turn movements. So, signalization and some cross rocks and some pedestrian safety put in. Do you think that will be a help? I think that'll be a great help for those who want to take advantage of the park and the women's garden and the dog park as well. We're so fortunate to have those parks and those trails in our area and we always want to encourage more pedestrian walking and not only good for health wise but it's just good to take advantage of what we have here. I guess I would be concerned about when you're crossing, do you feel safe? Not during busy traffic hours, I do not. You really have to, especially when you're crossing, it's the right turn. People that are not yielding to the walker, when they're making a right turn, that's where most of the dangerous crossing happens. Okay, so I guess, again, that we've talked about throughout this whole program is driver attention. Right. Drivers having some patience and just being aware of what their surroundings are. The pedestrians, the signals, the crosswalks. And hopefully if all that's taken into consideration, we'll have a good, safe intersection. Thank you so much. I appreciate it. And keep walking. You're welcome. Thank you for watching today's Council Comment. If you have any further questions or suggestions, you can email me at my office, jmasadi at lexingtonky.gov. I appreciate you watching today. Be safe, be attentive, and have a good day. Thank you. ¶¶ Okay, we have a quorum. We'll go ahead and get started. This is the Budget and Finance and Economic Development Committee meeting. Welcome, everyone. First on our agenda today is approval of the previous committee summary. Do I have a motion to approve? I have a motion. Do I have a second? A motion to approve the committee summary and a second. Are there any additions, deletions, corrections in those summary minutes? All right. Seeing none, do I have all in favor say aye? Aye. Any opposed? All right. That passes. Next on our agenda is the monthly financial report from Commissioner Bill Mara. Welcome, Commissioner. I know we're just off the budget work, and we're back into committee format, so this is a welcome presentation. Thank you, Chair. I have the standard budget and finance update, and this is year-to-date through May, so we have 11 months to talk about. And the first thing to show is comparative unemployment rates. and as you can see, we are lower than comparisons to the region, to the state, and to the U.S. Kentucky in April was standing at 5.4 percent unemployment. Excuse me, the U.S. was 5.4. Kentucky was at 5.0. The surrounding area was 3.8, and Lexington stood at 3.6. Being down below 4 percent is territory that we enjoy being in, and is reflective of before the economic downturn in 2008. Next one is the same information, just a three-month smoothing. Kind of takes the spikes out, but it comes up with the same observations. Some of the selected economic indicators we just talked about. Unemployment. The employment shows an increase year over year. We're still waiting for the December of 2014 results to be released, and we'll update that when we receive it. We do show a downturn in county permits issued during May, 1,400 versus 1,800 the same time last year. We show an increase in business license issued, 360 compared to 280 last year, and an increase in home sales year over year. And a good thing is foreclosures are now under 20, both last year and this year, comparison. To look at our four top revenue streams, that is just for the month of May, which isn't indicative of where we stand. So I'd like to go straight to the year to date. And this is 11 months ending. Our largest revenue stream is the employee withholding, and we're at $158.6 million. And that compares to a budget of $160.1. We're under budget about $1.5 million. Last month, that showed a variance of below budget of $2.5 million, and we talked about timing differences and how sometimes revenue comes in the last of the month or the first of the next month. This reflects that timing difference. We picked up $1 million. We have projected that we would end the year about $2 million below budget. We may beat that. We may come in at more like the $1.5 below. But we took that into consideration when we were presenting to you the 2016 revenues, so we're basically on target to where our forecast was when we presented the 2016 budget to you. The net profits has a positive variance, $886,000, and that's where we thought it would be. It's been stronger year over year, and the April 15th filings support that. Insurance also is up 3.7%, just under a million dollars, and that's pretty much done for the year. We get very little revenue in in June, so that should be the approximate variance we'll see at year end. And then also very strong is franchise fees. We have a $2 million variance, almost a 10% year over year. That may move a little bit with the June payments, but right now we're at $2.4 million favorable variance in the top four. I would finish that presentation to say that these are the four revenue streams that we accrue back into June at the end of the year. So it will be August after July revenues have come in and been recorded before we will have a glimpse at how our actual to budget for the year ending will look like. Questions on the top four? I think there are, Commissioner. Council Member Brown. Thank you, Chair. Just a question on that particular slide. Two questions. The first one on the employee withholding, we budgeted $160 million. What did we budget for $16 million? I can get that answer. I didn't bring the 400-page book. I know you increased it a little bit, but I didn't know. The reason is, since we're not hitting, it doesn't look like we're going to hit our budget in that particular category. and I just wondered if it affected when you looked at the 2016. We projected that we would be soft by the end of the year according to our forecast, and we took that in consideration when we were building the 2016 budget. If you'll allow me to go to the next slide, you'll see year over year we're 3.9 percent higher than last year. So it's not that we don't have increase in withholdings. We just aren't quite meeting what we had budgeted. You don't have to give me that other information. Okay. This explains. All right. Part of what I was asking about. I think that's it for this slide. Thank you. Next up, we have Council Member Lane. Yes, Commissioner. I think my question is, if our unemployment rate has gone down during the year, why wouldn't our employee withholding be going up? Was there some major loss of revenue somewhere? For example, a major corporation closed down high-paying salaries. I think I'll refer you to this next slide. This is year over year, not compared to our budget. And we have a healthy 3.9% increase over withholding revenues the year ending or the 11 months ending May of 15 versus the 11 months May of 14. So it's a matter of we have strong revenue growth in that category. It has not met the projected budget that we adopted. Sorry, I misread that. Thank you. Anyone else on this slide? Okay, continue, sir. All right. Well, at this point, I guess I've kind of referred to this slide. This is just more a trend over year over year, not compared to budget, which shows each of the four categories are plussing healthy increases. We're about $12 million more in these four major revenue categories in the same time last year. And I'll invite Melissa Luker to go over the rest of the results, unless there's any. Yeah, before you move on, sir. Councilman Maloney. Well, when you budged last year, what percentage did we figure we were going to have this year? Was it 3.5%, 4% or did we increase in our revenue? Did we have a percentage what it was? 3.5%. 