 And just before we start, Joyce, I just, no, hold up on that. I would know, I wanna focus on you being here because this is a frustrating week for all of us who are trying to get ahead of something like minimum wage when we're still on the floor and have many miles to go before we're done. So I appreciate you coming in and giving us kind of a quick primer on S23. And I'm sure we'll have you back and when this information has context, have more questions on it. But I did want us to, want the committee to start thinking about this bill, even though we're on the floor thinking about a bunch of different other things, so. Welcome. Thank you. Good morning, everyone. Good morning. Good morning. I'm Joyce Van Tester from the Joint Physical Office and it's a pleasure to talk about the Minimum Wage Bill, S23. So I'm going to talk about some notes and these notes are in preparation for the fiscal note that should be forthcoming. And I welcome your questions because I know that there are lots of sometimes confusing ideas and numbers and so forth. So please feel free to ask any questions as we go along. So I'm going to start with the current minimum wage in Vermont, which is $10.78. Now that's a funny number. 78 is simply 10.50 last year indexed to inflation, okay? So according to the current law, Vermont's minimum wage starts at 10.50 and then is indexed to inflation every year. So according to the most recent consensus, economic consensus regarding inflation for coming years, you can see I've given you a little chart over on the right that shows you what we expect for inflation. So in 2018, it was 2.4 percent. In 2019, the consensus as of early January was expecting 2.5 percent. That may turn out to be a little bit high, but we'll see. And then it settles down around 2.2, 2.3 percent in coming years. Now, if there's a recession at some future date, those numbers could change, of course. So this is sort of the study as she goes if you're looking forward. So get the inflation idea in your head. It means that every year, a dollar is worth a little bit less, right? And if inflation is 2.4 percent, that means that a dollar today is worth about, what, 97.6 cents, right? So it's a little bit less. And if you wanna think about alofa bread, alofa bread might cost, what, let's say $5, okay? But if inflation continues, that price of alofa bread is going up every year because each dollar that you pay is worth a little bit less, okay? So at a 2% inflation rate, alofa bread that costs $5 this year will cost $5 and what? 10 cents? Yes, $5 and 10 cents next year, okay? So that's 2% inflation. Now, it gets to be confusing because the modeling by Tom Pevett and McRockler for the minimum wage bill is done in 2017 dollars, okay? So you have to go back two years. And for your information here, I've converted all those numbers to 2019, today's dollars, okay? But I know that yesterday Debra Wright was talking about 2018 dollars because she's done her work in 2018 dollars with the most recent data. So that gets to be confusing. In the numbers that I showed you today, I will be talking about 2019 dollars, today's dollars. But sometimes I have to think ahead. So for example, we're thinking about reaching $15 for the minimum wage in 2024, okay? So that's about five years into the future. So how do we know how many people will be affected by $15 an hour in 2024 in the distance, right? That's $15 an hour in future dollars which are gonna be worth less, okay? So if that $15 applied today, we have to subtract out all the inflation and we get down to $13.43 or something like this, okay? Then we can look at how many people are paid $13.43 and below today to know how many people, how many workers might be affected in 2024 by $15 an hour. Okay, so time out, John, can you scroll up so we can see that chart just above? Yeah, that's good. So to be clear though, when you're adjusting these numbers, as you said, we're using as still as the base. We had a big minimum wage study, pretty solid foundation in terms of what we were looking at, benefits, cliffs, other elements that now you're able to just plug in. I mean, you're using the same foundational work. Absolutely. So when we take more testimony on that foundational work, we're going to just sort of cross our eyes a little bit and not look at the numbers and then plug these numbers in. But the rest of the information in that report is still considered credible and up to date. For the most part, yes. I'm gonna give you a little bit of an update on the literature, which will, I hope, get you thinking about implications of recent minimum wage. But for the most part, yeah. I mean, you can look at the figures that were in the previous reports and look at the trends over time, the shape of the curve and all that. All that is still absolutely relevant. And so Jen, and again, just to be, just to kind of point out the complexity of what you just were talking about. So based on the current law, 1204 and 2024, is that by that chart? Yes. As the normal inflationary increase, that 1204 is in real purchasing power is the same as 1050 was last year. Yes. So in essence, a raise to $15 is a $3 raise from what would be expected at in 2024, not a four and a half dollar raise or whatever that might be portrayed as. And then that $15 becomes a benchmark of $15 in 2024. Correct. Where is this 13, and so the 1343. Okay, can I ask that we just hold off on that? Yes. Would