Good morning. It's good to see you. So, Sever, you have about 20 minutes. We know you want to talk about human wage, but we're going to talk about the minimum wage itself as well. The floors, all yours were expecting a couple of water members to drift in. So, you have to get started right now. Okay. Well, thank you so much for having me. My name is Saru and I'm sorry I'm a little bit sick so hopefully you can hear me okay. We have it at our top volume and you're good. Okay great. So I am a professor at the University of California, Berkeley in the Golden School of Public Policy. I am also the president and co-founder of the Restaurant Opportunities Centers United, a national organization of 130,000 restaurant workers. 770 restaurant companies ranging from very large chains to small mom and pop restaurants all over the country and about 30,000 consumer members. So we are workers, employers and consumers working together for better wages and working conditions in the industry. I founded the organization just after 9-11 together with workers in New York. And 17 years later we've grown and published about 55 reports and three books on the MSGIC for the medical students on the table. Yes, fork is right here. And we've done a lot of different things including open and run our own restaurants and train thousands of workers in those restaurants to move up the ladder and deliver the wage job. But we've also done a ton of research. And our research shows that right now we are, as the restaurant industry, both the nation's largest and fastest growing industry with almost 14 million workers. And by far one of the largest and fastest growing industries in Vermont. We are one in 11 American workers. We're currently in one industry, the restaurant industry. And one in two Americans and one in two people in Vermont has worked in the restaurant industry at some point in their lifetime. And yet despite the industry's size and its growth, it continues to be the absolute bottom of the barrel lowest paying employer in the United States. And in Vermont every year the Department of Labor, at least until I wanted to, the Web of Functioning Department of Labor put out a list of the 10 lowest paying jobs. Every year we have been the seven lowest of the 10 lowest paying jobs. And also seven lowest paying jobs at the physical department if people don't understand. Four of the seven lowest paying occupations in the United States are tips, occupations, including servers and buffers. And that is because for the most part tips workers work in very casual restaurants and diners, making very little money. So the reason that you've got one of the largest and fastest growing industries in America with the lowest paying wages of any industry really is the money power and influence of a trade lobby called the National Restaurant Association, we call it the other NRA. It represents the chains, the IHOP, the Applebee, the Olive Garden. And in doing research for that book of mine that's sitting in front of you, it's uncovered that in fact this minimum wage is a legacy of slavery. And that in fact this trade lobby, the other NRA, has been around in various forms for 150 years. That in fact tipping originated in pseudo-Europe. It was a fact in which aristocrats and nobles gave something extra or a bonus to serve for vassals that all went on top of a wage. When the idea came to the state in the 1850s and 1860s it was rich Americans traveling to Europe coming back and show off that they knew the rules of Europe. And it was right around the time of emancipation. And the restaurant lobbies, the man of the right to hire new lease employees at emancipation, pay them nothing since they had not been paid anything for generations and have them live entirely on tip, which was the original concept of tipping. Tipping was always something on top of the wage. When it came to the state in terms of slavery it became wage replacement. That idea of tip as wage replacement became law in 1938 as part of the New Deal. When everybody got the right to minimum wage, except of course a couple of categories of workers of color, farm workers, domestic workers, and of course tip workers. We're left behind at $0 an hour as long as tips brought them to the full minimum wage. We went from $0 in 1938 to 80 years later $2 and 13 cents at the federal level and of course something over four in Vermont. A $4 increase in Vermont over 80 years, a $2 increase federally over 80 years. Today 43 states follow this legacy of slavery with a sub minimum wage for tips workers and 70% of tips workers nationally are women. It's actually higher in Vermont. It is actually almost 80% of tips workers and servers in Vermont that are women. These are women who suffer from three times the poverty rate of the rest of the U.S. workforce in Vermont. Tip workers and servers suffer from 3.3 times the poverty rate of the rest of the Vermont workforce. The poverty rate among tip workers and servers is actually higher in Vermont than it is in the rest of the country. Tip workers also use a food stamp at double the rate of the rest of the U.S. workforce. And so regardless of how you want to argue how tips are calculated and whether they're reported, the fact that this population uses food stamps at double the rate of the rest of the U.S. workforce given how difficult it is to get food stamps and how stigmatized they are shows that this is a population that is not actually coasting or doing really well with a lot of money and tips. First of all, you've got a population of women that our research and many other eight of them show has the highest rates of sexual harassment of any industry in the United States because when you get a wage of $2, $3 or $4 as it is in Vermont, your wage is so low it goes entirely to taxes.  You must tolerate all kinds of inappropriate customer behavior to feed your family because of course customers are paying your bills, not your employer. Fortunately, there are seven states that have gotten rid of this system entirely. California, Oregon, Washington, Nevada, Minnesota, Montana, and Alaska all require the industry to pay a full minimum wage to the trip on top. Our statistical regression analysis shows that these seven states have higher restaurant sales per capita, higher job growth in the restaurant industry, higher job growth among tips workers and servers. The same or higher rates of tipping Alaska actually have the highest rates of tipping of any state in the United States much higher than Vermont. The tipping remains the same or equal. I think one of the most important data points for anybody that cares about equity is that we see one half the rate of sexual harassment in these seven states in the restaurant industry as we do in Vermont. And that is for a couple of reasons. First, it turns out when you pay a woman a full wage of every other person in every other industry, she doesn't have to lie entirely on the kindness of strangers, on the bias of strangers to feed her family. She does get tips if she can reject harassment. She doesn't need to tolerate harassment in order to pay her bills or feed her family at night. And these are indeed parents, almost a third of Vermont's six workers and servers are mothers. Their median age is around in the mid-30s. You have got a population of parents that is trying to feed their families in tips. And in these seven states, to feed their families in tips, they are not so entirely dependent on these tips. They actually get a paycheck that they can count on their boss to feed their family. And I know for Senator Stratkin, I'm sorry, this is just moving more about how tips are shared in these seven states. Well, it has been custom in practice for almost 40 years in these seven states that because everybody gets a minimum wage front and back, tips are shared between front and back of house workers. That was custom in practice for 40 years in April of last year, 2018. My organization, together with the National Employment Law Project, led a bipartisan bill in the U.S. Congress, in this Congress, actually winning law that makes it now legal for any restaurant in the country that does pay what we call one-fare wage, a full minimum wage to front and back of house workers, to servers, bartenders, and back of house, making it legal for these restaurants to share tips between all workers in the restaurant. This practice of sharing tips between front and back dramatically reduces sexual harassment because it spreads the incentive of the tip to all workers. And then in the back, largely the industry is very segregated by gender and race. And in our case, the front of the house that largely relies on tips is mostly female. The back of house is not through spreading the incentive among both men and women in dramatically reducing the power dynamics between men and women and the sexual harassment that exists between men and women in the kitchen and the dining room staff. The sharing of tips is something that our 770 restaurant companies that agree with us on this issue have long thought for, have long asked for, is that they'd be able to share tips if they'd be able to put minimum wage. And we made that law, the federal law, in April 2018. So if these seven states have been able to do this so successfully, require this industry to pay the full minimum wage at every other minimum wage, we said, like every other industry, I'm sorry, we said, well, if these seven states can do it, certainly all 50 states and Congress can do this, require this industry to pay as the full minimum wage. We've been working on this issue for several years, and last year, about an enormous uplifts has been to and turns up. There were 400 media outlets that published our research, including The Hard Times, which did a huge cover story on the issue and our research, The Washington Post, and it was featured on 50 Minutes, 2020, and Bill Maher. And as a result of all of that, we are seeing this year 18 states, introduced legislation to fully eliminate the lower wage requirements as well as Congress. This bill has been introduced in Congress every single year. The bill is to raise the minimum wage for 15 and fully eliminate the lower wage for tip workers. The Democrats that lead the bill in Congress have supported full elimination of the lower wage for tip workers for the last several years. And this year, they are actually moving very quickly to pass it in the first 100 days in the House. And so this issue will pass in the House of Representatives at the federal level this year within the first 100 days of Congress. And it is likely to pass in several other states. It's moving quite fast to New York and Illinois. And as I said, it's been moving and introducing another 16 states across the country. So there's tremendous momentum to eliminate the sluggishist slavery and reduce sexual harassment. And it couldn't come fast enough because in December, something very, very important happened that everybody in the room really needs to know about. But unfortunately, very few people do know about, which is that President Trump and the Trump Department of Labor in December announced that they were rescinding all regulations and enforcement surrounding the two-tiered wage system. What does that mean? Until December, there were strict rules that said you could only pay sub-minimum wage to tip workers, that lower minimum wage. If those workers interacted with customers 80% of the time, it was called the 80-20 rule. And that is because if you don't interact with customers, you do not have the opportunity to earn tips, and therefore don't have the opportunity to ensure that tips bring you to the full minimum wage. Well, that rule was completely rescinded by the federal government in December. They also rescinded all enforcement, all federal enforcement, of only rules surrounding the two-tiered wage system. So many of you know, in federal law, it has been since 1938, that people shouldn't pay the sub-minimum wage as long as tips bring them to the full minimum wage. All federal enforcement of employers ensuring that tips bring them to the full minimum wage is gone. And immediately after that rule and all federal enforcement was rescinded, I have announced to all of these workers that they would all be receiving a sub-minimum wage in every state that allows for a sub-minimum wage, at least the 46 states that are receiving their months, regardless of what tasks they would do. So now workers who sold machines or bought black hair or are doing things that have nothing to do with interacting with customers or getting tips are paying the sub-minimum wage because there is no longer any incentive from the federal government to actually pay anybody the full minimum wage. If you, as Vermont, proceed to create or maintain a six-year wage system, you are effectively actually only passing a lower minimum wage. So for example, you decide to go to $15 and leave tips workers behind at 50%, which would be $7.50. You would be effectively passing a minimum wage in Vermont of $7.50 because there is no incentive whatsoever, any one from the federal government to actually have employers pay full minimum wage. There is one more reason to really consider this very strongly in Vermont and when I say consider this, I mean consider an amendment that would not only have everybody else in the state go to $15 and tips workers as well. You're proposing that it happen over a very slow time period. You'll be asking restaurants to go from 4 or 5 or 6 to 15 overnight. It would be at most a dollar or a little over a dollar a year. That is how it's being proposed and moved in every other state and in Congress. So that is a proposal. There's another reason to strongly consider that in Vermont. Vermont has a very strong business fairness law and we've been working as national attorneys at the AGU and other folks at the national level to examine this law and see that there's a real legal argument saying that it was completely unfair to ask plenty of very small businesses and businesses in Vermont to phase up to $15 and allow restaurants including very large multinational corporations like Denny's and IHOP and Aberdeen to continue to pay a sub-minimum wage when small businesses like hardware stores and small flower shops and other retail stores in Vermont are going to be asked to go to $15. It's unfair to other businesses to ask them to go to $15 and that is one industry that's an assumption simply because of a historical budget blazer and because of the politics of the lobbying of the restaurant association. So we would strongly argue that there's plenty of data that we provide Vermont specific data that shows in order to list tens of over at this point about 12,000 women in Vermont out of poverty in order to cut sexual harassment in half in order to follow what most states are moving towards and the House of Representatives are moving towards in order to correct the horrible rules and unlawful decision that was just enforced by the Trump Department of Labor this should be an amendment to include tips workers in the overall minimum wage increase that you are putting forward. Thank you. That's perfect timing. Thank you. We've got a few more minutes. When I started out I asked you if you would talk about the overall wage in the minimum wage to $15 and not exclusively talk about tip wages. Do you have anything to add? Mr. Speaker, I didn't hear you say that. I did not hear you say that. Okay. Do you have anything to say about raising the minimum wage to $15? Absolutely. The rest of the industry, as I said, is the largest and fastest growing industry in the United States and the lowest paying. They are the largest workforce of minimum wage workers in the United States. And so I'm sure you've heard and testimony so many other good reasons to raise the overall minimum wage. In our industry it's absolutely imperative for a couple of reasons. We must raise the overall minimum wage to ensure that you don't have a mass proliferation of the absolute lowest paying jobs in the country taking up domination of one in three working Americans working full time and living in poverty to almost one in two. We are getting very close to almost one in two working Americans working full time and living in poverty. And that increase from one in three to one in two is almost entirely the explosive growth of the lowest wage sector in the United States, mainly the restaurant industry. Our industry needs this increase. We are going to be the worst labor shortage in the history of the industry in Vermont and in every state in the United States. And that is largely because workers cannot afford to live on these wages anymore. And so to support the very industry itself we need to see all wages drop for workers in Vermont. The 15th is the minimum that it can go to in order for workers to survive. But that means all workers including tipped workers in this industry. A couple more questions. Very much. Are back-of-the-house people generally in the restaurant industry considered tipped employees? They are not. They are non-tipped employees.  