3.5%. We think it's 3.5, but we can confirm that and get back to you. So at the pace we're going where we're going to have? Well, we'll have a positive fund balance, which will be later in the presentation. Is that your question? I just want to know, what's going to be considered for hiring a 3.5? Is that what you're telling me that we're going to probably end up having this year? Our total revenue should grow more than 3.5 by year end. Okay, you're a wonderful answer to those questions. Thank you. Anyone else? Okay. Mrs. Luker. All right. Let's go to the next slide here. Okay. Bill's talked about the top four, so we'll move on. Other licenses and permits, that's up 15% year-to-date through May. That's due to the bank franchise fee is one of the main drivers there. Ad valorem, we're within 1% of budget there. That's due to realty taxes. Services, you'll see, were again negative this month. There was a delay in getting two quarterly payments for our excess fees and collections. Once we receive those, we will be positive in the services category. So that's just something to note if we get those by the end of the year. Fines and forfeitures were right at budget. Property sale, that's a positive variance of $180,000. That's due to the sale of surplus equipment. It's hard to judge year to year what equipment we're going to sell, so that one, we're coming in higher than what we have budgeted. Intergovernmental, and then I want to point your attention to the investment income, where it's showing a $1.4 million positive variance. This is overstating our positive variance at the time. This is, it's an accounting entry. This is, if we were to cash out our bonds and sell today, this is where we would be. This number may grow next month. It could go away next month. It's just the volatility of the market. So just keep that in mind. Other financing sources, we're right there. And then other income is due to miscellaneous income. We have a question on this slide. Okay. Councilman Brown. Thank you, Chair. On the investment income, you just explained part of it to me, but you got the $1.649.000 actual. Are you saying that's an accrual amount? Yes. It's just an accounting entry. Did you budget on the cash basis on that instead of accrual? I would have to double check on how we budgeted that. That's a big difference there. It could be your accounting if you go to cash to accrual. It looks like we didn't even predict. We traditionally budget very low on that because we're not trying to predict whether the market's going to go up or down. And we have laddered investments so that we know when they will mature. And so our volatility really isn't reflected accurately with this, but we're required to record it for gap purposes. Well, but the question is, did you budget cash or did you budget accrual? We didn't budget either way. We budget very little. Okay, thank you. Anyone else on this slide? Okay, keep moving. All right. This is the expense side. We have a positive variance through May of $7.7 million in personnel and also the same in operating. Debt service, we have a $200,000 variance there. That's savings. Partner agencies, that's a timing difference. Insurance, we're within a dollar, so I feel like we're doing pretty great budgeting there. And then operating capital, we're just spending ahead of where we had anticipated. The operating variance is due to professional services, utilities, repairs and maintenance, kind of the same three categories I talk about every month up here. Now, you all did the reallocation, so we've got to take that off. So our change in net position is $19 million of a positive variance. We reallocated $10.6 million of that. So our current variance, when you take the reallocation out, is $8.5 million through 11 months. Thank you. We have a couple questions on that. Councilor Maloney. Thank you, Melissa. I'm not going to pick on you now. You know what I was going to say. But the question I have is we haven't done the month of June, so we should be getting additional funding coming on top of the $8 million that we're looking at right here. When we just did the budget, we said we only had $800,000 worth of general funds to play with before we get to the 1.5. So that $800,000, when we come in October, that $800,000 won't have anything to do with our total budget. This would be the general fund. The $800,000 is completely separate. Completely separate. So we could have anywhere close to anywhere to $10 million surplus around October, May. Potentially, yes. But you did budget $1.5 million beginning fund balance, so that will have to come off of that number. So the 1.5 will be in that 10 million. The 1.5 will come off that. So it will be a 5.5, or it could be more. We don't know. Correct. What was the number that we had two months ago? The last month that we came in, what was the, for the month of April, how much were we at? April. Was it $15 million or something? At April, we were, before the reallocation was $12,896,000 with a variance of $2.2 million. So $12 million we had? Yes, in April. And then it grew in May. So we made a considerable amount of money in the last three months. We did. But in April, that was the first month of the quarter, so there are lots of issues with the revenue payments coming in on time because they're delayed. So that's one of the reasons why we had such a big shift from April to May. Okay. I appreciate it. Thanks. Council Member Brown. Thank you, Chair. One question. It might be for Bill, Commissioner O'Mara. On the operating expenses, of course, we're passing a lot of things in June as far as encumbering monies. Will that be reflected in the actual dollars? No. Encumbrance? Encumbrances are not included in the variance. So if money is encumbered, the only money that's in the actual is money that's been expensed out the door. So how will the encumbrance affect this particular fund balance amount? If there is an open PO that they choose to roll to the next year, that would reduce that number. That's what I thought. Okay. Do we know anything about what's going on there? I have not been working on that. Bill might be able to give an idea on that. Because I know we're passing things now. We're encumbering money here in June, the last couple of meetings. Actually, we're looking at it weekly, and as you can expect, the numbers are moving very rapidly. Yeah. And so we're going to be watching it for the rest of the month. So there is going to be some encumbrances that would affect our fund balance. Yes, sir. Okay, thank you. Anyone else? Okay, continue, please. Melissa. The next two slides are just comparing the current year to the prior year. We would expect that we would have a $13 million variance because our budget was increased from last year to this year. And then the same with the revenue side. So any other questions? Any other committee member have questions on the monthly financials? and this is also in relation to the sanitary sewer and water quality and landfill funds as well that are next in our packet so if you have questions on those committee members if you'll chime in they're in the packet for information anyone all right thank you all thank you commissioner all right next on our agenda is a continuation item that was continued from our March 17th committee meeting. Again, we've been in Budget Committee of the Whole since 1st of April, so this committee did not have an opportunity to meet until now. A couple things on our agenda. We did have a public comment session on June 8th, which was well attended, and it was actually a committee of the whole where all the council members were invited and all attended to hear public comment on the issue. Next on our agenda, I want to invite two guests from down the road at the University of Kentucky. They're no stranger to government. We recently utilized Dr. Ken Trosky when we put together this budget. So for those of you who don't know Dr. Trosky and Mr. James Zilliack, let me give you some background on both of them before they begin. Dr. Trosky is the senior associate dean and the William B. Sturgill professor at