you want to talk a little bit more about what we call current dollars and current means in each year, right? Current in 2024 is $15 an hour. Current today is, whatever it is, 1078, right? Whatever the year is, sometimes that's a confusing term. My current dollars, they're also called nominal dollars. So those are the dollars that apply in the year you're talking about. All right, so we've just talked about the fact that the difference in 2024 would be about $3, $2.96. Difference for current law. If we stick with current minimum wage law, that minimum wage would be $1,204, which is still almost a dollar higher. So that's just taking care of the inflation effect. And then I've shown you a little picture just to show you the minimum wage current law and as proposed, a nominal dollar. So you can see the blue line is the current law. And it's ramping up slowly, very slowly, right? The red line is S23, the proposed rise to $15 an hour in 2024. And you can see how that's rising a bit faster. That's just to give you perspective on current dollars, current law versus S20. Okay, now let's go to the next chart which shows you the proposed minimum wage path adjusting for inflation. Right, so again, the reason why I like to think about it adjusted for inflation is that I can impose a different world on today's workers, right? By using today's dollars, inflation-adjusted dollars. And this is exactly what they've done in the modeling effort to try to figure out how many people would be affected by the increased $15 an hour given today's workforce. Okay, all right. So you can see, I've given you more history here, but you can see current law. Let's start with current law. So 1078 in 2019. And again, you can see if we go back in time, we get down to 915 in 2015. That's in nominal dollars. If you go to $15 in 2024, we're starting, we get 1078 and getting to the $15, okay? Now I'm gonna move to the right-hand side of that table and look at inflation-adjusted dollars. So this is as if a dollar today is adjusted for inflation to get the value in future years, okay? So I've shown you exactly how the current minimum wage path works, and that is it sticks with the current basis of 1078 going forward, okay? If I were showing you this in 2018 dollars, I'd be stuck at 1050, right? So now I'm stuck at 1078 using 2019 dollars. There we are under the $15 in 2024, the far right column. And you can see that the increases that get up to $15 in 2024 get up to $13.43. So that's what I was previously talking about, okay? Are there any questions about that? It might help also to look at that little chart at the bottom, so here the blue line is current law and that's flat, that's stuck right at 1078, okay? No change in that purchasing power. But if you look at current law, that is increasing to the $13.43 in today's dollars in 2019 dollars. At what point in the current law is the magic number of 15 tamed at one year? So I once knew that answer, but I cannot tell you the answer off the top of my head. That means something that is probably around like 2007, 20 days after it jumps. What's the question I'm starting? What does it get to $15 in the current law on the inclusion rate, doesn't it? Oh, it was 2032 or something like that. Yeah, the inflation rates have changed and they've probably come down, so it's probably even further out than that. Yeah, really, it's here, it's like this. So you're looking at the S23 red line? No, I'm looking at the columns. So you want to be in the far left hand, you want to go on to your number on the far left corner, 24. So it would take, so you said 32, take an additional leap, you're seeing about three months. Probably. Well, let's see if it's gone. Yeah, it's gone to $1.50 in six years. Okay. Yeah, and I mean, obviously it goes up a little bit more each year than the index. No, that's right, I was wondering, would like for the end of, I think last year when we were talking about this, it was, it had come in at like 2032, 2033, so having on inflation, but yeah, that's... Yeah, it's an easy calculation, so I can get back to you. No, I mean, the ballpark's fine. Oh. And at 15, of course, would be the equivalent of... Well, yeah, you were going to say in the 50s. Yeah, no, no, no, I was just trying to do the math and for the end on the line, it was like, yeah, yeah, when do you hit that target? Yeah, yeah. Where was I'm trying? So ultimately $15 and by 2024 is worth 1343, that's what this is going to be. Yes. Okay. Yes. It's really different. Thank you. Okay, so if we've taken care of all those questions on numbers. Yes. Just one more. I don't know if you can make this, answer this briefly, but how are these projections, inflation projections come about? Right, so there is a consensus economic forecast completed each year, actually twice a year by Tom Cabetta and Nick Ronker together with Jeff Carr, who represents the administration side of things. So it's a legislative administration joint forecast. Yeah, okay. That's presented to the legislature in early January each year. So that's the source of our... Okay, thank you. Good. I think it's a more fundamental question. Why is the strategy to having the first couple of years less of an increase and then it escalates? If I look on your previous page, 48.915, why not just take the five years and per rate? So you would have to ask Senator Sorotkin who's the sponsor of this bill. Okay. We have had various paths