But what I'm trying to explain is what happened in December with the Trump Department of Education. I was going to ask that question next because I didn't fully understand that that happened. It sounds like it's exacerbating the problem. So could you just revisit that December change? Sure. So in December, and I can send you a legal memo on this. That would be helpful. Yes. Yes. I did send it earlier, but I'll record it. In December, President Trump rescinded what's known as the 80-20 rule. It's a rule that says if you are going to be paid to come in with concern. I'm just going to move out of the plant in this one. So, Amy? Yes. Lovely. In December, until December, there was a rule called the 80-20 rule that said that the only workers that could be paid the sub-minimum wage are those that interact with customers 80% of the time. That was to ensure that they would have the opportunity to earn the tips that they need to actually get them to the full minimum wage. By the way, prior to December, the Obama Department of Labor had already done a very thorough investigation of the issue and found an 84% violation of the rules surrounding the shipment of the two-tiered grade system. So, let me be clear. When we have full enforcement, one of the best administration's enforcement of any administration we've seen in the last 50 years, and we have full enforcement of this issue, we saw an 84% violation rate with regard to restaurants following the rules surrounding the two-tiered grade system. But at least there were rules and there were some enforcement. In December, all of those rules and enforcement were rescinded. In December, the 80-20 rule that those workers who get the sub-minimum wage must interact with customers 80% of the time was rescinded. At this point, to answer your question, that means the only incentive for employers to pay the full minimum wage to workers in restaurants is market forces. Market forces prevent employers from paying kitchen staff the sub-minimum wage because it's very hard to find kitchen staff. Market forces keep them at a higher minimum wage, but there's no legal enforcement anymore of restaurants actually having to pay the full minimum wage from coming from the federal government. There are some state laws in Vermont that protect these workers, but the 80-20 rule is not among them. There is no state law that protects workers saying that they must interact with customers 80% of the time. Legally, legally, there is no actual incentive for restaurants to pay anybody the full minimum wage. But market forces prevent restaurants from paying the back of house anything less than the full minimum wage. They do not prevent them from getting tips workers to do lots of work at its non-tips. So a very good example of this is IHOP, which has already moved to having workers doing non-tips work, adding up tables, stocking glassware, folding napkins, work that does not get some tips and still paying on the sub-minimum wage. Does that answer your question? A little bit. So we have evidence with IHOP that they're paying back-of-the-house people the sub-minimum wage? Not back-of-house. That's what I was saying. Back-of-house, there are market forces that prevent... Well, people who are folding, the people you described folding napkins. So what we call front-of-house workers, they could be doctors, servers, runners, anybody, but they could be doing non-tips work, not receiving tips, and still receive the sub-minimum wage. Right, they could. Do you have reports and studies that show that's what IHOP is doing? I mean, this real change just happened in December, so what we do have is workers coming to us and telling us IHOP is telling us this. Okay. So we can share that information, create a memo for you, share we purchased from workers, this is what we heard. Okay. But it's in about a month. In terms of Vermont law, my understanding is that... I speak up in my comment. My understanding is that the law says if you don't make up the full minimum wage and the employer pays a tip minimum wage of half, it's the employer's duty to make up the difference. So maybe there are no regulations or implementing procedures that help guarantee that. But are you aware of in Vermont, do we have any studies or information that people are not getting what the law requires? Yes. So first of all, that's actually federal law. It's not just state law. It's federal law. It's in the state law as well. It is state law as well. But actually our research and data shows that there have been far more resources in terms of federal enforcement until December. After December, all federal enforcement of that rule is gone. And so the only protection for workers at this time is any state enforcement of that rule, which has not been enough. In fact, with the combination of state and federal enforcement, what I told you is that there was an 84% violation rate of this rule. Right. So with now with the precision of all federal enforcement, it's going to be an even higher violation rate. But the problem is that even, so we saw a 16% compliance rate with the best enforcement in the world. But even if we had a 100% compliance rate, we still have an almost 80% female population having to tolerate all kinds of inappropriate customer behavior to feed their family and kids. And yes, we do have information on Vermont workers experiencing wage theft and tips theft and sexual harassment. We're actually gathering much more of that in the next couple of weeks. We're collecting surveys of workers in the state on these issues. But one of the sources of data that shows that we know that this is not true is that we do have the percentage of workers. We do have a substantial percentage of workers in government data that they're earning less than the minimum wage in the restaurant industry. And those are workers who's tips do not bring them to the full minimum wage. One final question and then maybe there's a couple from the committee. We talk a lot about restaurant workers getting some minimum. What is the situation with hospitality workers chambermaids? I know they sometimes not as much as restaurant people will get tips, but are they, is the hospitality industry in general paying their chambermaids to some minimum or are they paying them to full minimum? I'm so glad you asked that because in Vermont you've got a little over 10,000 workers in the restaurant industry that are tips that you've got a total of over 12,000 tips workers. The majority are of course in the restaurant industry and they're not just servers and bartenders, they're buskers and runners and delivery workers. But non-tips workers who are not, I mean sorry, tips workers who are not in the restaurant industry include nail salon, car wash, airport valets, hairdressers. They do not generally include chambermaids in hotels, generally chambermaids in hotels that pay their full minimum wage to tips on top because that sector is more heavily unionized nationally and they've created a market standard that actually requires what the wage would always intended to be for tips workers, a full wage of tips on top. But for these other vulnerable workers, restaurant workers, nail salon, car wash, hairdressers, airport valets, they've been excluded from the minimum wage entirely. So it just shows that the hotel industry can do it, certainly they have tips workers but they're paying the full minimum wage. There's just no reason why restaurants stand as well. And again, nobody's asking them to do that overnight. The proposal would be to phase them in over a long period of time to get to the full minimum wage. What are the phased periods in the states that have recently passed this? You know, they've been anywhere from eight, nine, 10, sometimes 10 years. Generally what we recommend is somewhere from a dollar to a dollar 50 increase per year, just as you're doing for the overall minimum wage, the same, you know, slow methodical process for tips workers. Anybody else have any questions? I do. So it's lovely to see you again. The question I have for you is, is one that I've actually gotten a couple of people have asked me as we talk about this. What is the compliance rate on full reporting of tips? Because, you know, it's, I'm just curious if you know what that is. Yeah. I mean, it's very hard to know. Yeah. With regard to that, the data that, you know, oftentimes the opposition says these workers, they make a lot more than government because the tips are not reported. The data that I'm referring to is actually not worker-reported data. It is OES, occupational employment statistics from the Bureau of Labor Statistics of the Department of Labor Actions. Employer-reported payroll data. Employer-reported payroll data. So either if the rest on association or the chamber is saying, well, this government data is not true. Right. It's under reporting. Then either they're lying to the government when they report their payroll data or they're not showing the truth now when they're saying that's not the right data. You know, the best data that we have is employer-reported payroll data with regard to art, you know, tips workers, tips and wages. That's one thing I would say. The other thing I would say is even if you want to argue how much tips workers make in Vermont and say we can't say because they don't report their tips and employers maybe are lying when they report payroll data, even if you want to say all of that, part of this undeniable is the use of food stamps and public assistance.    The fact that servers in Vermont are 80% female, almost a third mom use food stamps at double the rate of the rest of the US workforce should tell us something regardless of what you want to say about how much they're actually earning. Right. And do you have any Vermont-specific data on how many people are working in and I don't even know what the fine line is here between a restaurant where you actually get fairly good tips and low-cost diners where you're not going to make as much in tips because they're, you know, as we were doing this in the last couple of years, you know, you sort of anecdotally ask people and people at J. Morgan's across the street that do incredibly well in tips and it's not an issue for them. It's an issue in large measure for... Do you have a tipping point, as it were, for a meal cost below which tips really don't necessarily always bring it up? Right. You know, the tipping point in other places is actually, let me say, anything less than 35 or 40 in a place like New York that's really casual, but it's going to be very different for 35 or 40 meaning that's a full meal ticket for a customer including meals, drinks, tasks, all of that. Got it. But that is very different for Vermont and actually very different depending on the region of Vermont. I will tell you the vast majority of workers in Vermont and I can't even share the government data are do work in casual restaurants, not fine dining. I mean, that is true across the country. Fine dining is a very small river of the overall industry. Less than 15 or 20% of all jobs are in fine dining. The vast majority of workers work in... I have pennies after these both side diners, small mom-and-pop restaurants. And again, that is what the median wages are showing us is that we've got workers who are living in poverty. The other thing I will say is, though, even for that server that's making a lot of money at Shade, Morgan, I'm sorry, I didn't catch the name. That is very unpredictable and seasonal and it can also be very, very variable. We've had a number of workers in fine dining restaurants tell us, you know, we live for a particular part of the year and the rest of the year is just, it's so variable. I might earn $0 tonight or $200 tomorrow. There's lots of problems, even for those workers. Not only can they not save, nor can they predict, you know, can they make the rent this month? If there's a blizzard or some kind of other weather problem, their care is there. They might go to work, but very few customers will show up and so they'll make far less than this. They cannot plan. Worst of all, we find it definitely impacts their ability to upset it by home. You know, they have social security. I mean, if your... your on-the-record wage forever has been four or five dollars, what do you get in terms of, has that social security at the end of your life? Almost nothing. So there are a number of problems, even for those workers, because of the unpredictability of income every hundred and seven months. Thank you, Sarah.  We have a whole series of witnesses. Thank you. I really appreciate your testify and by Skype and the depth of your knowledge. Thank you. Thanks a lot. See you soon, we hope. Great to overcome that. Okay, Mark Fryer. I think we're going to try... Do you need some help moving this out of the room? Um... Hi. Okay. Good idea. Really good idea. I apologize I didn't get a chance to collate everything out, but there's three different... ...artists.  