the Gatkin College of Business and Economics at the University of Kentucky. He was also recently awarded, and congratulations publicly, the William E. Lyons Award for his contributions to our city and our state and his work, as well as at the same time, Mayor Greg gave him the Henry Clay Ambassador Award in recognition of those achievements. He's also a member of the Federal Reserve Bank of Cleveland. He's a member of the U.S. Congressional Oversight Panel, and he's also a conference on research on income and wealth. and his main focus of work is on labor economics, low-skilled workforce, and welfare to work. He's also appeared in many of the economic publications and national media such as U.S. Today, Washington Post, Wall Street Journal, Fortune, Bloomberg Business, NBC, ABC, and CBS News, CNN, and Fox News. Mr. Ziliak is the Gatton and Dow Chair in Economics at the University of Kentucky, and he's also the Director for the Center for Poverty and Research from the University of Kentucky. He also specializes in the expertise of labor economics, poverty, food, insecurity, and tax and transfer policy. Gentlemen, welcome, and thank you for being here. I'm sorry if I abbreviated it. I just want to get on with our meeting. So if there's anything you'd like to add during your comments, please do so. And you have 15 minutes. This is our normal presentation time. So if you'd like to begin. Okay. So I wanted to present a little work I've done on understanding and studying the minimum wage. As you know, a number of communities around the country have recently raised their local minimum wage, and of course this is an issue in Lexington in front of LFUCG. Argument is often made that raising the minimum wage is a way to help the working poor. So basically what I wanted to do is try to understand the efficiency of raising a minimum wage in terms of accomplishing this goal. How does it affect poor workers, and how does raising the minimum wage help poor workers? And maybe talk both myself and I know Professor Zeliak is going to talk a little bit, too, about alternatives to the minimum wage that might better assist poor workers. I'm going to do a pretty similar analysis. I know that previously you had an analysis done looking at data from the 2013 American Community Survey. I'm going to use the same data and apply a fairly similar methodology to looking at those data, similar rules in selecting the data. Two differences I am going to make is I am going to include both federal, state, and local workers in my analysis because the ordinance does not exempt those workers from minimum wage, so I felt it was appropriate to include them. I'm also going to make no restriction on the number of hours that people worked when including them in my analysis, and you'll see why. I'm going to break the world into several different groups, but the important groups I'm going to focus on are what I'm going to call low-wage workers. And those are workers who currently, or at least in 2013, earn less than $10.10 an hour. Those would be the workers affected by an increase in the minimum wage. And then I'm also going to focus on poor workers. That is, individuals who work who also live in families below the federal government poverty line, what we call poor households. The poverty line is something the United States government creates every year, and it's based on the number of individuals in a household and the total income of the household. In 2013, a family of four that earned less than about $23,000 was considered poor. That doesn't vary across the country. There's no adjustment for where you live. So it's $23,000 in Lexington, and it's $23,000 in Los Angeles, $23,000 in New York City. And basically, I'm just going to present some statistics, again, using these American community surveys, and compare low-wage workers, essentially, to poor workers. And the first thing that becomes apparent is there are a lot of low-wage workers. They're 43,000, at least in these data. Poor workers is a much smaller population. There's about half of that, so a little less than $20,000, about $18,000. Fairly similar in terms of ages in these two groups, although low-wage workers do tend to be a little younger than poor workers. Poor workers are much more likely to be between 20 and 29 than low-wage workers. One thing that's sort of interesting, And one of the things that's unique about Lexington, of course, is because we have a university here. And so there are actually a fair number of people who go to school here. And that sometimes plays a little havoc. You've got to be careful with our data. And you can sort of see this here is that a lot of poor workers actually indicate they're enrolled in school, much more than our low-wage workers. This is something I do think it's important to recognize, too, is that workers who have wages under $10.10 an hour work about 1,500 hours a week, so not quite full-time, and have an hourly wage of $8.11. So they're about $2 an hour below the 10-10 limit. In contrast, workers in poor families average about $13.79 an hour when they work. The problem, or the thing is, they don't work a lot. which is actually one of the things that contributes to them being poor, is poor workers tend to have very low income earnings simply because they aren't working much. They work about 960 hours a week, about 28 hours per week, and about 34 weeks out of the year. So wages above 1010 an hour but are poor because working few hours. There's a lot of reasons why they're working a few hours, and we'll discuss that in a bit. Again, low-wage workers tend to come from families with incomes of about $34,000, $35,000. No one would consider that wealthy, but certainly that income would not be below the poverty level, certainly given that they have about two people in the household. In fact, as I show at the bottom of that box, about a third, 33%, of low-wage workers are living in poor households. In contrast, poor workers obviously have very low wages, less than $10,000. They're also much more likely to have children living at home and are much more likely to have children less than five living at home. You see this again when you look at the types of households that they're in. Poor workers tend to be in households. About a fifth of them are in households where there's one worker, they're single, and they have kids. So that vision of single-headed household certainly fits when you talk about poor workers. In contrast, when you look at low-wage workers, much fewer of them, less than 10%, are a sole earner in a household with kids. Almost a fifth of low-wage workers are living with a parent or a relative, and about 25% or a quarter are one worker in a family that doesn't have any kids, and about a third of them are living in non-relative households. So much different type of household arrangements. We know from previous work that minimum wage workers tend to be young. We see that here. Either still in school or just out of school and just starting their career. One thing I think it's important to recognize is that most minimum wage workers transition out of the minimum wage within a year. So about 60% of workers earn the minimum wage for less than a year. And that seems that the minimum wage workers in the nation tend to look fairly similar to minimum wage workers in Lexington. I think one of the things I think is important to recognize is that poor workers look a lot different than low wage workers, which means that when you raise the minimum wage, you don't have a major impact on poor workers. Again, on average, they earn above $10.10 an hour. They're poor because they're not working a lot. Since they're not working a lot, seeing an increase in the wage isn't going to affect them very much. Poor workers are poor for all the reasons that people live in poverty. They face significant barriers to employment. They have child care costs. They have little