over the years. This is my third year doing minimum wage, I think, plus the summer study before that. So the fourth go round, I've been on wage. We have had a number of paths. I would say that... Are you reading that correctly? Yes, you are, absolutely. So there is a thought that this is going to be an adjustment for employers, and it might be better to start off a little bit more slowly in ramping up the increase. There's also the idea that what you're looking at in difference from current lives in nominal dollars, so as you adjust your inflation, that real change will be a little bit smaller going out farther. So that will shrink the difference over time. It's also true that the numbers under the $15 path are round numbers, right? So 12, 25, 13, 10, 14, 0, 5, 15. At one point we had even Steven increases and they were funny numbers, you know, 87 cents. 04 cents and whatever. So it was, that was another consideration. Okay, thank you. Good. Now we can leave numbers behind for a little bit. I'm going to break the sign of relief, although numbers are the best part of my work. Okay, so we can think about what do minimum wage workers look like and what do the jobs that pay minimum wage look like. And there was quite a lengthy description of all of this in the summer study that was done a few years back. I'm going to give you some highlights that have been updated with more recent data. And if you're interested, that summer study is available on the web and I can provide that if you like. If you could forward that to Ron so that we can include that in our Yes, the link is on the JFO webpage and I will send that to you. Great. Thank you. If you go to the JFO website, you can search under subjects and it's under economy and then labor or something like that. Kind of trouble. Okay, so what are the characteristics of minimum wage jobs and workers? Okay, so for some of this analysis, I'm going to focus on jobs that pay right around the minimum wage. So within 90% of the minimum wage. For most of it, I'm going to focus on any job that pays the minimum wage or below. And there are some training programs for high school students, for example, that are allowed to pay significantly under the minimum wage for a set amount of time. Okay, so when you think about all the jobs that could be affected by a change in the minimum wage, we're including all those jobs. Okay, because presumably it's a proportion of the minimum wage that's paid to these high school students in training or whatever. Okay, so again, what we're using is the $1343 and $2019. To look at the jobs out there in the economy that are paying minimum wage or less. So there are about 66,440 Vermont jobs that pay below the proposed minimum wage or about 21,28%, almost 22% of all Vermont jobs. Okay, that's a lot of jobs. But remember, we're talking jobs, not people. Hold on a second. No, no, no, I'm just saying, I just said, no, we're just closing my mind. I had no idea that there was that many, many part-time jobs, part-time jobs, internships, trainees, you know, long life. Do you think we're allowed to do that anymore? It depends, it depends on the job. If you're a work study, you don't have to repay minimum wage. I believe there are many, many rules. Yeah. That brings up another question about like grad students on stipends. Same thing. Same thing. Yeah, I feel like they're hourly wages. Don't worry though. By that UVM or anybody who has student work study jobs, I mean, they can pay obviously more than the minimum wage, but they have to pay the federal minimum wage at that most level. So federal minimum wage is $7.25. Right. And so the federal training wage, which you mentioned is four and a quarter federal tip wages. We know which one doesn't apply in Vermont is 213. Our tip wage is five, well, half and whatever. What it would stand out at that first bullet point is that the $13.43, so $15 an hour in 2024 is the equivalent of $13.43 today, which is roughly the livable, the Vermont livable wage as that algorithm is determined by JFO. So a basic needs budget. So we are $15 an hour would get us merely, I guess merely is not a right word, but it would get us to what today would be our livable wage, which we use for our calculations for paid family leave bill, et cetera, so. Yes, exactly right. Okay, now among minimum wage workers at 90% of today's minimum wage, so 90% of 1078, up to the new minimum wage. So these are people who are really working jobs that are not internships, not training programs, not graduate students, nothing. So these are people at minimum wage jobs. Among those folks, average hours work per week, about 35. Okay, so on average, these people are working full weeks. Average weeks worked per year is 44, so not quite 52 or 50, if you think about, annual leave and so forth, or just vacation time off. But 44 weeks per year, so it's an existential work year. Their average wage per hour is $11.51, okay? So this is above the current minimum wage, but it means that there are lots of people in that band right up to 1343. And the average annual income from the minimum wage job is $20,000, 282. So this was in the 20th, this was in last year's. So this is an update from last year's. This is using a new American Community Survey. For Vermont specifically. For Vermont specifically. So this is important because we as a state in statute say a full-time job under the circumstance, under minimum wage circumstances, it's 40 hours a week. Yes, yes. So when I just likely throw off that minimum $15 an hour is the equivalent of 32,000, 31,8, I need to adjust that. So this is average, so remember it probably includes what, summertime work at the minimum wage for not head of hustle, we're actually gonna talk about this, how many are head of hustles. But there are many people who work minimum wage jobs who are not supporting a family, right? The people, okay, so if you go to the next bullet. 