 Maybe we're looking at minimum wage and Debra Ritten is going to come in and talk to us about her work on the benefits book. So, thank you for the record, I'm Debra Ritten, and I'm a consultant to the JET Fiscal Office. And so what I'm going to try to do is just talk about how the benefit-cliff issue intersects with the minimum wage and why it's addressed in S40, is that right? I think so. So we don't have the bill, we may never get it, which is fine. But the fiscal note does talk about revenue impacts, and it's a significant enough subject that I just felt that it makes sense to get this committee as informed as possible. The bill's still up in general committee, and we're going to hear from Tom Cadet after review. So I understand that we haven't taken a lot of testimony out of you guys a little bit, but. Okay. We had to wait for the gesture in. Great, thank you. So, benefit-cliff is a term that's been around for a really long time, and we're not exactly using it to mean a cliff. But if we look at, in this chart, this is sort of the landscape that we would like to see. And we've looked at this landscape for all the different types of families that are in the basic needs budget. And so, across the bottom here, you have gross earnings increasing from zero to 82,500. And then up the bar of this axis is showing you the net resources that they have available to be able to meet their basic needs. And the solid bar at the bottom is their earnings, their net earnings. And then the other little bars on top are the different types of public benefits, the value of the different types of public benefits that can help. That earnings is after-tax earnings, that's what I mean. The tax is actually showing us the bottom. But this is after-tax, yes. Okay, thank you. And so what you see, this is just a single person, simplest case. But what you see is there's no cliff, essentially. And as earnings increase, the income doesn't go up necessarily straight up, but it continues going up. So that you're not seeing that when somebody earns an extra dollar, they lose $2 in net resources, which would be the cliff. Okay, and so we ran through these for every different type of household. And then the next chart, that's not the next, the next one should be two people. That's it. Great, thank you. So this one is the only family type where we ran into problems. And that is the cliff, as we're going to call it, is this decline in net resources as your income increases in this range. I don't know if you were mid-sentence, so I have a question. Did you get to finish your sentence? Go ahead. I see you have the federal EITC on here, and I'm looking for the state EITC. I don't see it, but is it recounted in that after tax income, or where is it? So the state EITC is there. It is, I think it's the purple. Is it raised in a kind of a strange order? Senator Pearson asked for the ones that were least likely to influence to be on the bottom, and the ones that were most likely to be able to change on the top, so that state ones are at the top. So there is a bill that the House has approved that would increase the Vermont EITC. What does that do to this chart? Does it move this thing out of it? A tiny amount mostly increases. So now we're at 32%, and it increased to 35%. Just about 3%. I think 10%. It moves it up a little bit, this purple one. And so then when it comes down, it's a little bit higher when it's coming down as well on the down slope. I'll show a picture of the EITC in a minute to explain more of that. Okay. I have a question about this, sort of a more general question. Maybe I should stay focused on that detail first. But the federal tax code has obviously changed pretty dramatically, but the state tax code is we think for the change. Even if we do nothing, it changes in some weird ways. Is there a way to reflect those changes in this chart? Or are we just in a position of having to analyze this based on a tax code, two tax codes that are no longer in effect? I think that the tax code, the federal tax code doesn't really affect this much at all, except in that it reduces the revenues that come in. So the subsequent budgets and other legislation to meet the revenue needs cut the different benefits. But it's unknown at this point. They could, but they didn't. They haven't yet. They haven't. I mean, the current budget didn't. The budget was just signed. The federal budget? We don't know the actual outcome of all the different pieces. But I think right now the farm bill has cuts to the food stamps in it. It eliminates fuel assistance, I think, so. So it may be some impacts. That's correct. And what about the changes in the state, perhaps? The changes that the states proposing are, with the exception of the EITC, are not really affecting this term. Even though they do affect tax income in both cases. Yeah, there's very little after tax income in this income. I just would appreciate a quick rundown as to what all these programs are. I think I know most of them, but there are a few I'm not familiar with. So starting from the bottom, the big guys, and the ones that caused this problem because they declined. Three squares is this blue one. That's from the students, right? Yes. And let's see. So we have about 80,000 people getting three squares now. And it's bringing in $114 million to the state. So when this is cut, 30%, it's pretty significant to us. And the state is the whole. And to this population. And it cuts out at 185%. Oh, I should explain this. Could we have a next slide just for a second? Sure. Thanks. We'll go back to that. But just like the three measures that we have of ability to make ends meet. And the minimum wage is the one that we're looking at. And so the minimum wage working 40 hours full time a week would end up being $21,840. And 100% of the federal poverty level depends on the different household size. For one person, it's $12,000. For two people, it's $16. And for three people, it's $21. And the third thing is, if we could go back to the previous term. Thank you. The third thing is what we do as the states to figure out the basic needs budget for each type of household. And so that's this black line at the top. So I managed to get these diamonds to show up this time. This is 100% of federal poverty level for this household. This is $200 and this is $300. Most of these programs are geared to federal poverty level. So at 100% of federal poverty level, you get the full amount. And then it declines between usually 100 and 200%. So that's where you're seeing this problem here. So food stamps, we have sort of extended it and it declines. It ends at 185% of federal poverty level. I think the proposal is to do away with that to make us stop at 130%. It would affect us by the blue would cut out sooner. The federal proposal? I'm sorry, 10 seconds. Are you talking about the federal proposal? Yeah. And it's a federal program. So we have used every power we could to extend what we can. But the discussion is to make the voluntary parts less flexible. How would you, can you tell how many people that would affect that cut down for families? No. I understand that that Agency of Human Services hasn't figured it out yet, quite. So unfortunately, we can't only do this, update this yet until we get a little closer. So let's see. The next one, the pink is earned income tax credit. Really important. And this also phases out around the same point, 200% of federal poverty level. And then ours is 32, seem to be 35% of that. That's the purple at the top. And it's at the top because it's ours. We can do away with that. Let's see. They're federal tax credits. This is child tax credits. This is Greenland. And then this big brown blob that goes all the way out is a combination of Medicaid and the exchange. Okay. So at 185% of poverty level, you move off Medicaid. The parent does and went to the exchange so it's smaller. But it doesn't, it doesn't create a cliff. And I guess this is broken two pieces. One has, there's a federal premium subsidy. Then there's the Vermont premium subsidy. There's the cost sharing, the Vermont cost sharing. Let's see. Reach up is very small because it's cut out very soon. Fuel assistance ends at about 185% of federal poverty level. That might be totally eliminated. The biggest one here that makes this family, this house is a dip that we don't see in any of the other families is this green one here. And that's child care financial assistance program. I'm not going to go through them. I've got other questions lined up. Go ahead. Okay. So that's really the reason that S40 decided to focus on this program when it was looking at dealing with the benefit close. And part of the reason is that if people's wages increased, we put them in this category of seeing their child care associated decrease and their total benefits decreasing. Okay. Could you do the next slide? Sure. One after the next slide. The next one after that. Okay. So I want to be sure that you've gotten through your list. And then I've got two people with questions. So are you going to bring in some more detail on one of these or did you get through everything? I think I got through the list of all of our different pieces. Definitely the big ones. Okay. So let's come back to this in a second. And I've got Cynthia, Jim. No, I'm good. Jim, on your charts, we're assuming that, or you're assuming for the sake of making these up, that a family of whatever applies for all that's