education, disabilities. Some of them are struggling with substance abuse. There are a variety of reasons why individuals are poor. wage is not one contributor, but doesn't seem to be the major contributor in this instance. And the problem is increasing the minimum wage really provides very little assistance in helping these individuals overcome these barriers. So there is a substantial body of evidence that if you increase the minimum wage, some people will lose their job. And I list a number of papers within the last two or three years that suggest that. A conservative estimate, particularly for a local wage increase, either a state or a local minimum wage, is around a 10% increase in the minimum wage, results in about a 2% decline in employment. And so if you use that 2% decline in employment, you can see that if you raise the minimum wage from the current wage to $10.10 an hour, that estimate would be about 2,200 people would lose their jobs. Of course, there's 43,000 people that are earning below the minimum wage, So that means about 41,000 people are going to see an increase in their wage. So part of the problem is trading off the loss in income for those 2,200 people with the gain for those 41,000. It's important to recognize that when you raise the minimum wage, when wages go up, the cost of that has to come from somewhere. And so one of the things that I did is assuming this 2% fall in employment with a 10% increase in a minimum wage, we can calculate simply how much wages are going to go up for those people who keep their jobs, how much shall go down for those people who lose their jobs, and on net, what the overall increase in the wage bill would be. And so if you take, basically, you take the number of hours people work in a year, how much are you going to have to increase their wage to get it to 10.10 an hour? Do the math. It's pretty simple. Increases in wages for workers who keep their jobs is going to be about $117.5 million on an annual basis. The decrease due to people losing their jobs, the 2,200 people who lose their jobs, they're going to suffer a wage loss of about $25 million. So on net, the overall increase in the wage bill associated with an increase in the minimum wage is about $92 million a year. So again, that's taking the minimum wage from $7.25 to $10.10 an hour on an annual basis. That's the sort of increase you're going to see. So this $92 million represents essentially the tax necessary to raise the minimum wage to $10.10 an hour. Minimum wage, increasing the minimum wage, again, because of the characteristics of individuals in poor households, has a fairly modest impact on the poverty rate in Lexington. One thing we know from other research is that when you raise the minimum wages, that increase in earnings that business owners pay their workers is typically passed on to the consumers in the form of higher prices. They've got to get the money from somewhere to pay the higher wages. The problem is that most minimum wage workers produce goods that are consumed by workers in poor households. So essentially, this tax is a larger share of this tax is paid for by low-income individuals, because those are the people that are consuming the goods that are produced by minimum wage workers. So essentially, the minimum wage is a regressive tax, primarily on low-income workers. And it primarily impacts small businesses. It's not Walmart or Home Depot that is paying this. So the bottom line is increasing the minimum wage helps some workers, certainly hurts other workers, really has a very small impact on poverty and individuals, the working poor. And in essence, that's the concern most economists have about the minimum wage. It's a very, very, it's an expensive, somewhat expensive, but very inefficient policy if what you're trying to do is improve the well-being of poor workers. There's a variety of other policies that ample research has shown has had much greater impact on poor workers. For example, the earned income tax credit that's been increased several times recently in the Clinton administration had substantial evidence showing that this has had a significant impact on poor workers. Other programs that are obviously clearly beneficial are improving overall education, obviously something we're discussing in Lexington currently, and job training as well. These are other policies in which address those issues of the skill deficit that are contributing to poor households. So in the end, raising the minimum wage doesn't address the fundamental problems that confront most poor households. Significant barriers to entry into the labor market, very few skills and little education. So if what we want to do is find some way to help the working poor of Lexington, this is just simply not the most effective way to go about doing it. There are lots of better ways that myself and Professor Zilliak have extensive experience studying. And in the end, the question is, do we want to adopt a fairly inefficient policy, Or would we like to try to find some more efficient method for helping poor workers? And the bottom is, what are we really trying to accomplish with this policy? So with that, I think I'm going to turn it over to Jim. Unless there are, do you want me to address questions? Or do you want him? We'll wait till you're both done. Then we'll address them. I have a couple of slides. They're not in the packet. I don't know if it's allowed to show them or not. It can be easier. Mr. Chairman and members of the committee, I want to thank you for the opportunity to appear before you to discuss the minimum wage. My name is James Ziliak. I receive no financial support from my testimony beyond my normal duties as a member of the University of Kentucky faculty. My views are my own and are not to be attributed to any official views of the university. Many of our fellow citizens continue to struggle to gain economic traction some six years after the official end of the Great Recession, and I applaud recent efforts of the Council to address some of those challenges. The minimum wage is one of the more contentious economic policies nationally, in the Commonwealth, and now in our own home in Lexington. Many views have been presented before you in recent weeks, often in stark black-and-white terms, either very rosy or very doom and gloom. The economics of the issue, however, spelled out by Dr. Trotsky, are decidedly gray and murky. Scores of research papers have been written on the minimum wage, highlighting who wins and who loses. The bulk of the research suggests that poverty will fall, but so will employment. Prices of goods, especially those purchased by low-income persons, will rise, but earnings inequality will fall. Individually, each of these effects is small in magnitude. Less well documented is how take-home pay changes with the minimum wage. As low-wage workers' labor market earnings rise, how does their tax liability change? How does the assistance from the social safety net change? To help shed light on this, I conducted a number of simulations to trace out how earnings and disposable income change, with the increase in the minimum wage from $7.25 to $10.10 an hour. I simulate the effects for a quarter-time worker that is 10 hours a week for 50 weeks, or $500 per year, a half-time worker at 20 hours per week for 50 weeks, and a full-time worker 40 hours per week for 50 weeks. The simulations are conducted for a single childless person, a single head of household with one child, a single head with two kids, a married couple with one child, and a married couple with two children. I assume both spouses work at the minimum wage. Disposable income is defined as gross earnings plus SNAP or food stamps plus KTAP or TANF plus the earned income tax credit and the refundable child tax credit. Those are federal programs, minus state, local, and federal tax liability. Because of limited time, I focus on a scenario where workers