Well, hold out there. It's fine. Take one. So, yeah, do you want that? Let me know. Should I just get into it or pass it out or do you want your weight? I will get into the numbers really until halfway through anyways, but I did break something. Why don't you just go for it? Cheryl, kind of like is collating. I've been here before and I appreciate being invited back to talk about my stance and what I'm seeing in the industry. My name is Mark Fryer. I own the Reservoir restaurant, which opened in 2009. I opened the THENCH restaurant in Stowe in 2014 and I, in 2017, opened Tracy Meagos and the Rest of Nail stage in Stowe. I'm also a select board member in Waterbury and I sit on the board of the Stowe Area Association and also the Waterbury Area Development Committee. It's difficult to necessarily estimate, but I have approximately at any one time around 150 employees and that's a mixture of full-time and part-time. Knowing that minimum wage is being discussed and the different options surrounding it. My goal would be to raise minimum wage to a livable wage, decouple tipped wage, and increase compliance requirements and enforcement and I'll explain why. Mainly it's to protect the server and bartender wages that I know that my employees currently receive and also knowing that I represent a large majority of the industry in the areas that I serve. Many of my employees earn very livable wages well in access to the current goal of $15 an hour. Many are parents, homeowners, and female as stated before. Most of what I'm going to talk about is tipped wage, which a lot of what was just discussed, there are elements of it that I believe are true, but I disagree with a lot of it and I don't think the data is being presented personally and fairly, partially because we're talking about Vermont. My business is in Vermont. I've been in business in the restaurant industry for about 10 years in total with all of them, close to 15. Who's asking to eliminate tipping? Is it the servers or restaurant owners in Vermont? I think as a business owner I'd probably make more money and I think that's why many are quiet. I think there's a model that is happening and I'm surprised even here in the previous testimony of this idea that tips would ever be shared to the back of the house. The models that have gone to a full wage, the restaurants now are charging a service charge sometimes up to the 20%. It looks on your receipt as basically a forced tip, but that's not a tip. That's something that the owner can take and decide how to disperse the money. It changes it. And I'll show you why, when you get into the income from my employees, why that scares me. Why decouple? By coupling tip wages we currently do, all servers, no matter what their final take home gross wages, receives an increase every year to their non-tipped wage base. The law currently states that anyone making less than full minimum wage after tips are compensated by their employer to at least match current non-tipped wage. Why would we have a law that gives an automatic raise to employees that are well above minimum wage, in my case, over $20 an hour when they're not asking for it and it's not working as a real minimum wage because it's increasing their wages. By coupling your inflating in an entire industry, which is creating an additional financial burden most likely this was not on many employers' radars because years ago it wasn't a big number but as we talked about going to $15 an increase, I show here one of the restaurants had 18,000 hours of tipped labor in 2018. A single dollar increase is about $18,000 in cost to an employer, which we most likely would then increase prices which would increase tips. That $5 to $15 which would be $10 an hour I used in 2016 just for easy numbers would be an increase of almost $200,000 in an additional labor cost currently wiping out pretty much our profits. This does not include the cost of the labor for the back of the house or what we would expect of the cost of goods increase I've testified before that I think there's a big trend which I love which is trying to buy local in restaurants but when those businesses that we're buying from whether it's a brewery or a food provider have increased costs, they're most likely going to raise their prices to adjust accordingly and that most likely would mean that we need to raise prices to adjust for the cost of goods without necessarily making any more money. Work to increase the minimum I believe that we should definitely be working towards increasing the minimum wage. The back of the house discrepancy in front of houses is huge and you'll see in a minute how large that is. Minimum wage increases cost of goods to go increase restaurants most likely raise. Tipped employees should expect to see an increase as tips or percentage or price so we need to raise our menu prices. Most likely tips will see an increase because they tend to typically see the same percentage so you would expect that front of house workers as we would be making adjustments for minimum wage increases for our increased costs in the back of the house and our cost of goods you would expect that front of house workers would make more because we would have to take price. I read through some of the documentation and addressing some of the things that I just heard from the previous testifying poverty. First of all I would be interested to understand if it's true in Vermont for restaurant workers if the state focused on compliance and raising non-tipped minimum wage to a livable wage why would we mess with the wages I'm going to present that are well above the short term goals. One of the things I noticed when I was putting together one of the things I noticed when I was putting together the data for my restaurants for my front of house workers I noticed that you don't report hours at W2 it says how much you made gross and that it breaks it down to your base wage and tips it doesn't say hours you can't even calculate hourly wage from that data so you would have to go to a restaurant and get that data and difficulty of compliance is this a problem in Vermont why could we require employers to state real hourly wages on pay stuffs clearly showing final take home wage include minimum wage and a phone number to complain to the state discreetly rooms and meals are supplying millions of dollars and revenue to the state but we put some of that money towards policing policy there was another mention of lawsuits I asked how many have there been in Vermont I've never heard of one personally an employer not I'm not concerned a couple of bad apples uprooting an industry that's created thousands of livable wage jobs and attract young employers the 80-20 rule again this is a problem in Vermont have we heard have we heard enough to say that employees think that this is a problem I think there's a there is an expectation that there's a certain amount of work that's done prior to you opening the restaurant and even while you're open there's works of folding glassware or I mean folding napkins or cleaning glassware I think there's a certain expectation for the job but as you'll see wages are still it's not a large part hourly in terms of the hours that they do it but it's a I don't know how you would do it otherwise sometimes it's in the middle of the shift would that require you to clock out, clock in I don't really understand how it would work in terms of any yeah basically that was saying it's no longer being enforced or in fact before it used to say before you could qualify a worker for for a tip minimum wage you have to you had to have 80% of your time had to be interact with the customer I believe is what I understand it so it would allow you to tip into the kitchen because they're not interacting with the customer 80% of their time probably the most experienced waiter doesn't do that that brings stuff back and forth in a few seconds but that's part of interacting if you're bringing in their meal yeah I would argue that it's that's one table then they go over to another table they're ringing in the I think that's all part of it you have to go and ring in the order I mean that's all part of that job I wouldn't say that that doesn't necessarily fall under so but would you say in fairness that most restaurant tours like yourself if the person is in your mind a waiter and that's what they do in certain tables you would think about the 8020 so that's a waiter they get to look for the wage yeah I think the only time that maybe we think about it is how much we might ask of the server to do things maybe before we open our at the end of the night there's certain parts of picking up the restaurant clearing tables and that kind of stuff so you know we we consciously are thinking of that as there are times that we bring in how we have cleaning crews that come in and clean separately from the servers and that kind of stuff that I think certain restaurants have pushed the limits on how much they ask the servers to do do you have any people in your place where you some of their hours are at minimum wage some of their hours are at tip minimum wage not for servers unless they take a role that's not a server role they get minimum wage so like a food runner gets a minimum wage plus tips but there's still a minimum wage because we couldn't personally we wouldn't want to try to argue the 8020 role on it are your tips cool? no we don't pull tips yeah so basically for tip pulling plenty of restaurants do it we don't but there are clear roles that need to be followed one of which is that each server is supposed to get 85% of the tips they received back so there's a certain percentage of that so you can take that money and give it to the auxiliary you know support staff food runners drink runners but again could we do this through more audits and compliance and certainly upend what's happening in Vermont sexual harassment I think you had asked if there are specific numbers on to Vermont I have plenty of females that work for me in the front of house and I don't think they do it because they don't they're putting themselves in a situation that they're being harassed I think forever have you actually surveyed them in an anonymous I think you actually know that we've had harassment problems but sometimes it's not necessarily has to do with tipping at all I think it's literally just males that are mean just ugly behavior yeah ugly behavior right and we as an owner and manager I would think that my employees have an expectation that we would address that professionally quickly and appropriately and from a business standpoint I think that the era of comedies whatever I don't know whatever happened in the past I don't believe that these are jobs that are putting females in positions that they aren't making solid wages but also I don't feel like they're being put in a situation where they feel like they have to overly perform as a female to make these wages I think it's known that I have plenty of employees that have children that are single moms and own homes they do these jobs because they can make a significant amount of money in a short period of time and get home to their families and I'll show you that I think we should go to that right now anyways because I'm about to talk about the numbers so I gave you an appendix which shows the three restaurants that I have told it's also possible that they are putting up with a whole lot because they know they have to put up with a whole lot and they may not feel comfortable talking to you about that so I just want to like I understand what you're saying and so it is I don't know if you actually do and so because your testimony is leading you to believe that because they haven't come to you personally they might not be dealing with on a regular basis as someone who worked as a cocktail waitress who worked as a busser who worked in front of the house I can tell you because that was just part of the deal so I just need to bring it into the conversation and I believe that that is true I believe that is true my question would be the changes to tip the proposed changes to tip wage we're going to a one wage I would question whether or not that would fix some of the issues and that's fine we can disagree on policy that's fine I apologize I didn't mean it that way I do believe it exists but I do want to show that I feel like it's being made out so that it's not a good job for females I think that's my point that I want to make is that these wages are to me very healthy and I think that that's an important thing that I'm trying to protect I'm here saying you can make some of these changes and I would make more money and my female employees would make less money and that's a concern I have and I think actually that's your that's a major piece of your I would want to understand how this would work and I will talk real numbers I have presented the real numbers that I have from my restaurant so these are the 2018 numbers restaurant one, 17 females that are in tip wage seven males the average female wage 2766 the average male wage 2342 so you're on the last appendix and are these are your workers that's the characteristic well that's where we get back to the question of let's take I don't exactly I know there are benefits and we see employees that they have the option to say how many hours they want to work so they could come in and make $40 an hour and once they've hit where they want to make wage wise they just don't work extra hours which for me there's the other part of it is the mothers that work for me and can work three days a week make wages that work for their life and lifestyle and their children and these are the real wages that they're making this is directly off of their W-2 it's hard for me to translate the hours how many of your front of house staff work full time 40 hours a week very rarely 40 hours a week unless it's bartenders more than 240 hours a week but the servers typically will work 3 to 4 days a week 3 to 4 days a week 8 hour shifts so 24 to 30 hours yeah I would say I would say go up to 35 but rarely are they working and actually when I was working last night you're still required to pay if they do work over 40 hours a week you're still required to make that 1.5 times payment it was like $170 in the payroll of 300 or 400,000 so very rarely was anyone working 40 hours yeah well not making up the difference that is you're still required to pay time and a half if they went over 40 hours on that tip minimum wage so that to me said no one's working 40 hours a week very often because we rarely ever made that these are only waiters and waitresses these are only waiters and waitresses I was hoping that I could actually separate the bartender but the way that our payroll service does it all tipped wage goes into one bucket so I can't then go back and say this is for servers, this is bartenders but I don't know if that's necessarily that important well if you look at the number of hours on a list if the person were working 40 hours a week 52 weeks a year they'd be working 2,080 hours and so as a result you can see all of these would sustain up to less than full time but nowhere does it tell us what the for the whole year this is for 2018 so this is for the whole year and again I don't know if some of these employees only work for a part time of the year I could go through and say who's currently working for me but some of these employees have come and gone we retain quite a few employees because of the wages so I would say restaurant 2 is a great example there's a significant number of females in the restaurant that I know that have been with me almost from the beginning so your turnover rate is fairly low well restaurant 3 the turnover rate is a little higher but we're trying to work on it but also just from all of this and I'd also love to know the difference between what bartenders and waiters make do bartenders tend to make more are they on my eyes? I think it depends on what kind of restaurant or bar you're in, in mine I would say that the servers make more and it's kind of example on restaurant 3 one that says music venue under the first mail that's a bartender only that's where actually you start to see some lowers lowering in the averages because in that restaurant we have a music venue that there are certain people that only take bartender positions instead of servers but I mean the other important thing for me to note is restaurant 3 I'm losing money I'm probably upside down six figures a year right now and I can still offer take home wages that average $28 and $22 an hour so even though I'm not making money right now and I can luckily support that restaurant with the other two that doesn't affect my employees and it doesn't force me to close the doors yet that's an important thing to talk about as we talk about potentially increasing wages for radio players and how they would adjust quickly enough and hopefully the customers would still support them at the higher price points I'm just curious to try to understand the level playing field with these three restaurants are they all of the same age which is the oldest restaurant so which one has been around longer it's at the beginning of my testimony so restaurant 1 is the oldest that's about 10 years old right so this makes sense and then restaurant 3 is the newest restaurant 3 is the newest and restaurant 2 is the so it may take some time for restaurant 3 to yeah we're hoping we'll figure it out and are these all the same level of yeah I would say very rarely anything on the menu is more than $20 for food and beers range from anywhere from $4 to $8 or $7 yeah I would