available to them. And some people don't for some reason. Do we have any information on percentage of families who do or don't apply for various, or I'd have to ask somebody else probably? An inclination. I could probably get it too. Okay. I'm just curious. For each of these programs, I used census data and compared it with enrollment. Okay. And you would look at census data and you would say these people are eligible. Yeah. But there may be other reasons that they're not eligible. But it's definitely much, we have many people that look like from census data, they're eligible but they don't. I have one more specific question on, for instance, child care subsidy. Thank you. That's based on current budget assumptions. I mean, what's in the house pass budget and that kind of stuff like that. Okay. Thank you. Thanks. I just wanted to understand the differences between Vermont child care subsidy. We go back to the other chart. The child dependent care child care subsidy, which I think it's daycare. And there was a few other children. Child tax credit. And I think that's just a credit. You get any taxes for taxes, right? That's right. And federal child dependent care. I just, in my mind, I want to just make clear the program. Right. I should have written tax credit. But child dependent care, both Vermont and federal, are tax credits. And then child care subsidy is actually paying for child care. And it's federal, there's federal money and state money in the child care subsidy. It doesn't seem entirely clear to me, but I sort of think I know what they are. The child care subsidy is literally helping with big care. And paying for care of a child. Right. More tax related. It's not tax related. And it's money that actually goes to the child care provider. Okay. To pay for the child care tax. Where's the child dependent care one in? Those are credits. And then there's a separate child tax credit as well. Yes. Lots of little pieces. Yeah. Yeah. You would think we could. Yeah. There's something simpler, right? So could we get to the, I think then to the EITC one. Not the next one, but this one. Yes. Thank you. I wanted to show this one because I know this is tax again. And I know you know about the EITC, but not so much to see it as a picture and how it fits in. Okay. So. Is this federal or state? Well, the percentage is the same because we're a percentage. Say that again. We're a percentage of this. Yeah. So. So this is the federal rate. This is the federal. And ours looks exactly the same. It looks exactly the same. We just tag on to this. So you have again income increasing across the bottom. And then you have the credit amount increasing this way. And so this was unlike the other ones where you get 100% of the benefit at 100% of federal poverty level. And then it declines. This was designed as an incentive to work. So you start with zero. And then the more you work and the more you earn, the more your credit is. And the amount depends on the number of children that you have. So looking at the top one, which is three children, as you go from zero to 14,000 in income for every dollar you earn, you're actually getting an extra 45 cents from this credit. And then there's sort of a plateau range where it comes between 14,000 and 18. And then at that point it phases out. And so for every dollar that you earn, you're losing 21 cents on this. You're losing 21 cents of the subsidy. 21 cents of the credit. Of the credit. Yes. You keep your dollar. Yeah. But the problem is when that dollar that you've, well, maybe I should just say then we've got the, Vermont one on top of this and if it's 35%, you'd end up losing 28 cents for each dollar that you earn. But you would have gotten more. You would have started more with more. You would have gotten more and then you would have lost more. Yeah. But then you think about it, you add this to the other pieces and food stamps, snap. The general thing is for every dollar that you earn, you lose 24 cents. So you sort of, you add these pieces together and you see how you end up going backwards. And so I think in terms of the addressing that, the slow, I'll call it a cliff. The more effective way to use the earned income tax credit would be to extend this plateau to address that. That would take a couple of us from the federal system. Yeah. It would be better if the federal system did that. Yeah. Okay. Could you do the next one? Sure. Thank you. Okay. So this is the childcare financial assistance program. And so for every, almost all of the programs, say food stamps, they first determine what it costs to meet that need. And then for two parts, you determine how much it costs and then you determine how much each family gets based on their family income. So for childcare financial assistance program, people always say, well, how much did I get in the subsidy? It depends on whether it's an infant toddler preschool or school age child. And then it depends on whether you need full-time, part-time extended care. And then it depends on this quality rating of the type of facility that you're in. But if you took an infant and say it was a three-star facility and full-time, it would be $180.43 a week is currently what our maximum subsidy would be. Next one. And then this is how you figure out how much of that you would get. Again, we've got income across the bottom, but in this case it's a percent of federal poverty level. And then this is the percent of the maximum that you would get. And so at 100 percent federal poverty level, you'd get 100 percent of the subsidy. At 150 percent of federal poverty level, you would get 60 percent of the subsidy. Next one. So for an example, this is a single parent with one child, an infant, $23,000 income. They're at 95 percent. The maximum state payment is $180 a week. They get 95 percent of that, 171. This is what they get in a year. If their income increased by 2.75 percent, it would go up to this, but they get 90 percent of the subsidy. So that would be 162 a week. That would be 8,444 a year. So they would gain 633 in income, and that is $469 in child care subsidy. Next one. Which is okay until you combine it with all of the other programs. So what happens then at the bottom line becomes you gain 633 in income, and you lose 765 in benefits. Did you get the next one? So this is the proposal that's in S40. And it's simply to take that, the sliding scale chart, and move it over to the right. So that you, at 100 percent, let's say, your income goes up because of the minimum wage to 110 percent. So we've moved the slope over 10 percent, so you would still get 100 percent of the subsidy. No change. At 150 percent, your income goes up to say 160 percent. So you go up down to the purple line and you still get 60 percent of the subsidy. No change. And so this is when you combine it with everything else, all the other benefits. The bottom line is you're still gaining 633 in income, but you're only losing 436 in the child care subsidy. I know this is not the topic that you're presenting on, but my recollection is that the CCFAP program has another issue with the minimum wage in that it would put upward pressure on the child care workers, which might increase their cost, which might mean that the subsidy would not actually buy as much. And I know this is not the essence of your presentation, but am I correct that there's that issue as well? Yes, you're correct. And when we estimated the cost in steps, as it goes down, we did an introcap. You took that introcap. Excellent. Yet another piece? Okay. And that is that schedule that I showed you with $180 as the maximum subsidy. Yes. That's based on a market study that's way old. So that rate isn't current. Okay. And this would have budgetary implications, both of them moving the sale out and dealing with the market. Thank you. Absolutely. Did you do the next one? Yeah. So that proposal was in test 40 as it passed the Senate, and the other part was like it was like fund CCFAP as necessary, or like if money becomes available magically. That's for funding the child care workers as opposed to- If you could show the next, I think I've got the language in here. Yes, okay. Here we go. So the two pieces are the sliding skill and also the market rate. And all this bill that was asking for is to up the market rate as wages go up. It hasn't addressed that fundamental gap that we have between- I understand there's a brand new study, is that correct? That's out for 2017 market rates? It's not out yet. Okay. All right. But anyway, we're substantially behind- The market rate is substantially behind- that has not been addressed. Without the bill. Even if we didn't change something up, is that right? Yeah. I'm just trying to understand. Yes. Even if we didn't change anything, the market rates that we're using- Yeah. Yeah, we had a day. And what is the moving the sliding scale as a cost? And that's factored into the bill. Yes. So the one prior to that has the cost. I'm sorry. That's all right. Thank you. Okay. So this column here is what we've estimated to be the cost for each of the steps in the minimum wage bill. And it goes up because you're bringing in more people as well as there being more workers are getting a raise. You're bringing in more people to the program? More people are participating is the estimate. And this is really the wild card is how we anticipate getting back to your question. What is the moving the sliding scale over? Not only