supply the same hours of work regardless of the wage. While there's evidence that workers increase hours worked when the wage increases, a note in passing that while the magnitudes you're about to see will differ, the pattern of results are unchanged. With no behavioral response... I hate to interrupt, but your all's total 15 was up, and this is a council member that's willing to motion. All right, I have a motion in a second. Anybody have objection? Five more minutes? Sure, no problem. Thank you. Sure thing. So in the table on the overhead here, we're looking at a poor town worker. This is somebody who works 10 hours a week for 50 weeks. For this individual, the take-home pay, the earnings increase 39% from the minimum wage increase, but the take-home pay increase is just 19%, or just under half the minimum wage gets passed through as higher income. For a single parent with one child, take-home pay increase is just 12%, and if there are two kids in the home, disposable income increase is just 10%, or roughly one-fourth of the original minimum wage increase translates into higher take-home pay. Things are a little bit better for a married couple. Why does this happen? Because as the worker's earnings increase, there is a change in the benefit that they get from the earned income tax credit and the benefit they get from food stamps and the benefit they'll get from KTAP. Next we have for the quarter time worker, and here you can see that things are a little bit better, that they're taking home a little bit more of that 39% increase in pay. Again, this is all a function of the tax and transfer system that these individuals face. Now, when you look at the full-time worker here, you can see that things are a little bit more mixed. You can see that for a single individual with no children, most of the minimum wage increase passed through because they didn't qualify for any public assistance benefits even at $7.25 an hour at 40 hours a week. However, things are less rosy for the single heads with one or two children. They're only going to take home 11% or 13% of that 39%. And with married couples, it's only 9%. For certain, these individuals are better off because after-tax income is higher, but the increase is considerably less than one might hope with the initial 39%. So the key takeaway is that when a minimum wage increases, there are complicated interactions with the tax and transfer system that differentially affect families depending on the number of kids and the number of adult workers. Collectively, you could say the economics of the minimum wage earns a grade of meh. There are winners and losers, and the magnitudes generally have been small based on a historic experience. I say this as one of the 600 economists that signed the petition calling on Congress to raise the national minimum wage to 10 to 10 an hour. I'd likely sign the same petition if it were aimed at raising the Kentucky minimum to $10.10 an hour. However, the implications for raising a minimum wage in a location like Fayette County are a lot less certain. Why? Because our evidence base is much less certain, and frankly, non-existent. Why? Because city-based minimum wage are a new territory for the country, aside from some targeted living wage ordinances. We can be fairly confident that local minimum wages of the magnitude before the council will not result in massive closures or employment losses, nor will it make a significant dent in poverty. Where we are less certain is how they will balance out compared to a state or federal minimum wage. This is because as a city, we face much more competition than either a state or a nation. Lexington operates in a system of cities across the country, competing for jobs and tourists, and how a local minimum affects that mix is just not known. I felt comfortable signing the national petition for a minimum wage increase because of my read of the evidence fell in its favor. There is no hard evidence at the local level. Now, there are certainly areas a city can address where evidence leans towards a more targeted, efficient outcome of improving the lives of the poor. For starters, improving take-up rates of food stamps in the EITC is one area. These are federal programs that have been proven effective at reducing poverty, and the city is leaving money on the table by not making sure all those who qualify are signing up. The city loses because this research shows that SNAP and the EITC are benefits paid federally and spent in the local economy. Child care is one of the main hurdles facing low-income families and a significant barrier to work. Exploring ways to expand access and affordability to quality child care would help many of our low-income families. Likewise, early childhood education has been shown to have lifelong benefits in terms of improved education attainment and earnings and reduced interaction with the penal system. Moreover, high school graduates do better in the labor market than those of the GED, and college graduates do better still. So improving high school and college completion will make the city much more competitive and successful in the long run. The city's made strides in recent years on improving the lives of the poor, and there remain many opportunities to build on that success. Thank you. Thank you, sir. committee members and first before i'd like to welcome our newest committee member miss lamb welcome this is your first meeting so welcome to our group and then also committee members who are not actually on the council members who are actually not on the committee mr james brown mr gibbs and siobhan acres thank you for being here as well for this discussion so if you anyone has any questions for either of our presenters please chime in on the voting board first up we have vice mayor Kaye thank you chair thank you for the presentation I do have a few comments and then a couple of questions and what I'd like to do is if I can is go back to the slide presentation starting with it's 28 in the packet it's the fourth slide Stephen, can you do that for us? Okay, thank you. So, page 28 in our packet or page, fourth slide. Thank you. So, a part of what I think is difficult for non-economists, including myself, to kind of understand and continue to pay attention to is what we're really talking about when we talk about these groups of individuals. So on this slide, we have minimum wage workers are raising the minimum wage from $7.25 to $10.10, and we have low-wage workers who are defined as earning less than $10.10 an hour. And a part of my concern about the slide presentation is the difference between minimum wage workers and low-wage workers is hard to follow and perhaps points confusing. In addition, poor workers are defined as living at just under 100% of the poverty line. Most people who work with low-income individuals and communities take at least 200% of the federal poverty line as referring to people who are low-wage workers. So some of the data is based on only people who live below 100% of poverty, and some of the data is based only on people earning a minimum wage as opposed to less than $10.10 an hour. On the next, on page 34, the 10th slide. On the second bullet, which suggests that a 10% increase will cause this fall in employment, my understanding is that those statistics refer only to the people who are teenagers in the total population. You can respond to that later. and the estimate of how many people would lose their jobs in general, whether those statistics are correct or not, seems to be refuted by most of the studies that have been done and people refer to meta-analysis and that's essentially where people look at all of the studies that have been done. And the consensus is that the impact on job loss is minimal to none. On page 38 of our packet. Are you going to, am I going to respond? I'm going to ask you, when I'm done, I will ask you a couple questions, if that's