say a medium level restaurant I think when you get into fine dining you'll find that the numbers might be slightly higher but what'll happen is you'll wait on less tables but the dollars and cents come out to somewhat similar they might see a little bit higher so I'll get back to can I answer any other questions on the data that I presented it's very full so thank you I understand why my concern that I want to protect these wages and I truly believe that the other model will hurt these wages okay so we'll get to that because we don't understand the reason for that but why is it that female who are interested are going to jail I would potentially argue that they give better service but basically you're paying I'm not paying them they pay differently per hour they're making more tips okay they're making more tips and if you look at the if you look at the same hours roughly try and get somebody paired male female it is consistent and to be honest with you I don't look at this data very often it's not something that especially knowing I just know that we offer a job that can create a very I know that I'm not forced at any point to pay that tipped credit to get them to minimum wage because they're well above it so I would notice that as I'm trying to run other than tips you can't identify any characteristic like your female waitresses have been here longer or more I see longer attention for female do they get better hours do they get better shifts the ones that have been there longer have the first choice on shifts so I would say just because I have a large female staff in each restaurant and the retainment of that tends to be that the yes they probably are at times on better shifts okay and so one other very fundamental question in terms of tax reporting you have their number their dollar value tips these are all what is presented to the state federally as income so that's all tax it all first goes to you and you reported to the state correct yes they have to enforce every day at our restaurant when they are done it presents them with their credit card tips and credit cards so we know they've made the credit cards which right now I would estimate is around 80 to 90% so that's more transparent so from there if they say none they're basically saying they're getting cash tips so we keep an eye on that and we have an expectation that we see a reporting of above that to a certain extent but cash is difficult but I would say it's a very small part of what these wages are these days I think of course there are restaurants that deal in cash but their businesses are dealing cash too so I think cash always makes a difference they're having to deal with the track money they're vibrating a $25 tip waiters and waitresses come over to my table and of course they haven't had a second did you ever wait tables to share they are that's where I think when you see that happening at a restaurant they are probably tipped pooled and shared at our restaurant most likely from the beginning of service down to service you have a single server and they are receiving the initial tip and there is small under the 15% to about to support staff but that's how that works going to that 15% of that $10 tip $1.50 will be not reported as their wages and you will figure out a way to get that $1.50 it would be reported under the other employee as tipped also yes so you mentioned that you rarely have to make up that difference how do you check this how frequently do you have it well it's every payroll the payroll service by law has to has to prove within the data that they made hourly minimum wage and if we didn't I actually saw it a couple times and I'm sure it probably happened where it was someone who came and went very quickly and said they were to shift but I did see it in like $20 a year we needed to make up for that but it's an automatic within payroll services that that math is calculated and I believe it's an every two week pay period if you are not averaging minimum wage the employer has to make up that difference the other nice thing about these wages in my businesses is they walk with their money every night there's no there's no risk that if I were to not run my business well that they wouldn't end up with the money that they're owed from payroll Tom just mentioned Tom Stevens mentioned to me that there is a restaurant that I guess went under and the money to the servers it should have gone from tips that was coming in a paycheck never came so in our scenario they walk every night with their money and then we withhold basically what's owed for taxes which is pretty close to what tip to minimum wage is so there's a lot of employees see it as a zero paycheck they really don't even think about what that number is they think it's money they don't make but really it's the taxes that we're withholding so if 95% of your tips come from credit cards and you're saying they walk with their money we give them the money before we've actually received them cash night we received that money two to three days later so to this point earlier I think it's a good one 20 years ago many more of the tips were in cash so now you have a check to see like did they really were they able to make the minimum wage for that shit so I'll continue down so why keep tipping I think it keeps menu prices down it allows for higher wages as I'll make the argument that I think that if we went the other way the wages would would go down especially on the higher and mid-level wage earners and right now it's creating livable wages in the state why are you thinking of that if you sort of paying $10 versus $5 why do you think the customer would pay any less I think who restaurants are going to start to look at service charge models where they build a tip into some of the cost of service charge and Marty's starting to see a little 2% service chargers at restaurants there's one in Montpelio there's one in Waterbury one of the restaurants in I believe in San Francisco that did this they basically put the $20 service charge to restaurants taking a 15% rate right off the top of it and then their employees are in $17 to $31 an hour but the employer picks that and I think what happens is say we went to a model where I had a quickly and I say quickly I would hope that you wouldn't do this in a year I would have to quickly figure out how to make my business model work for paying $15 an hour for front house stuff well right now that that tipped amount from a customer makes up that wage so I would either have to take it in price or I would add a service charge I think most people would try to do a service charge to keep menu prices low but once it becomes a service charge employers can dig out that money as they see fit so what this restaurant in particular is doing is taking 15% off the top I don't know what they're doing with that money maybe is going to support stuff it might be going to back a house but I would argue that I don't think that money is for anything but the front of house because right now it tips stay with the front of the house and then from there they're just picking an hourly wage so I think if you started a restaurant and you're brand new you get $17 an hour and now there's growth but is that good if I went to that model I would probably have to try to find an average and start paying everyone in the restaurant $23 an hour and then hopefully have a little up say okay it works for me for a year I could give you another dollar an hour but they're not going to be making $40 an hour like they are now they're not going to be making $35 an hour like they are now there's no way that I could afford to do that and you go into slow season just like we don't ever see that we still owe money to get them minimum wage remember these are averages so there are times in the year that they're probably making $60 an hour and sometimes they're making maybe $10 but I doubt it $15 for me just because I know that we're never having to get to any kind of position to add money into the labor so Mark what if we in Europe I mean Europe most fresh house in Europe charge of gratuity it's not a service charge it's a gratuity and it is embedded in every bill right there 20% what if we required a gratuity but on top of what wage now that's a question one option if one kept the tip minimum wage but required a gratuity you get away from having to please customers you get it automatically and I think we need to hear from the Vermont network and some other places to quantify the sexual harassment piece in Vermont but from everything I understand that's a significant issue in Vermont but if we could chip away at that piece by requiring a gratuity to be embedded in every bill that would be on top of the current I think I think you could certainly try to do something like that I think when a customer sees the word gratuity they have an expectation that they have control over that versus service charge I think when you auto we call it auto granting but if you have a large table and we say we're going to you have so many restaurants through that over 6 people it doesn't mean that they don't go back and sometimes change that number which we have to make the decision whether or not what we do at that particular unfortunately allow them to do that because that is a house rule we've made it's not law and they're saying they want to give less tip cheap skates but if you were to use the word gratuity and try to do an automatic gratuity I think what my argument later or I don't understand I don't know a lot of time is that we have to be competitive too and we have states around us that wouldn't be making these same decisions at the same time and I'm already getting reviews in stone that use a dollar symbol for the S and I have people from New York complaining about prices on my menu and a lot of it has to do with the shortage of labor and what's happening in the back of the house and now we're talking about increased costs in my front of house labor if in the one wage model a significant increase which would cause me to have to raise prices just for that probably I would estimate 10 to 15% just to adjust for a one wage model I mean I'm already I'm already in trouble with tourists in terms of pricing and I would just fear that from New York you take it with a bit of a grain of salt when they're telling me that they can get things cheaper in Manhattan and they can't install that concern to me that that is a lie I don't think that's a lie I think you might be surprised where I know you're looking at minimum wage but we're starting line cooks at $15 to $18 an hour I don't know in New York what they're paying for cooks and I think the other thing that's happening is there's a lot and I've testified on this before there's a lot of restaurants going to counter service models even somewhat into finding dining and when that's happening removing that labor cost completely you go into airports now and there's all iPads all over the little food places and that's how you order your food they've eliminated that job and that happens when I believe that these jobs become more expensive to an employer and they're figuring out how to be more profitable and my concern is that these jobs wouldn't exist in Vermont in the future I've heard a restaurant owner that is very similar in size and so talk about maybe going to iPads and they're running out that scares me so yeah I'll finish this I can answer some more questions I've heard the argument of why does a customer have to pay wages which any other business it's just built into price if you go and you go buy a product you go to a store they figured out what that price is to include the labor in a restaurant model they don't we certainly could do it but again I think I'd probably make more money and my servers would make less I think there's comments about restaurant growth and I believe that restaurants aren't growing I think there's a younger generation that values experience and quality I think it's a lot of what Vermont has seen and growth in the restaurant industry is that this focus on experiencing what Vermont has to offer and getting tourists up here and then showing them that we can do serve them very high quality ingredients a lot of which that are from Vermont is a trend with that you can see increased prices you're going to see increased growth if you're just looking at sales dollars and then any market that has to absorb increased cost in the price you're going to see sales growth because the number has to go up a restaurant doesn't report tips in its P&L but that would basically put tips back into the P&L which would show a higher gross but it doesn't necessarily mean there are any healthier than they were the previous year so I think that's a really important thing it's presented as these states that have made these changes you're seeing growth some of it's forced into it because that that additional labor cost had to be made up in price for a service charge that would now in that restaurant's P&L and then I would ask you to look at Maine I don't know anyone's heard that Maine did actually go to a one wage model and the service and bartenders actually lobbied and got that reversed because they started to see decreased tipping and they believe that that's the wrong thing to do too that was in the article about Maine I added the article I don't need to be saved Mark can I ask you a question class comes into play here in terms of what restaurants we're talking about which servers and so would your would your suggestion be that folks who are waiting tables at these chains who are not coming up to minimum wage because would your argument be it's enforcement that those those employers are not doing I would argue that we should push for higher minimum wage to a livable wage as quickly as possible and followed up with heavy enforcement and making sure that right now if my employees look at a pay stub I think it's relatively clear that they're making minimum wage but it doesn't save the number per hour you are paid for that role on it similar to a concern your concern about just I think just like a lot of employers don't want to come and make the test and hear that that would their business at risk I agree that there's always a question of how can in any time anyone thinks they're wrong and can they call a number and be anonymous and say you know XYZ for whatever crime it's a crime that's a crime so there should be an easy way that Vermont forces employees to know their rights and I don't force but basically know their rights know who to contact and report your employer I love it it's all level playing field fair playing field and then if you have a minimum wage of $15 an hour and employers aren't getting their employees at $15 an hour very clearly on paper they should be reported right that's how it should work so if you weren't there are several directions we could go and get employees here but if you were not facing the prospect of one I hope to be honest with you one wage or an escalator on the tip of the wage would you be in here opposing increasing the minimum wage for your house of people? No, we're already there Yeah, market market's already driven in there I believe that we are Vermont is a very expensive state to live and we are already struggling to get employees in the state because they are struggling to find affordable housing is a great example Stoes is zero vacancy rate so we already know in order to just retain we have to be up there I don't think that's healthy and there's plenty of discussions on how to try to address that but I would be fighting that because I don't like the discrepancy these wages compared to what I'm paying in the back of the house are significantly higher what happens is even if the model doesn't change as it currently is I still think decoupling is the correct way to go so you're not giving raises to these employees because