are the people who get that equivalent wage increase will be in the same place. But somebody who doesn't get a wage increase suddenly goes, oh, it's a better deal than it was before. And who those people are and when they're going- We don't know. Thank you. That's the wild card. We're going to try to estimate it by looking at if the subsidy percentage is a certain amount, how many of the eligible people come in. And then as the subsidy increase, we will apply that to them. This is only to $12.95. It's not to $15. This is an $18. So it's real. This is, yeah. These are nominal dollars. Sorry. That is the $15. This is the 2018 dollars. It's the real dollars. Okay. So the nominal cost would be higher. All of these things, okay, it really should say that somewhere. I don't see- Yeah, you're right. It should say they're all in for the $18, not just the minimum wage. I know. So that all the budget dollars, when you get to $24, it's not going to be $17.5. That's right. That would be, you know, $25 or something. That's correct. Yeah. You're right. I should put that on the top. Sorry. I'm very obsessive about that. Actually, I am too. I'm surprised I didn't write it, but- You wouldn't have. So I tried to, like, rush through this so that you could get, like, a flavor of what's happening. Right. But it looks like I have five minutes if you have a question. Anyone have any questions? That was very helpful. Yeah. Very helpful. She's a little- Yeah. So in terms of going all the way to the $15, is there a point at which, as the rates go up, there becomes a bigger problem? I mean, in some ways, could there be a better stop, be a better point to stop than $15? In terms of maximizing everybody's benefit? It's a good question. Yeah. I read in one state that they found that there was, like, the sweet spot. Right. And I didn't find it. So it's clear- Well, I didn't explain this other column, the first column, which is that Tom can pick up from here. We do gain some state revenue in the process. And so the idea was to take as much of that state revenue as we could to address this issue. And a lot of that comes from Medicaid, when people are moving off of Medicaid and onto the exchange. Some of it comes from increased income taxes, reduced EITC, reduced other benefits. And if there's a, most of that is pretty much of a line. If there's a jump in that, I guess it's getting off of Medicaid. Because that just takes, it frees up state money in a big job. And that's the parent getting off, right? Yes. Children stay on Dr. Dinosaur or whatever. But the parent gets off and that's the- The parent gets off and although that maybe cuts to Dr. Dinosaur, we don't know about that. But they would stay until 317% of federal poverty level so that they're not- It's not an issue for them. But getting the parent off Medicaid when they go off, it saves a chunk of money to the state. Okay? This is off the top of your head, it was in your presentation. But, you know, 1295 and 2024, do you remember what it would be just under the current indexed? It's in the memos. It's in the memos. Thank you. It's in what choice person? Yeah. It would be 1216. 1216. Wait, that's- That's in- That's nominal. Yeah. It's in one of these- Do you have all these numbers in your head? 2024. Yeah. 1220 with the current inflation assumptions that are updated. 12. Nominal? Yeah. That sounds right. Thank you. Thank you. Well, how are you? Why? Yeah, minimum wage. So, I've circulated a bunch of documents that have been written over the last year on this. In anticipation of more just of a Q&A session with you all, the work we did on this goes back to 1999, like DEB. And the analysis that had been done was really different than we started doing in 1999 from most other minimum wage analysis, mostly by virtue of the work that DEB did that looked at not just like, well, what's the minimum wage increase going to be, but what's the effect on the income of the people that you're trying to help? And if you're taking away benefits that are worth more than the wage gains, you're not really ending up in a better place, and therefore policy needed to address that as well as anything with wages. And the work that DEB did to get at that was phenomenal and has continued to do because she has to go through all of the various programs, see where the levels are, where people come in and out and this sort of thing, and then calculate that. And she's done that. But there are very few other state level minimum wage studies you'll see that do that kind of work. And it also then affects federal money and, of course, state fiscal impacts as well. So, you know, that's been a part of all of the minimum wage analysis we've done. It's been updated several times for different wage levels over the years, and most of those increases that have been approved in the past, I would describe as being relatively modest. They've been at or close to sort of prevailing wage levels, so they sort of kept up with that. And what that tends to do is sweep sort of everybody into a minimum wage category. You know, it's interesting, and I'll talk about this a little bit later. There are, when we look at New Hampshire, minimum wage, low wage workers in New Hampshire, and I think we talked about this once before in this committee, but we did sort of a cursory analysis of who are the workers that are below the Vermont minimum wage in 2015 in New Hampshire. And they were 70% women. It was a fairly substantial portion of the labor force, like 13% of the labor force. But those are sort of the workers that even if the prevailing wage is above the minimum wage, they don't really get swept up. They're not squeaky wheels or they're not looking for other jobs or whatever, and so they stay below the minimum wage. And that was an interesting finding looking at that. But what we did in this last analysis for the summer study committee was we did analyses of sort of stakes in the ground, not knowing what they were going to end up at, and sort of took the most aggressive, which was $15 in 2022. Yeah, 2022. And then the least aggressive was $1250 in 2021, and then did an in-between one also. But we didn't do an analysis that's what's now in statute. So I can't really put numbers on that. I mean, what's now in the bill? Yeah, what's now in the bill. 2024. That's right. So it's a little bit below the more extreme stake and kind of in line with the second stake but further and quite a bit above the second stake. So Joint Fiscal has done some, you know, using those stakes in the ground. It's done some estimates in between those, and I think they're reasonable, but they're not numbers that we produce, so I can't really speak to those. But I'd be happy to talk about, you know, general issues around it. And I think this issue is both economic, and we always run these big models and factor in a zillion different things and try to estimate efficiency, wage responses. And, you know, we calculate down to the last worker how many workers there are and make all these adjustments by industry and all the rest. But I think it's both an economic issue and there's a big non-economic aspect to this. You know, if I were to run these kind of economic models on child labor laws when they were put into effect, you would have had negative economic impacts coming from that short term anyway. I mean, if you did long term, obviously you got societal gains and, you know, better labor force, better educated labor force and all the rest. But minimum wage laws are really enacted largely as sort of more like a societal standard or a labor standard more than saying, oh, this is going to stimulate the economy. And as you get into the higher wage increases, which these are, these are above what's been studied in the literature in the past, you get increasingly uncertain impacts because there's nothing I can pen to that and say, oh, yeah, this happened in Nebraska a few years ago and they analyzed it and here's the result. It's, it's, this is above those levels. So one of the things that, and tell me if I'm seeing this wrong, because this goes out to 2024, we're having to make assumptions about tax policy and about inflation that at some point are guesswork. The farther you actually go, the wider your competence level is. And so that, so it, when somebody looks at these studies, they think, oh my God, we're going to lose 1,232, I don't care what the numbers are, jobs and there's going to be a, you know, some, it looks as though we're able to quantify all the impacts. But it feels that the one thing you've touched on, we can't quantify the social benefit, which is one of the, I think you've correct and pointing out, that's one of the reasons why some of us would support an increase. So that doesn't get quantified. And that the other is that when you're projecting that far out, you're projecting on the basis of assumptions that are, we just aren't tested. We just open up. Yeah, so some things are easy to forecast and some things aren't, and we could provide a band. But even since we did the analysis, we were using, in order to keep these studies consistent over time, we were using inflation assumptions from December of 2016. So that was what was being used going out into the future. Since then, those inflation forecasts have gone up. So, and also the passage of this tax act is really juicing the economy in a way that is driving down, will drive down unemployment even more and will provide