41% of the workers in the minimum wage workforce are the head of a family. So either a single parent or a company, okay? So 41%, so we're at two-fifths of the people. And of those, it turns out also 41% provide over half of the family income. So two-fifths of two-fifths is what? Four, 25th, which is about 16%, right? Okay, so 16% of minimum wage workers provide over half of the family income. So we're talking about a much smaller piece of those minimum wage workers. Could you read that statistic please? So I'm saying 16% of minimum wage workers are the head of the household and provide over half of the family income. All right, I'm getting a little 16% of the income. My experience in horse farming some things is people come in and look out the stalls for cash. And so I think that that's a pretty extensive number across the state. When you factor all this in, how do you factor in those people getting paid, whatever it would be, $10 an hour or whatever it is? Yes, so these statistics come from the American Community Survey, which is a nationwide survey conducted by the Census Bureau, the US Census Bureau. So it includes a sample of remodels, which is probably three or 5% small numbers. These statistics are actually averaged over five years because remodels is such a small state that if you looked at just one year's results, they would fluctuate a lot over time. But it's a good survey. I've actually taken a survey and probably some of you have as well. They try to get at cash payment as well as salary and so forth. Now it depends on how people report, right? If they're being honest and they report cash wages, then you'll see it. And if they don't report it, you won't see it. So yes, there is an undergrad economy and everybody knows that it exists. We hope that that's included here. So, this 41 and 41 thing is running into a wall here. So 41% of the workers in the minimum wage workforce are the head of a family. But only 41 of those provide over half of the family income. Can you describe that family? Can you describe that circumstance to me? That only so 16% of the people provide over half, but they're still the head of the family. Can you, how does that work? Sure. So think of all the people out there who are earning minimum wage. Which is 21.8% of the population. Of all the jobs, to the jobs. To the jobs. Jobs. And remember that people who work low-wage jobs tend to have more than one job. So that's, so the population's gonna, is there to be less than the 21.8%? Absolutely. Because there were people maybe like a 60%? Yeah. So, okay. Yes, so all the people out there are working minimum wage jobs. Now, some of them are high school kids. Summertime work. Some of them are college kids. Summertime work. Some of them are filling in before they start a real job, working a minimum wage job. There are lots of people in many different circumstances who are working minimum wage jobs. But what we often think about in the policy world, in terms of is the minimum wage sufficient, is if, no, scratch the F. For the people who are working a minimum wage job full-time or close to full-time to support themselves and their families, are they making enough to provide their basic needs? Okay, that's often the question. And among the people who are working within 90% of today's minimum wage up to $13.43, about two-fifths of those are the head of household. Okay, so these are people who need their income. Obviously, they need every penny of their income. And among those, some have spouses who are working other jobs that may be paying more, or they have rental income, or they have other income, right, that is supporting their household. But all of the heads of households who are earning minimum wage, two-fifths of those are providing over half of the family income. So anybody else who's working in the family is making, is just simply saying less than them. But they can be a head of household and not be making more money, not making the most money in the family. Absolutely true. The head of household, unfortunately, is still defined as the husband, if there's a husband in the family. Defined by whom? Staff's Bureau. Well, that's an important point because don't we have another factory coming up about or pull a point at saying that X number of percentage workers are women and many of these families are single-parent families, right, where the single-parent is the woman and would be the head of household, right? So, yeah. The head of household is the male. Generally speaking, it's the male. Well, by definition. That's the way they do things, unfortunately. We won't ask the one. I think you'd have to go back 50 years, right? Yeah, it's very possible. Okay, all right. Yes. Now, this is an important update. Thank you for, I mean, I'm still... So, these are Deb Brighton numbers and if there are more detailed questions, I would funnel them through Deb or she could talk to you about all this. She's done