they are not asking for it to be that money could be going to the back of the house without me making an extra dollar that that increase to that cost of the back of the house and my cost of goods almost likely taking price and then these servers will see an increase in income tips or a percentage of price so when I have to absorb the brewery some of those breweries are buying local ingredients the distributor and then I buy that beer from them and I have my markup and every one of them has a profit that they're trying to retain to stay open I'm going to have to take price or I'll eventually be out of business because my costs are going to increase and my labor and cost of goods will increase beyond what I can afford one of the things I heard was there was concern about the elimination of the 8 to 20 group to federal level but it was again the sense that that was kind of meaningless and we could put a state law like 8 to 20 we would state that the fellows have a field I'm not sure that's going to help much but I also question if it's I don't know there's probably other ways you could if the real concern is that people are doing they're getting paid a tipped wage but not doing a tipped job I think there's other ways that you could create compliance behind that and through law I know we need to move on but we are economic development housing and general affairs housing and housing that's a huge issue for us and we're going to be doing a fairly substantial housing bill this year we would love that we hear this from our restaurateurs we want to know how far on average are your employees driving to work here where are they living a waterway restaurant anywhere from Burlington to Barrie to Morrisville long hikes waterways someone can live locally stow very rarely do they live in stow and that's unfortunate I think it's a mixture of I don't think some of the numbers are accurate I see these vacancy rates that say 3% and I was presented with data that showed a zero so I think whatever it is it's not a healthy baby it's not healthy and what's happening is I think that there's a automatic as soon as you're talking about employees that rent they're much easier to be nomads they're looking out west at all the other towns that are also doing very similar things that are maybe figured out how to do public transportation better so all of a sudden they don't need a car for monitor it's very expensive to have a car costs are like more expensive on a lot of things I'm sure you know and I think that there's a settlement that has created a vacancy rate that's unhealthy and unsustainable and you said some of the employees own their own homes so do they tend to own them in the communities they're serving close I mean Stowe, Morrisville, Waterbury Waterbury, Duxbury based in not huge so the people that own their homes are not commuting as far no it could be the same I think a lot of any of them that live in Burlington I don't think own so yeah I guess you could say it's a little tighter if you did a study of it you'd find it thank you but yeah with housing I think that I would select Boardsman and Waterbury so if we can't grow inflation on the grand list that's potentially increased taxes too and I know we have a vacancy problem why not try to figure out how to do smart growth, higher density in downtowns that younger generation wants to be able to live and work in a downtown not have a car I mean there's so many things but right there it reminds us once again that housing is really the nexus for so many issues that we're trying to deal with and I don't know how you deal with the transportation thing I think that the state really needs to look at it the bus and Stowe only runs to get to work so they need a car it's not 365 days a year so they need a car because why would they not have one it doesn't work so oh I know I was almost in that meeting the other day feel free to look at that transportation but yeah can I answer any other questions I'm an open book and I'm happy to show you my real number and at some point servers and bartenders to come in and talk about I think that is well noted and the Vermont network I think we have a couple and what is the actual tip to minimum wage now it's $5.39 the payroll company last year it was $5.25 to $10 it's going to keep going up every year yeah right even if the government doesn't sign up it's still on track and that's my argument against coupling is that it's just automatically it doesn't look like a lot but over time that coupling is a forced increase in cost to businesses that I think is unnecessary when we're already dealing with other increased costs and I don't think the employees are asking for necessarily needed because the rule that you have to get to minimum wage these 20 to $40 an hour servers are not asking for a yearly small coupling wage but it's a big number we look at it on the scale of the business as a whole every dollar is $18,000 in increased costs so last year a quarter was $4,000 in increased cost thank you thanks for taking the time yeah thank you we really appreciate it so next up we have Kate Logan Kate I noticed we have a long list of witnesses and rights and democracy testified on this last week I didn't notice rights and democracy oh one of our one of your was that housing specialist she spoke on this okay I said that because I cut down from the chamber wanted to testify and I said I was one witness per group oh yeah so I cut people off that wanted to testify you know I would have wrecked her I would have wrecked her to provide testimony for Kate Logan Randy did you get one Kate Logan so for the record we're programming a policy for rights and democracy for a member led grassroots advocacy organization operating in Vermont and New Hampshire and the rights and democracy education fund the 501C organization whose mission is to research and advocate for policies that create communities in which everyone has the freedom to thrive thank you for the opportunity to speak to all of you today and for your efforts to find solutions to the issues of poverty and that could be facing our state I'm testifying today on behalf of both rights and democracy and as a co-facilitator of the raise the wage coalition consisting of nearly 30 organizations groups focusing on women's rights, children's well-being racial justice, hunger and homelessness affordable housing, disabled Vermonters, low income Vermonters socially responsible business and the majority of union members in our state who all share a common goal of raising the wages of Vermonters in order to provide wages that will allow working people to meet the basics to support their household budgets we support S23 and its pathway to a $15 minimum wage by 2024 but we also continue to support as we did last spring in a memo sent to house members of the committees contemplating the issue amending this bill so that it includes moving toward one minimum wage that covers tipped workers and high school students as well as clear language to make appropriations for any state budget impacts of increasing the minimum wage and for the adjustments to child care financial assistance eligibility that were discussed by Deb Brighton last week I'll discuss each of these issues in turn but I first will focus on the argument in favor of implementing a higher minimum wage standard in Vermont this argument I think is an answer to a set of complex questions that the legislature is facing what should our wage floor be in Vermont and to whom should it apply is raising the minimum wage a good response to wage stagnation and growing income and equity what should we do to promote sustainable economic growth in Vermont which has a private employment sector overwhelmingly composed of small businesses and finally and implied in some of the testimony and discussion that we heard last week is increasing the minimum wage both just and justifiable economically so raising the minimum wage is one key step the legislature can take to enact an economic policy that works for all Vermonters not just our wealthiest and most well connected we believe that anyone working full time should be able to pay for their basic needs in other words workers should be valued and offer basic dignity in their work we also believe that taxpayers should not be expected to indirectly subsidize businesses that are paying their workers less than a basic needs budget by this standard raising the minimum wage to $15 per hour in 2024 would meet the basic needs budget of a childless worker sharing one bedroom apartment with another childless worker and a two parent household with two fully employed adults according to oral testimony provided by Joyce Manchester in the previous legislative session as such as 23 as 23 outlines a minimum wage policy position that would establish the lowest possible minimum wage that we should allow in other words we would argue that this is what justice demands and as we've already heard this will deliver economic progress to tens of thousands of Vermonters a gradually phased in $15 minimum wage would deliver broad benefits for nearly one in three working Vermonters raising their pay by an average of $2,000 a year and beginning to reverse decades of pay and equality of the nearly 50,000 workers who would receive raises with this legislation 87% are over 20 years old 56% are women 59% work full time and nearly one in five worker parents and just to clarify I think there was a question for the Department of Labor last week which didn't get a good answer about where these statistics come from they derive from detailed work in our data gathered on a quarterly basis by the Vermont Department of Labor in order to fulfill their duty to administer and enforce our mandatory unemployment insurance program further raising the minimum wage for the lowest paid jobs will establish a wage floor that will benefit all of those whose wages provide for their income that is the vast majority of Vermonters as we've heard wages have stagnated for most Vermonters this is in fact a global trend and it is the result of economic policy decisions rather than mysterious market forces that are beyond our control the wage share of our GDP per capita the share of our GDP to those towards wages and salaries has declined the levels that we have not seen since the Great Depression meanwhile corporate profits and unearned income have risen receiving the largest share of the productivity gains and GDP growth over the last 40 years and at the same time the average individual the average individual effective tax rate has risen while the corporate tax rate has fallen what we see are state national and global trends that have redistributed resources away from average workers and towards corporations investors and financiers similarly the largest wage growth has been at the top end of the wage scale and the most severe wage inequality can often be found within the same building or corporation in other words policy has built an economy that disproportionately benefits top income earners and this is encouraged by top income earners activism in fact the example that Mark Friar just gave of the defeat of the tipped wage workers being brought into the minimum wage in Maine is an example of national restaurant association activism who paid a consulting company who had worked for the Trump campaign to come in and do a you know run a campaign to recruit restaurant workers to lobby their own legislators on behalf of not including them in the full tipped minimum wage they did so under with false campaign narratives like save our tips where there was a rumor spread that you know bringing tipped workers into the minimum wage meant that they were going to actually eliminate tipped that hasn't happened in any of the seven states where tipped workers have been brought into the full minimum wage and there are plenty of data to share with you about the fact that average income for restaurant workers has gone up in all of those states there's just a ton of data around that issue I'd be happy to provide more for you and I'm sure Sorrow would be as well so anyway this is unjust and justice demands that we do not make policy decisions that increasingly create divisions within our society between those who deserve to thrive and those who do not there's a long list of interventions the policy makers could take to curb those trends and increasing the minimum wage is just one of those and would help to reverse a trend that suppresses average wages in favor of highly paid executives and unearned income for investors my own grandfather the middle child in a family of 13 from Morales Center Kansas was able to support his wife and three children on the income that he received from working as a gas station attendant and the occasional odd job perhaps he did not have the fire in the belly as commissioner Curley put it last week to pursue higher skilled and higher paying employment but he was also a beloved member of his family and community and fully employed in a job that was essential to the local economy and his work and in his community last year I surveyed in campus low income in Burlington Colchester Grand Isle Rutland City in St. Albans when I spoke to folks who were not fully employed and who were not disabled and who were willing to talk openly with me about their experience I routinely heard that they made the decision to work less than full time because it would enable them to receive public assistance that would give them more than if they worked full time and they would be able to provide the services that were available to them in other words they made a reasonable financial decision to have a higher quality of life, more food, better housing and so on by working less these folks were universally ashamed to admit this and not one of them was willing to publicly share their story one way to interpret this is that these folks do not have the fire in their belly another way to interpret this is that our current wage policy is under employment and undervalues the labor of everyday working people and that these folks are making choices to have the highest possible quality of life within the circumstances that they find themselves we've degraded the dignity of work and working people in our communities by allowing employers to pay wages that do not offer self-sufficiency to adults who are working jobs that need to be done while the American economy has grown and per capita GDP has increased in my experience a lower quality of life than my grandfather did in rural Kansas in the 1950s we can begin to address this by raising the wage floor but we must also ask how and whether increasing wages promotes economic stability and growth both in general and in Vermont in other words is raising the minimum wage both just and justifiable in basic economic terms so I'll offer only one of the many economic arguments in favor of increasing minimum wage here I'll be helpful to look at Australia where a livable wage policy has been in place since 1907 in 2017 Australia celebrated its 25th year without suffering a recession aside from maintaining strong exports this is also attributed to Australia's wage policy no adjusting for the purchasing power S23 would bring Vermont in line with the Australian minimum wage because because they earn Australian dollars and we earn American dollars on the global market just adjusting yeah basically how much an Australian dollar can buy compared to an American dollar but you're just saying that if we pass this bill minimum wage would be comparable to Australia yeah in 2024 I think it's like 18 something in Australian dollars right now which is like less than a US dollar which is comparable to $13 American but by 24 they're comparable yeah they'd be comparable another good way to get a good base wage is to allow national bargaining at the industry level which is what Scandinavian countries do