upward pressure on wages. So, yeah, so it's very likely. I mean, already you're hearing a lot of stories about labor shortages and we're finally seeing some wage increase just from these market factors. So it's likely that the prevailing wage will be higher than we thought when the analysis was done and so a nominal $15 rate probably would have less negative impact than was estimated back then. And, you know, aside from the societal side of it as well, I mean, even though there are job losses as you raise the price of an input to production, there's going to be less of a use, it represents, I think, in our more extreme case, something in the neighborhood of 3% of all minimum wage jobs, you know, you'd have a loss of jobs. I think if you put it to a vote from the minimum wage workers and said you have a 97% chance of getting a pay increase or a 3% chance of losing your job or having hours reduced such a less income, I think many, given the hopelessness of some of the situations they're in, would readily vote for that. You know, the lottery tax is paid largely disproportionately by low-income people. And, in some ways, that's more a purchase of hope than anything else because statistically it makes no sense. Joint fiscal sometimes refers to the lottery taxes, the tax on the mathematically challenge, because it is, you know, you just really, it's not a wise investment. It doesn't, you know, the chances are so low that you'll win, but there's a hope, there's some hope. I think with a lot of people they would not stand to get much of an increase absent something like this, and so it might be that, you know, it would still be having pages. Anyway. When you were doing that, it's a little harder to look forward, but what did you look at the minimum wage and quick increases that we just went through and what the effects were on the economy? You know, this is something I recommend and it's not in the legislation now, but Senate Economic Development asked us to do, you know, sort of what we recommend is it's a two-pager that's one of the handout things that, you know, that calls for monitoring and studying some of the effects. I mean, we have a situation now with New Hampshire, and I think there's a chart somewhere in here. This is page six of the October memo, though, it shows the differential between Vermont and New Hampshire, and there's been now about a 15-year period where there's been a pretty significant departure in the two states, and, you know, and it doesn't look like there's anything on the cusp in New Hampshire of changing, so they're at the federal minimum wage and over this 15-year period that there's been a pretty pronounced differential, you would expect to start to see some differences and impacts and, well, perhaps in economic development in certain sectors that rely on low-income workers, on wage distributions, on, you know, things like this gender split that we saw just in doing a cursory analysis of the data, but I think it would be interesting to dig more deeply into that and to monitor if you decide to go ahead with further increases to have your pulse on that and also study more rigorously what the impacts are. You've probably seen these Seattle studies and it's not yet $15 that's been studied, but $13, and they're competing interpretations of the data right now, but as more data come in, it'll be clear what's going on, but it'll at least provide some basis for understanding what's really happening, especially when we're in uncharted territory, so I would recommend doing that sort of thing if you can. So one of the things that, you know, six years seems like a long way away to plan for me and, you know, $15 is the magic number. To my way of thinking, it seems to make a little bit more sense to, like, go three years to see where you're at rather than... Yeah, there have been states that have done things with a longer term thing, but then had check-ins, you know, so, like, there's a check-in in a year or two years and say, well, let's look at it and is it having negative effects or is it nothing? Could we go faster? Should we go slower? I think those sort of things would make sense given the uncertainty out there. I know there's a desire to have a particular number show up somewhere, but that kind of flexibility doesn't seem unreasonable. In your looking at this, did you look at any of, like, the impacts of rural areas versus urban areas? Is it different? Yeah, we didn't break that out, so we didn't do any sub-state analysis either. So I know Cynthia, you were interested in that. And we looked at it by industry. All the modeling was done at the state level, so we're trying to identify vulnerable industries and, you know, vulnerable occupations and things like that, but, you know, prevailing wages will be lower in some of these rural areas, so there would be more of an increase. And there's some states that have done, well, New York, for example, you know, has these differential ones. You know, there's always a trade-off with the complexity of, you know, laws like that and, you know, both reinforcement and simplicity and all the rest. I'm just not sure if the rising tide's going to raise all boats or sink some. Those are my boats. There is a very different, very divergent economic situation in most states between urban areas and rural areas, and that's been more pronounced in this recovery than in prior. Cynthia. What you say about monitoring the economic impact is really important to me, and we've only just finished the statutory increases in the minimum wages past January, so one of my concerns about going forward is the question of what are the impacts of what we've already done and make sure we understand that before we go further. And some people are saying, well, we don't see any negative income, so we can do more. Even if there isn't a negative impact, and I don't know that, that doesn't mean there wouldn't be one from going further because according to the figures in one of these studies, we would end up from 2014 to 2024 with a 45% increase in real wage and a 72% increase in nominal wage, and there are no real-world experiments of that magnitude change that fast. So I think the idea of putting in economic monitoring but going ahead with further increases anyway is really faulty to me. We've already increased it, and I voted for that increase. We've increased it, and we'll still be adjusting for inflation. But we should study, we should hit the pause button and study before we go on and do more. I really think it's irresponsible. I also have a question. Understanding how you do, you measure these net job losses because it'll say 200 a year or 304 or 950, and Joyce, I think, she's not here, said it was as if this is where the job line might have been across time, the employment line, if we hadn't increased it, and then there's a lower line that you have a small divergence and then it gets bigger and bigger as business owners substitute out of labor into capital or whatever is happening. It gets bigger and bigger and then it stabilizes. And so the question is, when one says 200 the first year, 359, 5200, long term, are you measuring the same jobs and then adding more job losses? Or are these new jobs being lost? I don't understand. No, it's just a difference. So it's like a constant number relative to where you would have been. That's what I thought. That's what I thought. And the effects are lagged, so you're right. Yes. So even if you were to measure what are the effects of this last set of increases, you know, the changes in January of this year, that would take a while to fully play out if you're measuring it, because you don't have these instantaneous responses from... Well, you might have just a minute of hours, but maybe not jobs. Yeah, but even that often doesn't happen immediately. You know, you'll get the change and then they'll try to pass prices on. If you can't pass prices on, then what do you do? And, you know, I think it's ended up, just as the way markets have worked out, I think it stays pretty close to the prevailing wage. So that's why I don't think you would find huge impacts. From what we've done. From what we've done so far. Not necessarily. Not necessarily. The other question is, another of my problems with going further with the minimum wage is that if we're in an economic expansion, which we are right now, the market is increasing the wage, the pressure on the wage anyway. If we go into a recession, which we will at some point, because we always do, having a higher minimum wage will mean more recessionary job losses. And I don't know if that is factored into what the model protects at all. Is it just projecting the job losses if we have an expansionary economy the whole time? Because if you're intervening in the labor market and having, you know, setting a higher wage, when you go into a recession, chances are you're going to have more job losses. So is that factored into the net increase in revenue that's projected? Is that factored into the job losses? And this gets into the question of the assumptions underlying the model's protection. Yeah. So these are good points. But there's not a cycle imposed on this job loss number or this trend number that the running model would use. But that goes both ways. So you would have less negative impact like now, and it looks more boomy busty the way it's shaping up. It had been this very slow, steady recovery without very