some really nice work and all of this feeds into the modeling done by a talk event in the Rockler that we'll look at later for the Vermont economy. Yeah, representative Zons. So, yeah, so I'm wrapping my head around this definition as well. Like, what makes this a meaningful statistic if, in other words, it would seem to me the meaningful statistic would be what percentage were primary earners in their household? If head of household is basically just a gender marker, that stat doesn't seem to be particularly meaningful. I'm gonna check. I'm gonna check to be sure I'm not talking up my half of that expression, no. But whatever the expression is. I will check. Because when you said that someone else in the household might need more money than them, then that's why I'm confused about how they head of household. I'm just thinking primary. If I'm the head of my household, my wife would be surprised. No. No. First of all, but also from an income perspective, she's clearly always bent that primary wage earner. So, you know, that's... Again, this is where word matter and we're trying to sort this out. But I would have deferred primary wage earner as that, but it is, anyway, this is just stuff that we need to know, we'll be forward so we don't, Matt and then Tommy. I stand corrected. If the house is owned or rented jointly by a married couple, the householder maybe, either the husband or the wife. Beginning, oh, I'm way out of date. Beginning with the 1980 CPS, which is the current population survey. The Bureau of the Census discontinued the use of the terms head of household. Ooh, so I'm completely out of it. And head of family, oh, wow, this is crazy. Okay. So the minimum wage should be $32 now. I don't know. I don't know. I don't know. I don't know. Really cool. I'm just gonna eat you nuts for a fresh choice down. I don't know what you want me to eat here. It's all scalable. Oh, no. Oh dear. So that's not the worst, so it says. Dude, you just need to hold this. Okay. Okay. Well, that's that. This is good. This is good. Does this have anything to do with red, guys, these are, these are, these are, these are, these are, these are, these are. Oh, gosh. Oh, dear. Just with PTSD. Okay. So I should not be using head of household. I would have def knows this. So they don't use head of household anymore. They use householder. Householder. Okay. That's my name. And the householder refers to the person or one of the people in whose name the housing unit is owned or rented, or if there is no such person, any adult member excluding rumors, orders, or paying employees. So how do they, oh, if the house is owned or rented jointly by a married couple, the householder may be either the husband or the wife. The person designated as the householder is the referenced person, to whom the relationship of all other household members, if any, is recorded. So that means we don't know. Oh, yeah. Right? We don't know if they're the person we're talking for the statistical measure. Is that basically what it means? Yeah. That's whatever answers the question. Yeah. That's bad. So how does this relate to your 41% or 51%? Yeah. Yeah. Right. So that means, so I wonder if Deb defined it differently, because she's using the head of a family as a single parent of a couple. OK. So I'll have to have a conversation with you. Is that an IRS head of household? Or is that, oh, that's a survey, right? It's a census. Yeah. OK. So that's really interesting, and I have no idea. Try to remember, Tom, I think the last time we had this discussion, somebody did get the numbers of how many of these are single women. Yes, that information was in an infographic that was shared. I think it's either, and it may not be in the 189-page report, but it might be in some of the reports that came from the Boston Fed. Yeah. I don't remember what it was, but it was a significant amount. So I need to say, be careful about that Boston Fed study. It should never have been published. It was based on one year of the American Community Survey looking at specific states, all the states in New England, and you should never, ever, ever believe the American Community Survey for one year for Vermont, because it's such a small state. We received training from the Census Bureau on this, and they said, this is really bad. So I would put very wide margins around any of the results from that Boston Fed study, yeah. Representative Gommage. So I would think maybe on your tax return form, while I haven't looked at it this year, there are boxes that you check off in terms of, I'll use the term head of household. They don't use that term, but it's something similar. It's similar. I don't recall exactly, but it establishes who you are in the household, if you are the only Inherner, you know. So perhaps that is what that's not what's used. No, because the IRS has its forms that are not connected in any way to the forms filled out in that census. So that would not serve as a guide, perhaps, a good guide. Well, what this says, what the Census Bureau says is that it depends on who answers the survey, who fills out the survey. They are considered the head of household. I'm sorry, the householder. It doesn't make much sense. So what I don't know is what definition Deb used, because she had access to the raw data. So I'm going to try to phrase this question so I'm not going to, because it is a policy question. In, with Joint Fiscal Office, you deal