instead of having a minimum wage policy but we don't do that in the United States either the explanation for this effect is that economic processions are related to declines in consumption a higher wage floor helps to break the positive feedback loop that causes economic processions because those who earn the least are often the least directly impacted by ebbs and flows or crises in the stock market but differently those with the lowest incomes spend the majority on consumer goods even when the stock market fluctuates the average worker will continue to purchase goods at roughly the same rate that they usually do even while investors suffer losses in their stock portfolios that is their unearned income with no significant decline in consumption there's no need to lay off workers which would cause a further decline in production consumption and further layoffs so in other words everyday workers are the bedrock of economic stability and potential for sustainable economic growth when we improve workers ability to purchase their basic needs we provide the freedom for our entire economy to thrive in Vermont where the large majority of our private sector is comprised of small businesses increasing the wage floor will have a positive impact on our state's economic growth and will give workers the spending power they need in order to buy more from local businesses and service providers we can probably incentivize that in other ways as well but we need not only consider the question as to whether or not to raise the minimum wage in Vermont but also who the minimum wage should cover we would argue that S23 should be amended to bring both tipped workers and high school students into the full minimum wage briefly including tipped workers and high school students in the full minimum wage is both just and economically justifiable policy decisions as discussed in this testimony this morning bringing tipped workers into the full minimum wage would mitigate this policies historical origins as a form of institutional racism and sexism as well as its current contribution to high rates of harassment for workers in the hospitality industry tipped wage public policy had its advent in the united states as a means to exclude black workers particularly black women from participation in the minimum wage standard that was established in the new deal further the sub minimum wage for tipped workers continues to place these workers in a morally compromised position where they are virtually forced to tolerate harassment in order to secure tips from their patrons I can speak personally of that I think every woman in the room is working in the service industry in the test of that if you were to take further testimony on this issue and considering an amendment to S23 you'll also learn that bringing tipped workers into the full minimum wage does not have adverse economic impacts based on the 7 and increasing number of states that have done so further and expert testimony to this issue could be provided by Yana Lathrop at the national employment law project bringing high school students into the full minimum wage is also necessary in order to avoid disproportionately negative impacts on high school students from low income families but it has broader impacts on all workers high school students from low income families face increased incentive to drop out of school before graduation so that they can better contribute to their families budgets the lower wages will also impact their ability to save their lives after high school additionally these students work side by side alongside adult workers in the same industry a sub minimum wage for high school workers incentivizes employers to adopt a high turnover staffing model in place of adults in order to cut costs both tipped workers and high school students should be included in the full minimum wage and we urge you to take further testimony on these issues and to amend S23 to fully include these workers in the wage additionally we would further ask that the committee amend S23 to address one phrase in section 2 quote to the extent that funds are appropriated as Deb Brighton testified last week expanding eligibility for the CCFAP to hold harmless working parents who receive pay raises as a result of raising the minimum wage is essential to ensuring that this policy change does not harm some of our most vulnerable low wage workers parents and the children of those parents in addition this section of the bill includes appropriations for all other public budget lines that would be impacted by increasing the minimum wage due to increased wages for some state employees and contractors who provide essential services that are publicly funded such as home healthcare aids the appropriations language in S23 should reflect the necessity to make appropriations rather than setting out recommendations for how to allocate funds in case they are appropriated and finally just an additional note in response also to Mark Friar's testimony regarding boosting enforcement capacity if we were to add or continue to have a sub minimum wage for tipped workers currently the state has I think two field staff at the department of labor in the wage and unemployment unit that covers all places that pay wages and pays unemployment insurance or pays into unemployment insurance that those staff are largely funded by federal dollars in order to administer the unemployment insurance program and so this we have some ideas about how to boost enforcement in the state through empowering workers to take public action on behalf of the state but I think the kind of enforcement especially with the sort of data that we had from the Obama administration regarding the lack of worker awareness of the law coupled with the lack of compliance with the law I think suggest that you have to yeah I don't know 84% lack of compliance 84% high right and so we don't have the data on the lack of compliance in Vermont we're trying to address that through a study that is chaired by a professor from Middlebury College right now which we hope to have by next month but partially the reason that we don't have the data that we want is because we have two people that enforce data reporting from you know people who pay wages into the unemployment insurance program and you know there are all these data points that they want employers to provide including how many hours folks have worked but you know but they can't enforce it and they don't really have the capacity to even clean the data when somebody types the wrong number into the system and things like that and not every small employer uses a payroll service so relies heavily on their own data too so I'm just a little nervous about expanding enforcement capacity to continue to make sure that people are making the kind of money they're supposed to be making but just to clarify you're not saying to expand enforcement capacity you're saying you don't have faith in the capacity we have now and I don't have faith in the state's willingness to boost enforcement capacity in this one particular area and further elimination of the tip minimum wage makes this a non-issue there's no longer any question about whether a tip a worker is getting them in a wage in the same way everybody else is just eliminates administration but also if they're with the DOL money it's federal money it's primarily for UI and if it's federal it means they wouldn't be able to go and enforce tip minimum wage issues because now because Trump's rule recently so we'd have to fund all of the enforcement ourselves or find other creative ways to boost probably eliminating like a very complicated reporting requirement in the tip to wage additionally rectifying the historical wrongdoing is probably the better idea so we're grateful for your leadership on this issue despite S40 being vetoed in the last year's session we thank you for taking your testimony today please join with working people, supportive business owners and your constituents and raise the wage for nearly a third of our workforce and help us make the Green Mountain State a leader for working families in the middle class thanks thank you thank you very much next we have David McInger nice to see you David nice to see you too I know first time this session there was a mistake on your agenda I'm not here on behalf of the Vermont Association for Justice I don't know any of our clients are not no I'm here for three clients working Vermont which is a coalition of many of the public and private sector unions in the state of Vermont AARP Vermont and the coalition of Vermont community of Vermont lots of clients I don't know cove working Vermont working Vermonters cove and AARP AARP Vermont and I'm going to read in the cove and the AARP statements are brief I've sent them to the committee so just a few points and I will be brief on from a working Vermont perspective we think this debate is a lot like the debate we had around Vermont's prevailing wage as it pertains to construction contracts that when you set a standard which is a livable standard we see increases in productivity and efficiency and you've heard from economists I'm certainly not an economist but you've seen the benefit of that reflected in the numbers that you've received we saw the same thing in the debate over prevailing wage we know Senator Ballant one of the first issues she worked on exciting issue but the state of Vermont has recognized that for construction workers that there's a minimum that is appropriate and we saw it fit to increase that by 42.5% a few years ago to acknowledge for the appropriateness of having benefits included in what wages are paid to construction workers in the state of Vermont another issue I've heard some testimony about well how are we going to pay for this as small businesses one thing I just wanted to point out is that we saw in the last few years one of the largest redistributions of wealth in our country's history through the tax to the tax bill that was passed on a federal level so what we saw there was pass through entities like LLC's and other pass through entities getting 20% reductions in their taxes we saw the lowering of the corporate rate to 21% we saw significant lowering of individual tax brackets so we did not see commensurate increases in things like the earned income tax credit or the federal minimum wage frankly so the money is there created very much by by this tax cut and we think that's appropriate that if you're going to give the wealthiest companies and individuals a massive tax break that some of that money should flow to the workers that are helping them create the wealth so in a final point on a point of competition we see this particularly in the construction unions in Vermont that we are paying the unionized construction workers are being paid a fair middle income wage and they have a very difficult time competing with those businesses which are undercutting cutting corners just as a society I appreciate the last two witnesses talking about enforcement I hope that we can come back here later in this session and talk about enforcement and the need to enforce our laws whether it's wage and hour laws or laws around misclassification because what a lack of enforcement does is really drives businesses to those that are cutting corners at a competitive disadvantage for those that are doing the right thing so I would say in this minimum wage bill it's very similar there are a lot of Vermont businesses that are paying this and they are now at a competitive disadvantage to those that are in oftentimes multinational corporations that are here so that's all I have with my working Vermont hat on I'm just going to read these two short statements into the record from AARP Vermont and I should just say I'm working Vermont I don't know if I said it we fully support S23 and look forward to working with you to help get it passed AARP Vermont this is a statement from Greg Marshall then our executive director I want to say one thing about working Vermont because I had some personal experience with that as well which I won't get into but in your mind is there any single worker within working Vermont that gets paid I actually think there are a few there are some construction workers that are sort of I'm just talking about $15 less than $15 well actually the current I don't think there may be you know I don't want to say definitively but by and large no I think most of the unionized workforce gets above 1050 or 1075 an hour at this point in Vermont there may be some pockets in certain unions that represent really low wage workers maybe ask me you know not others but by and large and I should just say as labor unions who by and large are members would not benefit from this bill we still think it's absolutely essential I mean we are part of a movement for workers to generally have better conditions the labor movement has oftentimes advocated for positions that rise everyone's up as opposed to just their own interests and in many ways that's the point of working in Vermont is to advocate on issues that help workers generally not just unionized workforce you mentioned cutting corners that there are those businesses that are cutting corners that are contrary to members of working in Vermont can you elaborate a little bit of what you mean by that? Sure I mean the issue of employees as independent contractors is a huge one you can save somewhat upwards of 30% on your margins if you misclassify somebody as an independent contractor that's an issue that's been rampant in the restaurant industry in other places construction janitorial services but throughout Vermont's economy the use of illegal and inappropriate misclassification is a way to I would say bolster the margins for owners to the detriment of workers and also to the detriment of companies that are paying those fair wages I mean will we get a report any day now that we asked for last year on the scope of the enforcement of that we heard I don't know if you're here but we're very prepared for a quote from Damien and the numbers are kind of what to fear yeah okay I'll just move on to ARP and then go quickly so ARP's statement while this is not an area that ARP Vermont has been engaged in to any great extent ARP does support legislative efforts such as S23 which would help workers make progress to obtaining sufficient income to cover essential living expenses furthermore we would support indexing such laws to ensure that they keep up with inflation so that workers can meet their ongoing basic needs and I know that indexing was a piece that you talked about last year I don't know where you're headed with it on this can you get us any kind of job data on people most focused on people over 65 taking part-time jobs to make ends meet that might be lower than $15 because I feel like there are seniors who seem to be having grocery bags or something like that if you nationally or locally some people would say that this bill doesn't affect seniors at all so we know certainly anecdotal we have Ruby Baker from Cove requested information from the Department of Labor and we got some information showing how many people at what age groups are in the workforce they couldn't tell us whether they were making minimum wage or not which was surprising to me but their economists said they didn't have that let me put some questions maybe you have the resources so one of us are disappointed that this testimony doesn't actually address the huge population that would be affected is women because we know the vast majority of older people are women and we know that when they earn less they live on less as they age so that is a huge piece for I think a number of us as we look at these two communities so I'm sort of surprised it's really not addressed in either Cove or AARPs memos and I think there's a lot of data on that and if you look at change the story the wonderful