underwhelming recovery. But because it was underwhelming, there were no imbalances that were developing really in the economy. Right. So there was no reason to have a recession to correct something. Right. Now you're starting to get pressures that look a lot more like that. Even in housing, you're seeing price increases in some mountain and western states that are, you know, 10, 12% a year. That can't, that can't continue. You know, it'll go for a while. But, you know, there will be regional busts that are going to happen. It's not going to happen here because we've hardly come back, you know, just a little bit above the peak levels we were at before. But this is, but that would go both ways. So you would have less impact as the economy is booming. And then in a recession, yeah, it would swing below, but it would be, if you were to sort of long-term average, it would still be close to that number in terms of how it works. It's not a cyclical model. One of the things that I'm having trouble understanding and perhaps you can help me, that this idea of looking back and monitoring, you know, going out three years and then figuring out where we are and how many jobs we're losing and then deciding, again, how do you, when you're looking back and doing that kind of evaluation, how do you control for other factors for things like, I don't know, you've named a bunch of them. Yeah, it's hard. It's really hard because it's not a perfect experiment. It's not like some Petri dish where you isolate wages and everything else stays the same. Can you control for other factors? Well, yeah, you can look at other places that are similar and say, well, what happened there? So they're just, it's direction, indication. That's what all these academic studies have tried to do in different ways. But their thing, it's not like you'll come up with a definitive number and say, this is how many jobs were lost because of the minimum wage. It's just that you can say there's been a noticeable decline in hours worked for low wage workers. And that didn't happen in New Hampshire or didn't happen in some other place that's very similar in terms of a lot of other conditions. You can look county by county, then some state level stuff. It just starts to paint a picture of like, is there economic distress that's localized in the places that we'd expect there to be if it was caused by the minimum wage? There's a lot of other factors and you can't get rid of all of this. You can try to model them and you can try to put those in but there are a lot of other things happen. It's not like it's gonna be perfect but it would give you some indication. It might give us some indication. Yeah, I think you would get some guidance but it's not gonna be down to the tenth decimal or it's not gonna be down, it's gonna be plus or minus something but you'll know, is it large? Is it, you know, trivial? Would there be some guidance if everything looked the same? Well then, that would be guidance too. It's like there's not any difference so this is not, that would suggest that it's very close to prevailing wages and it wouldn't have really made much difference. Although you do get this effect in places that don't have the minimum wage where there's still a class that ends up getting some minimum wage and some. Joey and Kurt. I've heard people remark that this is going to have a negative impact on Vermont businesses, small businesses if we raise a minimum wage. Can you comment on that? There are some sectors that will be heavily influenced so to the extent that a business can't pass the costs on creates pressure. So if you're an export-oriented business that is competing with a political jurisdiction that doesn't have any minimum wage and labor is a big part of the total production cost then you're going to be at a competitive disadvantage and it will be very hard to swallow enough of the costs through profit or through efficiencies that to say. To interpret what you're saying is this going to be a problem on New Hampshire border? It could be more of a problem on the New Hampshire border than some places but if this is say it's a business you know, a manufacturing business it wouldn't matter where in the state it was it's not like you get the and in a lot of these sectors like take retail which is one of the sectors that's low wage you already have a big differential with New Hampshire by virtue of other laws that are in place like Act 250 which limited the development of big box type stores a lower or non-existent sales tax which also affected the retail sector and where those establishes are built but then you also have much more job loss recently in the big box sector as a result of internet competition and that's hitting New Hampshire way harder than it's hitting Vermont because all those stores went there all the rest of the border was over there so you have all these other things that are going on at the same time now people can also work in New Hampshire very easily and live in Vermont and go across the border and still get a job people shop across the border the development of those stores also involves construction firms that are in Vermont as well as New Hampshire so it's not like everything's just cleanly on one side or the other but you'd have to look at it sector by sector the industries that are most vulnerable are those that can't pass the cost on and have a high share of labor cost so if you're competing like in some industries you can pass cost on and all your competitors are having to do the same thing so you're not at much of a disadvantage you'll get a little bit less demand because the overall price will go up a little bit but usually it's a fairly small number that's really where the vulnerability exists and that's almost company by company it's not just you can't just say it's all small business or you know everybody even in one sector thanks Tom in the Seattle study is there I may be seeing this but is there a link to the studies of you said there's two competing sets of data yeah once the University of Washington I think was the one that was hired by the state to analyze the data and then there was a Berkeley group do you have a link you can I can do that or if anybody from Joint Fiscal in the room they can do that too looking at those what do we take from completely different takes on that just that one looks at it in a more conservative way the more liberal way no because I mean the Berkeley group has a track record of supporting minimum wage increases so you know that's important to know before but they're also well respected academics so it's not like they're pulling data that don't exist it's that the data the initial data out isn't that robust it's not the whole data set and it's also in a sub-state region so it's really hard to get economic data that's in a small region so you've got some chain stores for example that report information not by each store's location but by the whole all other stores and things like that so there's some technical issues that make it hard to say definitively but the more data that come in it'll be harder to disagree on a lot of the basic things a couple more quick things total number of minimum wage workers in Vermont is it's in the report because we didn't do the one that's for the legislation that's pending I laid it out for all the stakes we put in the ground with us there and when with that number does that include tips and plays I it does include in that number I it does include tips and plays they're included as part of that minimum wage let me ask Matt in the data you provided us by sector tips and plays show up as part of the job counts and the wage level in occupational employment data would be absent tips with tips Matt Bearwoods, Economic Labor Market Information Chief of the Vermont Department of Labor the source of the information which is generating this is occupational data collected by firms and we do in the instructions ask employers to report out tips but as it relates to tipped wages we do believe that many employers under report fully understand the tips being realized like if you leave cash versus if you leave credit cards we do believe that the data is improving but we do see some serious discrepancies so it is meant to capture tips how well it does that is a question so this is a data issue but conceptually it's in there so they're included in that number one more question is you talked about New Hampshire and that we should really take a really close look at what the impacts are of their 725 minimum wage versus how it impacts us what would we be looking at for how it impacts us on so a lot of the minimum wage studies that have been done tried to look at border areas of states that increase the minimum wage and then so all the counties that are adjacent to states that did and did not increase the minimum wage either they'll look at one sector like restaurants or something like that and say what happened was there a whole lot more hiring here where it's a job loss over here relative to the two sides so you think alright this is a sector that's likely to have high impact what happened were there fewer jobs or more jobs or things like that so you're trying to look at things that are differences between both immediate counties and then if there's better data at the state level because there's more information is there anything even at a state level that can give you some guidance as to that so it's