okay. Okay. I want to finish my comments. So this is page 38. Yeah. That's not page, we haven't got it. Slide 14 or page 38. Yeah, that's the one. In the second bullet, it says these goods are predominantly consumed by individuals in poor households, which is probably true. But what's not true is that these are the predominant costs for people who are at the low end of the income scale. Housing is known to be a significant cost for these folks. Transportation is significant. These are things that basically will not be affected minimally, if at all, by raising the minimum wage. Those are not dependent upon a lot of employees. On page 39, I'm going to run out of time. So let me, I have a few comments, but I'll come back to them. But my questions are on pages 30 and 32. And on page 30, there's the 1379, which is the hourly wage rate for people below the poverty line. I just can't figure out how that number makes any sense, and I just need to know what it's based on. And then secondly, on page 32, I would like to know, so, well, let me get it up first. Can we briefly get that page 32? Well, while we're waiting to get it up, my time's running out. It basically says minimum wage workers tend to be young. That's the people who are right at the minimum wage. That is not referring to the cohort that exists between minimum wage and 10-10. Those at the very bottom tend to be young. And finally, they earn that for less than a year. That's people right at the minimum wage. They typically stay at that level for less than a year, but they are still well below 10-10. So they will be affected by our proposal. My time is up. I'll come back. Thank you, Chair. Did you want to answer your question? You want to come back and ask it again? I'd like an answer. Dr. Trostman? So just to try to clarify, what I did was similar to the analysis that was done previously, I took the American Community Survey and all of the workers that live in Lexington, Fayette County. And then what I did was I looked at individuals who earned less than $10.10 an hour, and I called those low-wage workers. Those are the individuals that would be affected by an increase in the minimum wage. It's not simply people at $7.25. It was people that earned less than $10.10 an hour in those data in 2013. So that's who was in that analysis. And I chose 100% of the poverty line. I also looked at 200 and 400. I mean, I do think it's important to recognize, in terms of the government poverty line, that in Lexington, a family of four earning $23,000 a year is living in poverty. 200% of the poverty line is $46,000. Not huge amounts of money. But in Lexington, the rule of thumb of 100% or 200% or 300%, those are rules of thumb that are often used in places that have a significant different cost of living than Lexington did. Had I chosen 200%, the data wouldn't look all that much different. Again, the calculation of average wages is pretty straightforward. If you take the data and you take a worker who lives in a poor household, And just like I did with the minimum wage workers, usual hours work per week, annual earnings, you do out the math and you come up with an average earnings of $13.79 an hour. That's just what they earn. They just earn $13.79 an hour, but they don't work a lot of hours. So they are poor simply because of the number of hours that they work. That's just how that works out. It's just what are in the data. In terms of the meta-analysis and the discussion that you have, I don't know whether you've read the paper that you're referring to. The paper you're referring to was produced by an economist at, I think it's Hickson College and then another one at Deakin University in Australia. They've chosen 64 papers. If you've read the paper, what you'll find out is if you just take the 64 papers and the estimates that those 64 papers produce or report, That estimate is approximately the estimate that I used. What those folks do who did that analysis then is they claim that the papers that are published are not representative of all the research that's done. They don't list the research that's not published. They use statistical methodologies, and then based on their statistical methodology, once they apply those statistical methodologies, then they come to the conclusion that once you've adjusted the 0.2% down far enough, you come to an estimate that suggests that the minimum wage is small. Most people wouldn't. I certainly don't subscribe to the analysis that they did, and I think it's fairly clear that typical people who have done research in this area, that's not a wildly cited paper and not a wildly read paper. And given some of the questions, it's hard to know how much power they have to distinguish between 0.1, 0.2, or 0.3 percent decline in employment with a 10 percent increase in the minimum wage. So I'm not a big fan of that paper. You know, having read it, I'm certainly aware of it. But again, if you just take the 64 papers that they look at, my estimate is well within the range of those estimates that they produced. Was there anything else that you wanted me to address? I hope to chime back in in a minute. Councilman Bledsoe. Thank you, Chair. Thank you so much for this presentation on both efforts. It was very helpful. And I do have some questions. As I've talked to people in the district and other interests about, there's the idea of minimum wage, just in theory, and there's the implementation thereof. And I think you brought up some very interesting points and some questions I had. And, you know, my office did a lot of research trying to figure out how we do this. If there are comparative cities who have payroll like ours, where 80-some percent of our city is paid or is, you know, financed through payroll. And then, two, have such a regional approach, meaning 100,000 people flood into this county to work, school, play, spend money, et cetera. Have you done any studies on how this would happen if we do this in Fayette County? I couldn't find anybody who's done it successfully. Do you have any? I didn't hear you say there's no one else who's done it. Of our size, no. Nobody's passed a minimum wage of a city of our size. There's been some living wage ordinances that have affected more targeted sections of the labor market, but not a city of our size. Okay. I was glad you couldn't find it, because I couldn't find it either. I wasn't sure. I'm going to put up a slide that we looked at. And I only throw this out there. We did some research trying to figure out, again, ideas have consequences. And this is very rudimentary. We looked at what is our current proposal, played out some different things, meaning how this ordinance is set up, where you start a minimum wage increase, if it is tied to CPI and for how long. it does have significant implication, if you play it out. I did not look at, of course, the West Coast. I think their cost of living is much higher than ours. It's a vastly different economy than we have here. So I particularly looked at West Virginia, Michigan, Ohio, and ours, and tried to figure out, in essence, how do we compare? And I just think it's important to note for my colleagues is that we don't operate in a vacuum. What we do here and how we proceed does have competitive issues, does have regional implications. And I believe if we did this, we'd be the highest wage, over like a 250-mile radius, which is significant. So I have this just kind of as thought. I don't know if you have any reaction to what I've thrown up there, but I think it's important. I would agree. We operate in a competitive market, which was one of the points I made. And so in that light, you have to be cognizant of what your competition is doing when you change policy. Thank you. I really appreciate your thoughts about the workforce development and targeted workforce. I think sometimes we're not sure necessarily how we're affecting who we're affecting. What I like about a targeted