work that was done by that commissioner you can see that that data so that is another major reason particularly for the older community both A, they're earning so little with their pension social security, many are driven back into the workforce and there are many of them retiring so much less, they're earning less as they age big issue for women yeah I mean right now the data from the department of labor says that women age 55 to 64 there's 33,400 in the workforce and 65 plus 15,400 in the workforce a little bit more for men over 65 less for men between 55 and 64 the department of labor apparently doesn't track that we need to ask them I mean a lot of us embedding asking for measures in our bills which we have to remember to do all the time where we can have almost no government accountability we don't track you have this thank you I should just say for the record that both ARBN co-support S23 and encourage passage we're grateful for this thank you did you want to take a break Mr. Chair? he is going to turn us all into camels we would appreciate I didn't see a draft request on the camel legislators as camels maybe a cabaret well for the record Austin Davis, government affairs manager at the Lake Champlain Regional Chamber of Commerce thank you members of the esteemed second committee on economic housing and general affairs for inviting us to speak last week and taking time for us this week and we would like to start off by saying we see that the Vermont economy is currently experiencing a labor shortage with an unemployment rate of 2.8% and in the Burlington area an unemployment rate which is in dear to us employment rate of 2.1% and as our governor noted last week our state has about 15,000 fewer workers and in 2009 additionally our state statute is already increasing our state minimum wage by the consumer price index annually or a lesser of the consumer price index annually or 5% and from our perspective these factors are already driving competition among employers in our area and resulting in upward pressure on wages within the Lake Champlain region specifically in all counties and areas of Vermont however it is in the Lake Champlain region for these reasons LCRCC doesn't oppose an increase in Vermont's minimum wage we would however ask this committee and subsequently the General Assembly as they look at this bill to direct special consideration and attention to proposals and factors that we would like to outline today that you consider adjusting the rate schedule in this bill S23 more closely aligned with the rate schedule and last year's bill S40 and I'll go into that in all these in a little bit more detail we also ask that you decouple the tipped and non-tipped minimum wage to create a higher marginal benefit for back-of-the-house service employees we'd like to also ensure that the monitors dependent on state benefits are all harmless when making new income which is something we've greatly we've appreciate really seeing the attention that you folks have been putting towards that in the past weeks also we'd ask that the passage of this bill efforts be refocused and redoubled away from the income side of the equation and more towards the expenditure side of the equation that we see it really most affecting for monitors on a day-to-day basis I know as a kind of you're basically saying affordability debate let's keep focusing on expenses and not on income yeah this is kind of a brief overview of my testimonial dive into all these factors earlier on but yes we're very concerned about affordability our monitors on a day-to-day basis have to balance their income and their expenditures we feel that this legislature has focused on income a lot this year last week it was actually discussed that this would be the fifth time that this body has taken up a minimum wage in the last two decades we're doing a lot to increase from our income we want to do just as much to reduce from our expenditures and I've got some ideas that I'd like to or some people to point to discuss those things with but I think it would be really beneficial to everybody in the conversation so right before I jump into it also I'd like to just kind of make one over we've heard a lot of testimony today about you know comparisons of apples to oranges this is happening in this state or this is happening in another country or discussion about extreme wealth disparity that might not necessarily fit in the context of Vermont and also discussion about large corporations you know I'd like to just you know as I head in my testimony I'm speaking on behalf of Vermont in this state we are predominantly very small businesses up to 84% below 25 employees if I remember correctly I come from a family that has a very small business and all of the proposals we talk here about I feel how often are put in the context of this will affect Walmart whereas Walmart can absorb necessarily or this might affect insert big employer they can absorb that but the small businesses have the tightest margins and will be disproportionately impacted by the changes we make in this road so as a point of observation also you know I've just a couple things I'd like to talk about that I've heard in conjunction with the minimum wage discussion in this chamber and also in and around the state we'd like to talk about compensation compensation of employees and just that less of a wage context and more of a compensation and we think it might be helpful to have this conversation in the context of a compensation floor and the reason why I say that is because if we have an employee or a promoter is going out and seeking employment to them looking at a position that might be $13 an hour with benefits versus a position that might be $14 or $50 an hour with no benefits they're going to take that compensation into account and I think that when we necessarily legislate a minimum wage we're not always considering the other benefits that come along with wages so there's folks out there who might be paying under what some folks would consider a minimum wage however they're going a little bit further offering health care, additional training and things like that so that's just one thing I'd like to bring up and I think it's important last week we heard from Franklin County rehab center where they discussed for example training that's a very important thing she actually if I remember correctly testified that they spend up to $30,000 on getting folks licensed as nurse practitioners and that to some extent is a type of compensation that frankly we kind of expect that comes out of our public education system but a lot of times employers are taking on people at a minimum wage understanding that they might not be contributing to the overall entity or company or business for maybe the first six months they'll train them and move them up the rate scale rather quickly so that's one thing I just kind of wanted to flag also I've heard a lot about minimum wage in relation to rent earlier we all kind of talked about how housing is really at the nexus of a lot of problems I do think that there's a lot of comparisons made specifically hearing minimum wage has kept up with the cost of housing housing stock hasn't kept up with the men in this state and I just wanted to kind of let me know I understand I understand I'm extending an offer as the Lake Champlain Regional Chamber of Commerce did we would love to work with you on housing issues because as I said earlier we see that as a large expenditure for most of our volunteers which is on the other side of the equation after we talk about income so and then so to get into what I was discussing earlier about a slightly lesser aggressive rate schedule I think last week was discussed that it was about a 6.1% average increase in wages which is being proposed in this bill as 23 I didn't actually get a chance to go back and look at what S40 was but as you all know you're looking at the same target in a shorter amount of time and that's you know creating a larger more aggressive increase we'd ask that you just kind of stick closer to that last year's scheduled increase which might push you out to 2025 to hit that $15 an hour target however we feel that you know the business community to some extent is planning with tight margins to you know in good faith reach those targets and even just an additional 1.5% of increase in that rate can have really big ripple effects across small businesses books so I'd just say what you'd like me to say you're just playing your role without your shame it's almost like we agree with you as to the pace and it would have been there had not been for the video and I understand that and you know it's a new year it's new parties who have come to the table and we're all wanting to do different attitudes that's fair I'll concede that point I do think that you know you're still asking business communities to take on this for a factor that they couldn't have influence on they couldn't have influence on it it wasn't the business community that vetoed the legislation it would be the business community that would feel the consequences of more aggressive increase and a quicker time to have more straight so I just want to say on the comments you made and benefits that go into the people pay Senator Rock and other side of the amendment on the floor last year to do that we looked at that in the summer study committee no state except one city has ever gone into that level of detail surrounding a minimum wage proposal can become very complicated very quickly administratively and I would bet my last dollar that we went down that road the next argument is that we can't do this administratively it's not worth the cost and the bill would sort of unravel so I appreciate the equity but there's also practicality and we face practicality issues all the time you should have been here last year when we tried to do paid leave and the Department of Labor said it would cost ten million dollars to administer the program that's right it's a little absurd so awesome thank you for your testimony I think affordability has two sides and sadly cannot be part of the income if you're only looking at expenses that's an absurdity the second question we've heard for the last two years consistently that Vermont the Vermont business underpays employees 20% national average that Vermont underpays consistently in every field I know this personally for them in Vermont law school that when my husband was hired in 1991 to be a professor at Vermont law school paid average Vermont law school professor wage now it's 40% below national average and that is what we've heard consistently 20% to 40% below national averages I'd like to ask you what you're going to do on the employer side on the small business side to bring wages up to to even not minimum wage I mean I think that is a huge issue on the affordability front period no matter what your wage is in Vermont and we're trying to do it for the lowest wage people but I think on average that is a huge issue facing on the affordability so I actually have that later in my testimony if I could continue I'll get to that a little bit as far as the compensation you're making me a little nervous how long your testimony is just to be fair because we're trying to get to the point where we're going to have to bump people again so anything you could do to I will speed along as quickly as possible just to cover on the compensation floor wasn't that I would necessarily be proposing make a compensation floor and statute in the state I just think it's a helpful frame when discussing this and frankly it's a frame that employers and employees work through on a day-to-day basis so I can quickly skip over my next portion of my testimony because you heard really great testimony earlier from Mark about decoupling the tipped and non-tipped minimum wage I'd say that he did a really good job capturing the essence of what we were saying frankly as a person who operates multiple restaurants can say it better than we could frankly you know we'd like to see folks if we saw the decoupling we could see more compensation going to folks in the back of the house and lifting all votes so we ask you to consider decoupling benefits cliff let's skip over that a little bit as that's being worked through and we really would like you to know that we're an asset as for those conversations to continue and then as far as you know kind of to your point senator about across all you know walks of Vermont life compensation is a little bit lower and issues around affordability in the state we really would actually like to suggest that you invite to testify the United Way Northwestern Vermont and to talk about their working bridges program I've done a lot of sit-downs with manufacturers in Triton County to better understand wages and the issues of affordability manufacturers on average are the mass majority of them I've really not found any that aren't necessarily are paying above what you're looking to translate as the minimum wage however they're facing all the same problems that are put at the foot of minimum wage and one such problem is turnover which you folks have had significant amount of interest in this committee so we think it'd be really helpful for you to understand a lot of the issues they're seeing that are affecting turnover in the state and how wages aren't exactly an indication of turnover it's a lot of other affordability crisis issues basically working bridges is a program in which a navigator comes to as contracted with an employer to come to that employer have office hours and pretty much be there for employees who might have life issues that be housing, transportation, child care all of these affordability crisis issues that we really like to see focus on after the passage of this bill out of this committee they focus on these things and as I said they focus on these things with employees who are making above the wage that he likes legislate and we just think they'd be a really good asset to you I would be fine in the business of seeking people out to find a way of getting them to contact us I can do that sir we're probably going to have one more day part of the day of my testimony then we're going to start moving on to discussing the bill in the committee so if you want to follow up on that we should do so because you know Senator Brock has somebody who's interested in having to testify a worker Senator Brock to find a day that's going to be in for his witness it looks like you're aware of this at the same time that's it so as I said keep it short as requested we are here as an asset to work with you to take on these harder problems outside of wages we see wages as one portion of the equation that we really need to focus on and in our area specifically we've seen that wages even if you are achieving high wages just by issue of vacancy rings or availability of child care long waiting lines for different services you know we just don't solve all these issues and we'd really like to be able to solve them we all like to give them all some former colleague alum of the house I think it's getting a little long for you to be able to always can say hey John Kennedy still claims it there is there's no expiration date great oh no you have one I think sorry that's for Michael for the reference Michelle Faye I'm the Executive Director of Voices for Mom's Children and I tried to craft testimony I know you've heard from a lot of people and I tried to craft my testimony to focus in on things that maybe you hadn't heard or to draw attention to these three areas although after this last testimony I'm not sure about what I want to express our appreciation for you taking this on our rear member of the Wage Coalition so obviously we support the overarching goals of S23 has introduced we appreciate your commitment to improving the economic security of working volunteers at the