trying to identify things that are happening as a result of it that could be considered as we haven't done that we did this cursory look at the New Hampshire wage data it's in the February 2nd memo that was February 8th memo that was set and there's a table in that towards the end of that and it just shows what you know first pass look at the New Hampshire data and how it differs from Vermont but you could go a lot further it's page 6 of the of this table let me be a simple surgeon for a minute so you know when you're going to decide about operating on somebody you have to operate on it you have to take the information that you have you know imperfect and you have to look at the risks you understand even though there may be additional risks that you don't know about and you have to weigh those two things and you've got a binary choice operator you don't operate and it's a little bit similar it comes in here each one of us is going to make a choice vote for increased minimum wage or not based on admittedly imperfect information admittedly unknown uncharted territory that we're going into if you were our economic surgeon would you advise us to have this procedure or not I'm sorry to have to like you can't do that doc you have to decide the patient's suffering what I can talk about are some of the risks but as I said it's not just an economic issue and that's why I think it's there is a political realm to this there is something that says you know are there societal standards that we want to state as a community as a society you know that say there's a dignity to work such that even the lowest level worker gets this amount of pay so that's a consideration that's outside of what I've analyzed and isn't really I mean it is something I think each of you have to weigh yourselves that is what this delivery process is about from just the economic risks I think the way the economy is going right now your risks are low in the near term because the prevailing wage is going to stay ahead of or be very close to it but it is increasingly uncertain the further out you get and you don't have to do the whole operation today you know so you do have choices about timing and and either you can get more information along the way and have a better idea you can you can chart it out it would be good to have some flexibility probably around that but but there are reasons maybe also to say this is where we're going and that's it but those would be more political than economic so George is operating he's doing the operation he's doing the operation when at first you do no harm like that you can't operate if you refuse to do any harm you're just going to cut the skin no matter what but it's not emergency for a whole so many people yes and they may lose their jobs and the odds of losing your job in Venice County will be higher thank you do you have any stats or are there on the relationship between minimum wage increases and state GDP especially in instances where the minimum wage is going up than what the projected gross domestic product would be for a state and what the implications of that are if any I haven't seen an analysis that goes so far as to say there would be measurable GSP changes from prior minimum wage increases at any state there's so many other things that affect gross state product far far more than minimum wage changes and some of the states with relatively high wages I've had very strong robust growth and some states with no minimum wage with the federal have had very slow growth but there's so many other factors that are more important than that that I don't think you would get statistical reliability even if you ran all the states and did it over a controlled period the other thing is that gross state product numbers are wishing numbers they're estimated numbers too and there have been massive revisions in gross state product estimates in the last five years to the point where in some years Vermont's gross state product the sign even changed from going up to going down going up in a particular year so you know while it's good to look at that as an overall metric that would be a definitive sort of statistical test as to whether minimum wage change was necessarily good or bad for the economy as you get to higher minimum wage changes you would expect there would be some negative impact on gross state product because you would have less economic activity for really if you were to raise minimum wage to $25 an hour tomorrow you would have a negative impact on GSP I don't think any economists would argue that you wouldn't or not a credible economist but when you're in between and when you're close to prevailing wages and things like that it's probably unlikely you'd have a measurable negative impact so does that answer you know what I was curious you know what I haven't seen a studies that are trying to look at impacts are usually looking at sectors that are highly likely to be you know a lot of minimum wage workers yeah be vulnerable and say well has anything happened there and if you don't see it there then you're unlikely to see it elsewhere the fact is too we've lost a lot of the manufacturing firms that rely on low wage labor they've already been out competed by China and other places so those in some ways are the most vulnerable industries that tend to compete with other you know local sort of other local industries are all going to be under the same pressure and a price increase will probably stick for the most part things like export as you were referring to yeah if you're a furniture manufacturer component and you're doing a lot of stuff by hand it's not all mechanized and the sort of thing contract manufacturers would be another category of potential yeah it just depends on yeah are you using low wage when we look at manufacturing in general the companies that are left are super productive they're using a lot of capital their workers are fairly highly paid very few of them hit the minimum wage so I'm going to ask Cynthia a chance to ask you a question I don't understand why you didn't look at regional effects because you talk about 97% 3% percent those might be the odds overall in this state but those are not the odds in Bennington County those are not the odds in the Northeast Kingdom you're talking about losing 200 jobs the first year what 100 of them are in the Northeast Kingdom and 100 of them in Bennington County those are significant job losses I was talking to a single mother last week it wasn't about this it was about the stupid motor vehicle inspections doing something about that she cannot lose at her job if she loses her job her economic life is destroyed and she has to go fully on benefits so I think the way the failure to fully weigh the impact of losing the jobs on the people that lose them the failure to do regional analysis is such a great flaw in your study that it isn't even it's not as useful to me as it could be because you yourself have been showing us the fact that the economic development is localized in this state and the rest of the state has stagnated and the rest of the state is probably where a lot of this impact is going to be and I think that it really just forget about all the ideas about rural economic development because you're doing this and making it harder for the businesses that are there to succeed and function and again I'm not opposed to doing this at some point but you've already operated three times George you want to operate again when there's no emergency I don't think so so the monitoring would be a good thing to do but let's hit the pause button because 200 jobs, 2,000 jobs 1,000 less in the Northeast Kingdom and 1,000 less in Bennington County that's a big deal for mothers and I just find the lack of regional analysis just cripples the usefulness of what you've done here the other comment I have is that when you're looking at increases in income to minimum wage workers do you net out the loss of income from the employed people? Yes we do and let me just say I would be very happy to do some state analysis on this I would if asked to do that that would be really interesting and productive work we don't have the same model at the county level but it's available so we could buy it and develop the same sort of thing we don't have the same level of data detail at the county level but we could maybe do some bridging and stuff and come up with something it would be a it is much more complex to do analysis at the county level than the state level because there is so much less data and it's so much less timely but it doesn't mean it can't be done and it would be great to do it at that level and it would be great to include surrounding states so that we could look at border counties and have models set up like that that's not a cheap exercise but it would be really interesting and we do lots of both city level analyses for others we haven't done minimal wage studies elsewhere but we do lots of other economic analyses at the county level and even some at zip code levels and things like that but you tell us to do that nobody else no I would have been and it would be expensive it's not an easy cheap thing to do but it's certainly doable when we do these sort of things in lots of other areas so give us a green light and we will be happy to do that with regards to this topic regional analysis I was thinking in my head Cynthia was talking about the difference between the similarities in