workforce development strategy is we do know who we're trying to get a hold of and how we're able to help. in some of these minimum wages we don't, especially given the regionalism that we operate in. I think it's very hard to track for our own constituents. And I guess the closing comment is just that I just think it's important that we note. Back in February, when we put right to work and minimum wage into committee, there were members of this committee who said, I don't want to talk about it because there's a lawsuit. And yet here we sit with a lawsuit on the same issue, and I just think that's somewhat hypocritical, and we should at least acknowledge the fact that we're discussing it. And I'm not going to bring it right to work until that lawsuit is completely done. I don't think it's out of just courtesy to our committee. I just thought it would be worth noting. Thank you very much, and I really appreciate your research. Thank you. Council Member Farmer. Thank you, Mr. Chair. Gentlemen, thank you for your time and your expertise. It's been a long time since I sat through a class at UK, and you may have noticed I did yawn a couple of times. Let's go to 42 and 43. I just want to ask for just a little more interpretive value. Poor Lexingtonians are poor because they have few skills, very little education, and often face significant barriers to employment. Raising the minimum wage does not address these fundamental problems. Can you make that statement? I mean, can we quantify that for sure? If you look at individuals in poor households, you will find that, yeah, they have little education, are often, as the data suggested, a fair number of them have young children at home. I think there's ample research that suggests that and that does demonstrate that individuals in poor households, and I think Jim is, actually, Professor Ziliak has what I consider, One of the best papers on persistent poverty that I've read in a long time, he and a colleague, Jenny Muneer, and a graduate student, Tanmoy Ishma, they show that 50% of you can attribute about half of long-term persistent poverty in an area to low education. And so, you know, it's overwhelming support to suggest that the best way to move people out of poverty is by providing them with the skills that allow them to enter the labor market, earn a wage that they're going to be able to support the family, and cover the actual costs of working, because the costs of working can be substantial, as everybody who does it knows, especially with children in the household. I think it's great when you say education is the answer. You're pitching for the home team there, aren't you? Well, you know, it is a little inconsistent. You know, I am obviously a firm believer in education. That's what I've devoted my life to. But I think the evidence is pretty strongly in support. And I've been pretty consistent in the 10 years I've lived in Lexington. That has been a fairly common theme that I have. I've appreciated many of your analysis, and you've helped us several times during our budget discussions, and I'm still very appreciative of all that. So then on the last page, if we're truly interested in helping poor workers, we should spend our efforts addressing the lack of education and training, not trying to fight the fact that people with few skills receive low wages. Okay, quantify that one for me too. And I guess when you say quantify it, I mean, essentially, part of the concern that I have is raising the minimum wage involves costs. It involves a significant amount. It's $92 million. There are, if we're going to impose those costs on individuals in the community, I would think we would want to try to adopt the most efficient programs, the most cost-efficient programs in truly trying to address poverty. I would suggest that better uses of that money would be improving the school system in the area. I've done extensive work on job training and job training in this country, and I can assure you that that amount of money would go a long way in terms of job training programs in the U.S. We typically spend about $3,000 per person per year on job training in the United States. I think you could do a much better job of training low-skilled workers, providing meaningful skills if that's what you were going to devote your money to. Well, then let's turn the last one around as opposed to what are we trying to accomplish If we raise the minimum wage, what would it accomplish? I think my analysis suggests that you would see an increase in wages for individuals who kept their jobs. You would have some people who would lose their jobs. You would have a very small impact on poverty. I think Jim's analysis suggested for most of the households that you're going to raise income by 40%, but they're only going to see about a 10% to 12%, 10% to 12% or maybe 20% take-home pay. so about half of it is going to go up. And I will say that Jim hasn't taken into account, and nor should he have, the increase in the prices of goods that these individuals are going to consume. And admittedly, it's not the largest source of goods that they purchase, but that's how that money is being financed, is low-income individuals are paying higher prices for goods. And so there's just a much, I would argue, a much better, much more effective, much more direct way of trying to accomplish it. I don't think this program accomplishes, if the goal is to help poor workers, I don't think this accomplishes that goal, in my opinion. One final question, then. You've been following the events in Louisville, I assume? Mm-hmm. So they passed an ordinance, and it is in effect at this time? I don't think it's moved all the way. I haven't followed completely. I believe it was being phased in. I'm not sure whether they've even raised it. July 1. July 1. Okay, so no, it has not been. So it was not. And how would, I mean, I think my time is up, and I'll stop there. Thank you very much. Thank you, Council Member. Council Member Fred Brown. Thank you, Chair. Gentlemen, thank you. That was a good presentation from what information that you needed to present. Are both of you gentlemen economists? Yes. My question is, did you take into consideration supply and demand in the market when you were doing this analysis? Yeah. Yeah, my basic statement that when you raise the price, you'll see people fall is based on the fundamental belief that demand curves slope downward. So, yeah, I used Econ 101 or 201. Well, I'm glad. I hope you're still teaching that. Whatever economics you guys took when you were in the U.K., I believe 201 probably. Well, I hope you're still teaching supply and demand because it seems to be one of those things that's, you know, not in everybody's mind. Something an economist is going to move away from any time soon, I can assure you. Good. We still lean pretty heavily on the supply and demand, and I think both of us were relying on supply and demand. In your analysis, did you account for any type of monies that teenagers and young adults make? I don't want to, I guess for lack of better words, under the table. There's a lot of monies earned out there that are not reportable through the system, the state or the federal government. I would assume you wouldn't have that information. No, I mean, again, I— Because there's a lot of it out there. The analysis that I did, again, is similar to what others have done. I used data that came from the United States Census Bureau, and it's self-reported information. It's got some issues, too. I mean, let's be clear. I would love much better data sources that had more complete information. So actually the hourly wage amount would go up probably if you had the input data for it. Well, you know, I think you need to be careful. There's a lot of income inequality in illegal activity. There's a famous economist, Stephen Levitt, at the University of Chicago has shown that the drug kingpins make a