with these kinds of reports all the time, and some of them are turned into infographics that you're just saying that this particular piece of information that was put together is that the information isn't necessarily wrong. It's just, I mean, I can go find those numbers but what you're saying, your experience or the way that when you see this particular study, you say, oh, Vermont, we need to average five in order to get a credible number. So as we move forward, we are going to see a lot of these different infographics, and we're going to see a lot of different things that have studies behind them or different groups behind them, which ones is not necessarily, I'm trying to ask, which ones do we give weight to, but which ones do we find credible at its base level? So for instance, the survey that was released two years ago that was paid, that was sponsored locally by the Commission on Women, the Vermont Commission on Women, which is a state agency, received funds to pay for a study that was done by a national group that blended numbers from across the country to come up with base numbers on the paid family leave policy, this is on the paid family leave policy, and then did some specific, Vermont numbers. How do we treat, going forward, how do we treat any particular study for credibility? Because I think we're going to be baffled by a lot of numbers that are coming at us, and this was an example of, I mean, I just learned more in the last 10 minutes about how to, on one hand, the American Community Survey is good if you read it properly, but it's bad if the numbers are used improperly, and so that's kind of the Mark Twain lies, Dan lies of statistics. So from the JFO perspective, how do you approach all these different things? How do you find that road to go on and say that this is better than this? So if you're a statistician, you look at the margin of error, which is statistically, how, why is the confidence interval around a number? And if it's really wide, you want to be very careful about using a specific number. Plus or minus. We see a political poll that's plus or minus 6%, you're like, okay, so they pull 12 people. As opposed to at 4%, they could pull 500 people. Yes, now unfortunately, most of the time, policymakers don't want to be bothered with the margin of error or the confidence interval, and so what they want is your best guess. And if you give your best guess, that's one number, and it's easier to absorb and think about, but it misses that uncertainty around the number. And so I think I asked this question last year about, again, probably a different subject, but when you had the box with the numbers of the CPI, of the estimated increases in the CPI that go out in five or seven years, can I pull up off the JFO website or ask Tom Kovett or you to say, hey, what did Tom Kovett say 10 years ago when it came to, in this case, something like inflation, which you could actually go back to? Because one of the things that we do here is we say, in five years, it's going to be like, I asked this to the labor people, but in five years, it's going to be this. Well, what did we say five years ago and what does it match up today? So we have to go back and say, five years ago, Tom Kovett said that the inflation was going to be this, this, this, this, this, and this into your confidence factor. We can actually go back and say, these were the actual numbers and at least get an idea that he was dead on or they were dead on and excuse me, that the way that they use their numbers provided, at least in this case, an accurate number. So it's a good question and I can tell you when I worked at the National Budget Office, we spent a lot of time, every five years maybe, going back 10 years before to look at our projections and to try to separate out the effects of policy changes, which of course could not have been predicted at the time that we made the projection from sort of technical changes, the way that the CBI gets measured and all those sorts of things. And then just what happened, right? And there's a big report that comes out in CBO, everything, whatever that says, okay guys, we were off by this much and we can explain so much from policy changes, we can explain so much from technical changes and the rest, we just were wrong. So it can be done, it takes a lot of work, but yeah, I mean a simple thing to do would just be to look at inflation projections from five years ago versus what actually happened. We would see a difference for sure. But again, you're creating that sense of- Uncertainty. Of certainty because of the potential for policy changes, I mean I've always wondered why doesn't the CBI change the measurements of certain things, like even Dow Jones kicks people off the Dow Jones 30, so in this case you're saying policy choices that we made can affect inflation rates or estimates or what have you. Okay, no that's fine, it just, again this is, we're in budget week so we're getting a lot of numbers thrown at us and I think that's where I'm coming from with a lot of these questions. Absolutely. Is that- That's a good question. What do you trust and what can you use as credible information when you're trying to push a policy forward? Right. And if I could take one minute to go off topic just a little bit, Deb right in wanting me to be sure to talk about this. There is a study requested in S23 that would look at different measures of inflation for