Bennington Brattleboro and Bell's Falls which have a fair amount of retail probably a good lot of minimum wage jobs or at least lower paid jobs versus where there's so few jobs anyway almost all the employment is on the other side of the river that's right so you can do an analysis in my area and find well they much change because people are working in New Hampshire anyway where they pay whatever versus Bell's Falls or Brattleboro in particular where there's something to compare so if you were asked to do a study and there may be good examples in Northeast Kingdom that would be worth comparing to anyway just comment yeah no it's really interesting the variation that occurs all the way up and down the Connecticut river and there's far more commercial interaction there than either the Massachusetts or the New York and the New York border because there are fewer crossings and not the same population centers but the flows come from New Hampshire to Vermont in the southern parts around the Brattleboro area and they go the other direction right over junction to Lebanon Hanover and they also go to New Hampshire in the Colbrook area farther north even though they're small so all these things matter and you know significantly you know you might get with in a period of economic high levels of economic activity and employment rates you might be better able to attract New Hampshire workers if we had something for them to do well there are jobs so there are jobs that are there when you're getting these flows coming across and it's probably having an upward impact on New Hampshire's prevailing wage rate most of those I suspect just to put one more nail in this that are available on the Vermont side of the river in my area they're better than minimum wage anyway yeah they have to and that's the point about the prevailing wage so if you're raising it like if you try to go out now and hire someone who's really going to show up every day and be minimally productive it's hard to find a person you know if you're less than $10 and that's why I say those jobs that are still making below the minimum wage in New Hampshire are people that have been employed a long time and just haven't moved so they haven't raised the stink they haven't tried to change jobs they're not sort of like aggressive in doing that but if you're hiring now at the margin you've got to pay considerably above that to really attract equality thank you well I meant to ask you a really quick question yeah right and now being a surgeon I gave her right back wait first sorry is there any you said that about 70% of the minimum wage workers in your cursory exam examination of New Hampshire women any reason to think Vermont is any different than that well we have all the data and what is it in Vermont I I can look in that but it is I think it's 56 I think it's but in the at the end of the October study there's a chart I think there also depends on if you're choosing if you're going by the current minimum wage or what would be the minimum wage proposed yeah right age variance women working highly educated and head of family I think it was in the 50's like mid 50's but it's significantly lower Cynthia just one quick response when you wait till there's an emergency to operate the outcomes are much worse much worse that's where your metaphor falls down we've just raised it three times if it's a baby that's got to be delivered you've got to do it couple things you the figure you mentioned about 3% possible job less then it's a different number that could be reduction in hours right yeah it could be the sort of an equivalent production in hours that's why it's important to measure hours of work as well as job counts and then there's another factor like let's say some of the employees 20 an older employees 20 employees or whatever and somebody has worked their way up from the minimum wage what it is now 10-15 hours making 13-14 dollars an hour now and as the minimum wage starts to increase if this happened they start to say okay I've got to save money somewhere else so this employee who I was going to give a raise to now I'm going to forgo that raise does that tell us stuff can that happen yeah that does happen there are several things that happen so there are people that are just above the minimum that when the minimum goes up employers will want to keep some spread you know so people that are making 50 cents more than the minimum wage now you know you don't want to like all of a sudden put them at the same level so there's that's called spillover effects and so it's we've used all the literature that's out there on this to try to estimate that and it is a part of the overall impact of it but it does affect workers mostly just above the the loss in hours or wages it's not only minimum wage workers I don't mean to imply that it could be above and it could also be if a company completely closes it's the management and everybody else those all are part of the count it would just be if you concentrated all of those where most of the minimum wage where most of the job losses would occur or the hour losses occur will be most likely to occur among minimum wage jobs because you'll either you know invest more in capital to automate so you can substitute capital for labor you'll do something or you'll try to get by with less labor in different ways and there are ways that firms have done that very creatively but the primary response is a price response people raise prices if you can't and if all your competitors are faced with the same labor problem then your competition is going to raise prices at the same time it's not that that doesn't have any effect on demand it still decreases demand a little bit depending on the industry but it's that that's not huge compared to a competitive loss if you raise a price and your competitor doesn't have to it's really hard to stay in business when somebody can just choose a chance it would be true that some I mean many minimum wage workers are employed by small business right I yeah I don't know that we did a break on this that is something we could do more stuff you don't have it by size of I think we got it in a prior study by size of establishment we didn't run that this time but Deb Brighton did some with census data might have some information on that but we didn't do it this time by size of business they would take into account anything like if you have a small business that's close to the margin like some small businesses are and maybe fold up their business can't just keep up with well that's the sort of thing that you know that follow up studies both survey based and just statistical would be useful to have information on there are sectors where we know sort of averages across a sector that are low margin you know businesses so you could calculate and you also get a share of labor but those vary by individual company too so it's kind of hard to make a blank sorry one last real quick one sorry madam chair you said it would be really expensive to do the Cynthia study well county level call it the Cynthia study when you're when you go to do at town level too when you say when you say really expensive can you give me a ballpark we're talking hundreds of thousands of dollars I'm not asking for an exact number obviously it would be in six figures but it wouldn't I don't think would be high six figures but it would it might be 150 to $200,000 or something you have the software then and you have that that could be used again we'd have to collect oh yeah once we develop it would it have been less expensive have we done this as part of this current study and sure just because we're into it and doing it all at the same time and then you can design it differently so you know you're doing it at the county level so everything you're doing is collecting and measuring stuff at that level yeah thanks we've never in the past been asked to do that either but it's a real you know it's a point if you had been asked to do that would you be better able to answer George's question about whether this is the time to operate we'd have more granularity about it and you and it might inform if you were going to do something that had a differential wage thing like some states have done it would give you a a better basis for doing that and choosing who's in and who's out and where you draw the lines about a differential wage and it would just be more information about you know the whole patient I don't think you should be telling us anyway what we should do I know but I'm not looking for that but I meant it was actually a serious question but I you know part of what I struggle with here is where you started we have an awful lot of data but we don't quantify the social benefit of raising wage because we can't really that there's something there is some for some of us anyway there's a benefit that can't be measured and can't be quantified and so there's a lot more data I'm trying to understand whether that helps us make that weigh those two things in what way and you can't answer the question if we wanted to do a differential wage it would give us some information on how to do that you guys are the surgeons and I'm not taking the scalp no matter what but I can be one of those machines that's telling you whether the heart's beating or not and how fast and stuff like that and if you say if we had a better machine it could tell you more about how it's beating in the leg and the arm