlington he believes strongly that his employees should make a living wage and over the years he's been slowly increasing with his starting wage and by 2020 his lowest paid employee will be making $15 an hour and that was really important to him and I was talking to him this week and he's already seen the impact in certain sectors of his business where maybe he had problems retaining an employee and as soon as he starts increasing those wages that retention problem goes away, the employees stay longer, they're more productive he doesn't have to waste time and effort and money hiring a new person and training them up for that position so he's personally seen the benefits there Don Mayer pays for his employees health insurance and when he started business 25 years ago he could pay for an employee's health care and their family's health care for $1,500 a year and that cost is now $15,000 a year and that's about $7.25 a minimum wage for him so he's struggling with this but also believes so strongly that his employees need health care benefits, they need a good wage that they can live on so he's making efforts within his organization to move forward on that so I said no caveats, no carbouts, we support this bill 100% but I would also urge the legislature to return to the issue of universal health care our fracturing employment system, our employer sponsored health care system is holding back our economy and businesses are making tough decisions about how they pay for increasing premiums and that's money that could go to salary increases too and meanwhile on the employee side a lot of their actual wage increases that they have seen are just gobbled up by their own increased health care costs and let me just scroll back to one of my previous documents as I found a really interesting study and this is national language but it found that out of pocket health care costs for Americans if they had kept pace between 99 and 2009 pretty much erased all those gains in salary increases that they saw and so if health care costs had maintained in pace with the economy during those years the average American family would have more than $500 more in income, household income but we've seen just all the benefits just eaten up by our health care system so I wanted to kind of explain what was in the room in the mix during these conversations at no point was were we ever going to oppose a minimum wage increase like this and in fact the approach the senate took with a six year timeline made it a lot easier for some of our members who wanted to work up to 15 but weren't quite sure how they could do that over the next few years often I don't have to tell this committee but often when having these conversations people think it's $15 in 2019 like that's the conversation that this committee is looking at and you have to sit down and explain to them that it's a longer timeline and once employers actually look at their how they would be increasing their own wages over the next few years that they were going to be broadly in pace with that but the most part there were a few things, first with the health care which isn't really germane to this I think we all agree that it's broken and it's too expensive another thing just I guess for clarification Don Meyer stuff, I know Don, I look right there, he's looking to move small Don out of, I mean he's got to present so that he can allow operations into Southrop so if we're going to go the 8 or 5 and let's just keep that Secondly I guess there would be third and my question my first question is what of your members the quantity I'm sorry, what's the average quantity of employees how many employees our members represent, I don't have that data on hand again about 700 business members we have some of the largest corporations in the state and we also have folks who are making value ended food products out of their kitchen and they have employees so I think our membership broadly reflects the small business of Vermont for the most part, you know it's less than 10 employees often and with all due respect representative I have to push back against your statement that health care does not impact this issue because it surely does and I also don't appreciate you casting aspirations on women members who's not here to defend themselves, the first-sales science of business is public knowledge, okay, but Don is invested in Vermont yeah I know, he's a great business owner, I'm just saying he's near retirement age also I'm not so sure if this reflects a lot of the small rural businesses that are trading you represent less than half of 1% of the businesses in Vermont many of which are very small, 1, 2, 3 people and it should be noted that I mean I know you guys are all about the social responsibility especially as it's from the public platform and that's what you guys are all about what social responsibility is to small businesses is supporting your local arts, your local sports teams, your local high school these are what are going to go away when your labor costs go up to a point where you don't have any income and I think that needs to be said you know none of my members who I've talked to have told me that they were going to stop giving to the Little League team if they had to raise their ventilation, I haven't heard that from the business community and that's what I'm saying, I think with you representing such a small amount of Vermont businesses I'm not so sure a large percentage of the smaller rural businesses and I know you have some of those, we have a lot of those do we have other questions from the business? so when you were talking about how most of the committees in the business were talking about how once they learned what $15 an hour meant it didn't seem to freak them out because of course it's $31,000 a year for a 40 hour job or if it's 1.3 whatever that's $13,000, $38,000 someone else's numbers, how do businesses start leading the way on this? I was doing some reading on Walmart who is now paying $11 an hour and target a big competitor announced they're going to get to $15 by 2020 is that an attitude that fits with any of your businesses that fed you this information in your discussions that do they need us to say it has to be $15 an hour or can they do it themselves? Some are doing themselves and I want to reflect on the first witness that this committee heard from today from 3 Penny Taperum who said this is something they want to do but by raising the floor together as an economy this makes it easier for them to do that to get over to a starting wage of $15 an hour over the next few years so we have a number of employers who are moving to 15 regardless of what the legislature does and then we have another series of employers who want to get there and they recognize that raising the floor and the whole economy will allow them to get there Representative Smith I think that's great that businesses do want to pay someone $15 an hour they're prerogative as well In what business or social responsibility do you get up into the northeast kingdom and I'll be involved in businesses in the northeast kingdom? We do have members up in the northeast kingdom and I can on the website we actually list, we're very transparent, we list every single member on our website and you can go there and divide by county and sector as well so I'd be happy to sit down and go through a list of some of our northeast kingdom members and most of our membership being Chittenden, Washington and Wyndham County as well, Windsor results, we have a number of members in Rutland and Bennington, we've seen a growing membership there as well and we're actually looking at opportunities to have more networking get-togethers up in the northeast kingdom so we recognize when we come to these parts of the state and have an evening networking get-together bring entrepreneurs and business leaders together that generates a lot of excitement for community members of the economy up there. Have you had the opportunity to get their responses of the minimum wage up there versus Chittenden County? The feedback I've gotten on the minimum wage has been for all our members across the state. So again I'll go through, I can go through and see if there are any particular members you know I think you're probably looking for many folks in your district. On our website we have all our members right there so it'll be clear who you might have in your district. And if there are no other questions just in closing again we think the Senate bill, the approach of an increase over six years, that's an appropriate timeline that works for broadly the whole economy businesses of all different sizes and situations. This is a fair way to move the economy forward and raise the floor in wages. Thank you. Thank you all. This morning for your testimony adjourned the committee will meet after the floor as quickly as possible upstairs. Not here. Not here. Luxury times over. Yeah. Thank you all.