indexing the minimum wage going forward. And people don't always appreciate what's going on there but the CBI is a fixed basket of goods, right? It's defined to be, you know, a household buys this, that and the other and those things stay pretty much fixed over time except for big changes that are announced and, I don't know, okay, the basket stays fixed but there are other measures that move with people's choices of what is purchased and the personal consumption expenditure deflator, the PCE deflator is now used by many, many organizations, the Federal Reserve Board, the Congressional Budget Office, many, many, you know, economic thinkers are now using the PCE deflator rather than the CPI because it is a better measure of inflation because it moves with people's choices, okay? So, for example, think about phone service. You know, if you're still measuring the cost of a landline, you're not keeping pace with what many households are doing which is dropping the landline and using the self-couple, right? So, the PCE deflator takes that into account over time and probably creates a better measure of inflation. So, there is a study that's due in 2023 or something that would look at sidetrack. Okay. Let's go to number five. Yes, shall we move to new insights from what you're doing? Oh, you don't have much time, okay. Yeah, and again, this is, we'll have you back, I'm sure, once you're closed before the end of the year. Okay, there are some new faces on the committee. So, let me just briefly say that over the past few years, there have been some discussions about what is found in the evidence about raising their own wage, okay? So, the question is, if you raise them at their own wage, do people lose jobs? Who loses a job? Or do people lose hours of work? And who loses hours of work? And what's the bottom line? You know, what's the effect on the economy? So, just very briefly in a nutshell, about two years ago, there was a very good natural experiment, let's say, an experiment that happened in Seattle when they raised their minimum wage rather rapidly from, let's say, it was about 9.50 an hour all the way up to $15 an hour, okay? And so, economists rushed in to see what would happen. And there were two groups, one from Berkeley, UC Berkeley, one from University of Washington, Seattle. And the UC Berkeley folks said, okay, we can do this, we can use data on food service workers. So, waiters, waitresses, cook, chefs, you name it, all those folks in food service. We can look at that bunch of workers, we can see what happens to the number of jobs and to the wages paid, okay? They did their study, they've done many studies like this, they found no effect on jobs, they found some increase in wages, okay? People thought, great, this is good, this is what the economics profession has been doing for years, those are the results. Then along came the upstarts from the University of Washington. They were able to use individual data so they could follow individual people, workers, over time to know how many hours they were working and what their hourly wage was. And Washington is one of four states that collects data at that level, so hours worked and hours worked. They found a drop in the minimum wage workers, the workers who were affected by the hike in the minimum wage, not huge, but there was a drop. They also found a drop in the total wages earned by those low wage workers because of the people who lost the job, right? The people who gained in minimum wage, gained so much, but it was not enough to offset the wages lost of those who lost their jobs. Okay, so unfortunately the paper that was written by these University of Washington upstarts has not gone through peer review yet, has not completed peer review, has not been published. Okay, so it's very easy for people to say, oh, but it hasn't been published, you can't believe it. You know, okay, I don't know. I'm sort of agnostic. I do know that some of the top labor economists are really saying, should we pay more attention to this University of Washington study? Because it seems to be saying that there is some specific effect. And what I'll talk about today is sort of the next step in both of those studies. Okay. Wasn't there also a case where the authors of that study pulled back and said, yeah, okay, yeah, yeah. Okay, so that was two years ago that those papers were published. Now fast forward, recently, like in the last six months, two more papers have come out by the same sets of authors. We'll talk first about the University of Berkeley paper. So they have a slightly different way of looking at this question now. They're looking at the number of new jobs paying at or slightly above the new minimum wage compared to the missing jobs paying below it. They looked at it. I just wanna be sure. Yeah, the NME paper? Yes, absolutely. Thank you. Yes. Sorry. There too, it's the one about that you're talking about. Oh, you want the, yeah, I'm sorry. I'm sorry, thank you. Yes, the top one. All right, thanks. Yes, they're both NME papers, sorry. Okay, so they're looking at many different sites across the country where the minimum wage changed. And they're trying to think about how many new wages came in around the new minimum wage compared to how many jobs were lost around the minimum wage, okay? So they looked at many, many years, 1979 to 2016, thinking about that balance. And they found that the overall number of those