and whatever you know more information you know always if we operate we might kill the patient what's the marginal cost of all of those we're usually alright but I mean just so it's just more information about what's happening in the process and it's not like saying after the fact oh the heart rate went way down right too bad way to know that at the time I have a question about federal tax changes and the amount of the lower taxes that Vermont individuals and Vermont businesses are going to be paying because of the federal tax changes those factor into your analysis of minimum wage oh no that happened way after minimum wage analysis would your study look differently now that those changes have gone into effect without there are a lot of corners to this I don't think I could say just off the top of my head if you'd like me to think about that more thoroughly there's just a lot of levels of that both on the corporate side some of which are still being worked out and the personal income side and you'd have to tell me what the current law version is well I'm talking about the federal changes I know but the federal changes that pass through the state the federal changes that affect the taxes that are the federal taxes that are paid by businesses in Vermont so I mean when you said the federal changes they're things that flow to the state you also have to take not talking about those at the moment changes at the federal level so you're getting lower tax payments that would be but it didn't really affect the low end so much so does it affect the businesses in the state yeah you're going to have lower business taxes and corporate taxes but then the shareholders the benefit to shareholders in terms of wage analysis it's not a class that's heavily affected does it give businesses more profit yeah but it gives all of them more profit so their competitors are in the same boat so you still have a competitor variation there are a lot of wrinkles to it that's that's like a really quick answer but it's a much more in-depth topic if you wanted me to think through all the possible areas where things are significant and what not it would take take longer than have something more thoughtful I don't know where you have to be next I'm not sure either but okay, okay, thank you thanks very much thank you if you don't mind we're going to take a for some of your questions from Pat Barowitz good morning, Matthew Barowitz I'm the second labor market information chief for the Vermont Department of Labor thank you so much for having me this morning certainly all primed and ready to go on the topic of minimum wage so I will certainly allow this conversation to go in whatever direction you think is appropriate I've already heard more questions than what I would consider to be important questions being asked than I have over the duration of this conversation the Vermont Department of Labor I was assigned as the Vermont Department of Labor staff person for the summer study committee unfortunately I didn't have the opportunity to testify because they had a full schedule but I was an observer of that discussion and did see the work product that was created and one of the things that struck me the most about that conversation and the subsequent conversations and related to minimum wage many conversations is the question that continues to be asked is what will happen what will happen if we do this I've already heard in this room today more people ask the question I wanted to ask which is what has happened has been asked previously this question of what has happened I think is as important because there is no disagreement the one thing there is no disagreement is that we are all looking for the best way to assist Vermonters whatever their income goals are whatever their life circumstances are is figuring out the best way to assist Vermonters to become self-sufficient but the conversation about what will happen and has not has been as dominated versus what has happened and so unfortunately while I can provide the information that I have available to me and some of the things that I've been able to look at I'm probably going to provide more questions than I am answers so as it relates to traditional economic theory one of the things that first out of the gate anyone would say you raise minimum wage labor force participation rate will increase that has not happened labor force participation rate even holding consistent for age groups has held flat at best and declined for many so already there is a question and I think the way Mr. Kavett characterised the Washington studies you could almost characterise 100 years of minimum wage research many people start out with an objective they research it and it matches their objective other people look at a narrow swath and they come with inconclusive results that there is no question in economics yet there is no clear answer which gives me another reason to draw pause of the minimum wage if you look at case studies across the country which many people do you see no correlation between the minimum wage and wage inequality the minimum wage and poverty and in fact our record on poverty last year went up even though the minimum wage went up income inequality were middle of the path and the upper tens for our minimum wage you look at states across the nation they run the gamut similar to the GDP question they run the gamut between high levels of poverty and low levels of poverty high levels of wage inequality so it goes back again to the question of what is the purpose of the minimum wage and what is the purpose that we are trying to what problem are we trying to solve our wolf quotes a statistic that is a big part of this discussion when we are talking about people of limited economic means 50% of people in poverty do not have wage income so if you are looking at the population of people below the federal poverty line minimum wage is only going to address half of them anyway and so from the department standpoint where we have a charge to work with all employers all Vermonters and try to improve the outcome for all of them there is a big part of the population that will not even be assisted with the increase in the minimum wage so once we separate that out then we can talk about all those that may be impacted now we can get into the discussion of where you had much of the discussion with Tom Cadet and we can continue the 50% without wage income how do they survive that is a great question much of it is government payments so they are on some sort of assistance or they are barely surviving at all or it could be independent wealth or it could be wealth that is generated outside of wage income it could be self-employed self-employed right, could be self-employed because it is the way it is filed but it is not wage income ok, thank you so and what I find also interesting is that this is a very top confusing and nuanced conversation and so every time you hear the word wage I always want to stop the question and say are you referring to hourly wage or annual wage because there is pretty much universal agreement I don't think there is any disagreement that hourly wage will increase across the Vermont economy if you increase the minimum wage what I don't hear a lot of discussion or clarification on is when people talk about rising wages are we talking about annual wages so with the Vermont Department of Labor we have access and information to a lot of data that gets collected and it is always best if you can have multiple sources pointing in the same direction and as it relates to hours worked we have two data sources coming from two different sources two data sources coming from and pointing to the same conclusion which is that hours have decreased in the Vermont economy so for example if we ask Vermont employers in the private sector how have hours changed hours worked changed in the private sector since 2008 they have reported that they have gone down about 3% so if you take into factor hourly wage increases the hourly increases have been actually eroded by decreases in wages or hours worked and when we look at that data unfortunately we can't break it down into types of workers but I think it's a reasonable assumption to assume that the people who are getting decreased wages are those at the lowest level of the skill level decreased hours excuse me that yes I think it's reasonable to assume it's not the people that are making an hourly rate but working full time as a professional it is people more on the margins because there's a question regarding large versus small employers and there are large employers that are equipped to handle these types of things shifts in technology, how they target so large stores now actually buy software to help them maximize when their labor is on shifts so maybe they used to have more shifts now they have a program to say we only need you for two and a half hours and even big box retails are even going to more of an on-call nature which is again contracting the number of hours worked and I apologize if I'm talking so fast I've been sitting in the corner and boy my mind has been reeling about every thoughts to say so I didn't so slow me down so I may have missed it but the 2,000 16 so this is what employers are telling us, employers are saying in the average hours the average number of hours worked in a week has gone down over that period of time despite the economic recovery and the reasons