low end of the wage scale whose pay has been largely said while the cost of living has increased around the state and we know as advocates for children that every dollar that comes into families especially low income families improves outcomes for those kids we have increasingly been paying attention to the needs of young adults as the brain science knowledge around adolescence expands we know that young adults are constituency that still needs our attention and so I wanted to draw your attention to how minimum wage might be impacting young adults so you've heard some testimony that the average minimum wage worker in Vermont is 38 and female at 45% of minimum wage earners are 40 or older it's also true that young adults are overrepresented in the minimum wage workforce nationally 54.6% of minimum wage workers are age 16 to 24 and most of those are over age 20 so these are young adults this coincides with the age group that experiences the highest rate of poverty young adults 18 to 24 as a state we should be concerned with the wellbeing of young adults and not shy away from the need for new workforce participants to earn enough to meet their basic needs raising the minimum wage is a critical policy tool to achieve this and this chart that I lifted from data USA shows you the breakdown of the poverty rate by age and gender and you can see right in the middle there that tallest row is males 18 to 24 followed by females 18 to 24 age groups it's females 25 to 34 and then they're also having much higher poverty rates than the rest of the age and gender groups sorry to our previous testimony look at the final bar on the right right exactly older women it's unbelievable yeah that's why it's unbelievable and I'm certainly concerned about older women as well but when we think about our constituency young adults and then these folks are the average age of first childbirth is about 26 so you look at who's having children and what their poverty rate is it's bad and then if you look to the left of the chart you can see the consequences of those the children running in poverty so kind of related to this but not quite is another constituency that I think doesn't have a large voice in this conversation is students so we do object to the expansion of the student wage from summer employment to year round students for low income families are often making a significant contribution to family income for there's a report that came out of Massachusetts that for low income families students income is making 17.7% of their family income so it's serious so in addition we're concerned about the secondary student exemption encouraging people to drop out of school if you're talking about a $3 difference you know and you're barely staying in school as it is that might be the thing that causes you to leave school prior to graduation which as we know has an impact on your earnings and your well-being throughout your life finally to this point Vermont's lack of investment in higher education puts additional pressure on young people to save for and contribute to the high cost of college or vocational training we ask the expansion of the student exemption from the minimum wage to be removed from S23 and that the legislature commission a study on the impacts of this policy on low income secondary school students and their families and then the last piece I think has gotten a little more muddled it's this component about paying attention to what has been colloquially referred to as the benefits cliff we're trying to kind of call it paying like the net family resources to meet basic needs so we're obviously appreciative of the of the attention paid to address the unintended consequences of raising the minimum wage on people's eligibility particularly for CCFAP my concern is that to the extent funds are appropriate a language to understand is typical we can't find future legislatures but I'm looking at it from the perspective of another policy that we're very familiar with which is reach up so reach up has an intended impact to protect kids from deprivation and it's not meeting that intended impact it's not meeting its statutory purpose because it has this similar language of to the funds to the extent that funds are appropriated so it feels like there needs to be some stronger language and I don't know what it is but what we did with reach up last year was require that senate approach put in an additional phrase into what we call the current services report I think is called the unfunded budget pressures report or whatever it is so that if there is a time when those funds are not appropriated it is clear that there is some accountability so if you are choosing not to appropriate it you will find out how much that the funds should have been appropriated and it will have a line in that report so it just creates more transparency I mean obviously I'd like to hope that it wouldn't come to that there's a commitment obviously to have those funds appropriated but we know that in addition to the 1.5 million or whatever I just mentioned there are tremendous pressures on the child care financial assistance program tens of millions of dollars so we want to make sure that the things aren't lost in the shuffle so that's a great point I mean I don't run this bill in law about this work last year in all the conversations with the court reasons coming they heard that we not direct them how to spend the money they as you know because the bill has to go there they will make that decision one way or another so the question is why aggregate them in advance it may be different this year with seven million dollars we might want to say that this is of any new funds appropriated this needs to be the first priority of the local backwards so we'll look at it I don't see but I have to be honest this is the kind of stuff that they're going to decide it's not at least last year there were a lot of competing interests so to be gentle and say we like this idea we think this is important but we understand that you're the appropriator prioritizing things please take a look at this it worked out I know there was some glitch we're in the time of the veto where the language maybe didn't come right but the intent of the legislature both sides was to fund to hold people on this last year so that strategy worked last year so sometimes it doesn't sound real it's just a real message but our job also is to advocate as we all know strongly for the things we feel are really important and we may have to be advocating for that money actually given where props upstairs may be who knows if the 7 million has an aspirational aspect of the budget will actually be honored and even within that 7 million we don't know where it will be all that is true given the 7 million years not only me and advocacy around that that's going to need to stay or grow my private heart to believe if you get that kind of money they're going to let people go in the wrong direction as a result of new money I think it totally depends on what is cut in to make that 7 million yes quite honestly I think that because I'm not fully appreciating it's where the tip for town we'll see what they cover up with the language next weekend we want to be more aggressive when it's something that we'll continue to have my experience of Senator Kitchell is that she's a big fan of transparency she's the one who fought for that reach of language get it in there so I feel like that conversation will pursue as well and thank you and sit around because we're going to have a little discussion on student ages today and after Kara I found a all about food so we did the today good morning so hi my name is Kara and I work for the Vermont network against domestic and sexual violence for the state life federally recognized domestic and sexual violence coalition and I'd like to thank you for the opportunity to speak to you today in support of S23 and I'll go over my testimony I didn't specifically address the tip which but I would be happy to give you my thoughts about that so the Vermont network supports legislation that would help to mitigate impacts of poverty statistics show that people who live in poverty are twice as likely to experience sexual assault and we know that domestic violence often 99% of the time includes some form of economic abuse economic effects of domestic and sexual violence are pervasive and long lasting just to give you an idea of some numbers recent studies estimated the lifetime costs of rape alone was over $122,000 per victim in partner violence it was over $100,000 per female victim over $20,000 per male victim and this includes the impacts to the survivor as well as the society as a whole so this includes things like you know court costs and civil criminal all that just sorry Kara did you meant this electronically to Kara? yes this morning I did I cited statistics at the bottom as well so women people of color, immigrants people with disabilities and LGBTQ folks are most impacted as they already experience each gap raising the minimum wage will have a positive impact on tens of thousands of low wage workers including survivors and is an important step forward in creating a Vermont community where all people can thrive a couple weeks ago I testified on the housing challenges that survivors face in Vermont and I know that you've heard that earlier today and that it's a problem that you all are well aware of Vermont domestic and sexual violence advocates have identified lack of affordable housing as one of the largest barriers to survivors and moving out of shelter like independence and stability it's a challenge for Vermonters housing but especially for minimum wage Vermonters and I know that you've heard that it would take $22.40 an hour of wage to afford a two bedroom home in Vermont so that's $22.40 today not $15 in 2024 we feel like this raise is long overdue and we also welcome any conversations with you around housing and how to create more affordable housing in Vermont, something we're really committed to last year I met with the survivors young mothers living in shelter we were there to talk about employment it was an employment workshop and they were sharing their work experiences their challenges now that they were single moms and their hopes for the future when talking about getting back to the workforce they spoke about the challenges of working minimum wage feeling undervalued and asking is it even worth it to work then one woman said very optimistically and this is a true story I heard that they just passed a bill to raise the minimum wage to $15 an hour and I had to tell her yes they did everyone worked really hard on that bill but unfortunately the governor beat it so I want to thank you for taking the time to pass the minimum wage bill and thank you for taking the time to consider it again this year we know that we'll have a real positive impact on survivors we also appreciate the attention paid to the potential impacts on the child's care financial assistance program those that are on that program this is a vital resource for survivors and children and we were excited to hear about the governor's and the governor's address that he had some money for that program we'll continue to work on advocating for resources that are allocated to this program that they match the actual need in the state so we support raising the minimum wage we think it's an opportunity to make real positive change in the lives of the most vulnerable in our state and we support that change and I would be happy to talk about the tip to minimum wage if you have any questions you're here and I hadn't realized you were here when I wrote down during the course of the testimony from Saru and from Mark but it would obviously be very helpful if we could get from on data on the sexual harassment impact with tip minimum wage survivors unfortunately I don't believe that specific data exists so there's been I think very little data collection nationally on the prevalence of sexual harassment I know the Me Too movement there's been a lot of conversation about sexual harassment in the workplace and there have been several national polls and they kind of show they have different statistics but they all show that it's a pretty prevalent issue one of the issues is that when someone is experiencing sexual harassment of that nature it's not their employer that is or a coworker that's subjecting them to sexual harassment although we know that that happens in low wage work but it's actually the customer so I think that you're going to find that there are probably very little if any data on that specific issue but we know that it happens and we especially know that women especially working in low wage work are pretty reluctant to go to an employer and say this is what I'm experiencing because they rely on that work on those tips and on that job to provide for themselves and their families so I think that if we eliminated the tip wage we could see that instance of sexual harassment go down I think there are a lot of other things that need to change in our culture as well so I don't think that that is going to 100% eliminate sexual harassment but I think that that could be a good step in the right direction we should chat and see if you have people who are willing to testify or if there was somebody even if we don't have the data if we could have someone that might I don't understand hearing all this why restaurant workers waiters across America haven't unionized I don't get why they haven't formed a powerful response to all this this is interesting to me I think that's some of the work that Sayru is trying to do Sayru is definitely yes we also hopefully we'll get to revising the issue of sexual harassment yes very much but if you have witnesses you thought would be appropriate and could speak to this in the knowledgeable way I think we would really that would be helpful I did reject it our advocates last week I had a discussion around this I didn't get anyone that said I have someone that is going to be willing to testify I can see if somebody would it would be helpful I think it's easy to dismiss if there isn't testimony about it and I would like to point out that often times we hear from employers that are doing the right thing that are paying fair wages that have a really great work environment and we're not hearing from those workers that are working at places that do not have that type of work environment because frankly they don't have the time or they're not knowledgeable of the resources available to them they're not knowledgeable of what's moving forward they don't have those resources at their fingertips and so employers that are saying you know we're not experiencing this I think you all know that it's really important to put that into context of maybe they're not seeing that in their particular place where they're offering great benefits or great wages but you have to think about the folks that are working at the lower wage across the scale jobs and the ones that we may not have the same type of work environment so thank you hey good morning good morning thank you we get power we do we do which is a gift I want to just say for the record that I served on the board of public review about I've seen the company good morning everyone my name is Faye Mack I'm the advocacy and education director of hunger free Vermont I thank you for having me hunger free Vermont is also a member of the race to wage coalition so we're grateful for the opportunity to support S23 and talk a little bit about that I have handed around the testimony that I submitted some a bit more detail and I'll sort of hit the higher levels because I know we're running a little behind time today hunger free Vermont just for reference because we aren't actually in this room very often we are a non-profit statewide anti-hunger organization we've been around for about 25 ye