low wage jobs around the minimum wage remained about the same five years after the increase in the minimum wage. So this would support the view that, yes, there's churn, right, people are changing jobs, coming, moving in and out of jobs. But about the same number of jobs existed close to the minimum wage as it moved up over time, okay? So, if you, well, okay, so I'll just leave it there. And then the final bullet says, they find some evidence of reduced employment in tradable sectors. So that means if you have something that's made in China and you're raising the minimum wage in that industry, then it's likely that jobs will be lost in that industry in the US because you can import things more cheaply from China. Okay, so that's the tradeable sector. Which could be anything in manufacturing. Exactly. And it's already happening. And we've seen it happening for many, many months. Absolutely. And it's exacerbated by tariffs, which last most years in China at least. Okay. So that's sort of the traditional, what we think about the minimum wage, right? No big loss in jobs, no big loss in wages and so forth. Okay, now we come to the upstarts. And the upstarts have released a new paper as well. And so again, the difference here is that they're able to use data on individual workers and follow them through time. And so they find that, well, okay, so this is what I said before. On net, the minimum wage increase went from $9.47 up to $13 per hour. And it raised earnings by an average of $8 to $12 per week. Now this is a little bit different from their earlier results, okay? Previously they were saying that people lost some dollars per week. Now they're finding that, in fact, if you're careful about your analysis, you find the small gain. Okay, but all of the gains accrued to workers with above median experience when the minimum wage increase started at baseline, okay? So the folks who had been working for a while were seen as being worthy of the minimum wage increase, right? They were productive enough to warrant the increase in the minimum wage, but the less experienced workers weren't producing that much. And so they saw no significant change to weekly pay, meaning they might have lost some hours, okay? So you're gonna, if you have to pay everybody more, you're gonna use more of the hours of people who are producing more and less of the hours of people who are less productive. Is that an exchange for wage compression? So wage compression usually refers to what happens to wages above the minimum wage. And here we're talking about weekly take-home pay. So it's slightly different. Yeah, I'm just thinking, again, there's people are concerned if you have experience in a minimum wage of $12, I'm making $14 an hour. If I'm making $50 an hour, shouldn't I be getting $17 an hour? But this isn't measuring that, it's measuring people at the minimum wage who are productive before they get raises. Cause raises aren't happening at that whatever, so. Okay, that's good. Yeah, yes. Yeah, I think that's like the next standard conversation. Okay, and about a quarter of the group can be attributed to experienced workers working outside of the Seattle city limits, okay? So maybe these folks at the minimum wage maintain the same number of hours at their current job, but they also went outside the city where they were paid a bit less but could get more hours of work, okay? So they increased their take-home pay, but they did so by increasing hours of work outside of where the new minimum wage was affected. We're gonna run out of time, so. Yes. But this last bullet. Yeah, that's the key, yeah. I think that's really important. So where are we at, John, if you can scroll up. So there we are. So the office associate the minimum wage ordinance with an 8% reduction in job turnover for rates, which is a good thing, right? Employers keep their employees longer. But also a significant reduction in the rate of new entries into the workforce. So by raising the minimum wage, you're making it a little bit harder for employers to take on an inexperienced worker, right? It's just a little bit harder. But because the more experienced people aren't leaving, I have a lower rate. Yes. So there are fewer workers to turn. You're opening? No, except if you're right out of high school and you have no education for your first class. Yeah, you're probably not a second thing. Right. So it just shows you. It's trying to shave a raw individual. And there were other questions with the Seattle study as well, that again, we can see what we wanna see and hear what we wanna hear from others as well. Yes. And we'll go into pieces. So the last check, the last section we did not get to talks about the modeling. Yes. And we can read that. I think we'll have a little bit of through time on the floor today, just at some point if you feel like you can fit in a few minutes to read, I think there's probably gonna be a little bit of time to do that. Sometime between now and 10 o'clock tonight. Whatever. Thank you. Thank you. You're welcome. Thank you. Are we off? Are we off? So committee, just very quickly, I just wanted to let you know so representative Azala has been out and her partner is pregnant and is having issues with his pregnancy. So it's just a question of Deanna's with ACE and her husband with ACE. So just keep them in your thoughts and I don't know anything more than that but tough times. Thank you. Yeah, thanks.