lot of money. The lieutenants aren't doing all that well, and they're working long hours. And it's kind of a dangerous occupation. Okay. But there's additional monies that you couldn't account for. There is an underground economy that we are not taking into account. Exactly. This is a comment. You don't have to answer this. I take issue with maybe using the word poor. I would like for us to be able to identify these individuals without stigmatizing them. That's me personally. I wish there was another name you could apply to that. Now, that's just me. Maybe nobody picked up on that, but that's just a comment. Thank you, gentlemen. Next up, we have Council Member Maloney. Thank you, Chairman. I want to thank you for your presentation. I also want to thank Mr. Bailey for your presentation, because when we had your presentation, I had some questions that I was concerned about. I'm coming from a different standpoint than a lot of people because I've dealt with low-income people for the last 30 years. One thing I'm concerned about is how many people are going to lose jobs. And some of my colleagues say it's a very small percentage. And getting the numbers that you got, and Mr. Bailey said there will be some jobs, and you get an actor to work. I don't know if you're just. But you're claiming if we raise the rate next year to whatever it is, it would go 850, and then the following year when we raise it up to 915 or whatever, a thousand-something will lose our jobs, and then when we finally get to 1010, over 2,000 people will lose their jobs. Is that the numbers you're looking at here? Basically, what I did, I did not follow the order. I just said if you took $7.25 and raised it to $10.10, this is the number of people that would lose their job. And let's be clear. Of a 10% increase, I said 2% of the people would lose their job. That's a pretty small number. I mean, most people are going to keep their jobs. And so, you know, I'm not going to stand up here and say there's going to be a huge number of people losing their jobs, 43,000 people earning less than 10, 10 an hour. 2,000 people lose their jobs. That's not a huge number, but it's the question of, are you doing a lot of good for when those people lose their jobs? For the cost that you're paying, are you producing a lot of benefits? Because there is a cost. Those 2,200 people, you know, I don't know how to weigh what they lose versus the gains that you have. That's not something we do in economics very well. Well, let me ask you this question. If the state passes a minimum wage, would this many jobs be gone? Yeah, there are a lot more people in the state. But in terms of a percentage? It would consist across the state. It probably might be somewhat similar across the board. Yeah, I think that the evidence suggests that it would be. One of the papers that I showed is a paper by the Congressional Budget Office. It was produced in 2014 that analyzed the national minimum wage. I mean, I would refer you to that. I mean, in my opinion, that's one of the most even-handed, objective things that I'm looking at the impact of a national minimum wage, not a local one, but a national one. They have smaller percentages in their report in terms of the percentage of people that would lose their job if, as a nation, we raised the minimum wage from $7.25 to $10.10 an hour. That's, again, what produces Jim and I are a little different. I didn't sign up. I wasn't one of the 600 economists that signed that petition. I probably wouldn't have. He was. There are others like Jim who signed the national wage petition. Harry Holzer being an example in Washington, D.C., has come out publicly against Washington, D.C. raising the local minimum wage. But the advantage of a national minimum wage is it's harder to relocate to other countries than it is to other states. Just a fact of the matter. Or other cities. And I'm going to make a statement here. That's just my opinion. If you raise the state minimum wage or the national minimum wage, I think Lutton's going to be in great shape. I think people want to stay here, live here. But I do have concerns about the 2200. I mean, I've been straightforward with everybody. I met with all, everybody understands where I'm coming from. And if it's one person that ends up losing the job, I've got a problem with that. I had an impact if I passed this. But also, I understand some of the other council members are looking at the number ratios in the middle, which, that's fine. I look at people's lives every day, how low they are or whatever. I have concerns about it. If I have affected anybody's life, it concerns me. and i appreciate your answer there and i think these are some of the concerns that i have and hopefully we whatever comes out of this we'll be able to hit these issues but i would love to see the state pass this minimum wage because i think it'll solve a lot of everybody's problems council member gives thank you chair um like vice mayor kay i'm concerned about some of the things in the the presentation, particularly, again, the emphasis on people below the poverty line. I think there's a lot more to this proposal than just below the poverty line. I'll come back to that. But I want to say a little bit more about what Vice Mayor Kay said about the slide 8, about 60% of people who get minimum wage jobs and they're no longer at minimum wage in less than a year. I found that downright misleading, to be honest. If somebody went from 7.25 to 7.50, and the implication here is we're not supposed to be worried about it. Let me continue. Thank you. Just to be clear. That's what your slide says. The statement was that it was people right at $7.25 an hour. That's actually not the analysis that was done. It was people who were at minimum wage and below the minimum wage move above the minimum wage in a year. So it wasn't quite as stark as he's making it, as was the statement. Okay. It wasn't quite as stark as you made it. Thank you. There's a group of people I'm concerned about. But a lot of times we talk about young people in the minimum wage, and people say, in essence, they're just kids, and they don't deserve a significant amount of money. And I think there can be real impact here. I don't want to talk too much about myself, but I started working in 1969. The minimum wage was $1.60. You just add it for inflation, and it's about $10.30 in that range there. When I was making $10.30, I became largely independent of my lower-middle-class family. I reduced the burden on them significantly. I stimulated the coffee, I stimulated the bookstores and the record stores. I also saved a significant amount of money for college. I saved enough money for college to put myself through the first year, and then my minimum wage job in college had significant impact in paying for it. I don't know if you saw the article in the Herald-Leader the other day, but going to UK where you guys teach, if you stay on campus, you're talking about $26,000 plus per year. And so I think there's a real advantage to paying young people an amount of money, And even if they're not low income, I think we need to broaden this discussion to more than just the people in poverty. I'm sorry, Mr. Zaytek? Ziliak. I apologize profusely. I appreciate you signing that letter along with the other 600 economists. You said if we raise the minimum wage 39%, the benefit will be 10% at least. I think 10% is a decent benefit. I'd be going for that. I appreciate that analysis. Both of you make the case there are more effective things to do. That could be if we could effectively get them done. Given the dysfunction at the federal level, the dysfunction at the state level, stuff isn't going to happen. This is within our reach. We can make real impact within our community. I agree. I'm all for job training. But if we do job training, we will still have people at the bottom. And making seven in the quarter an hour is simply unacceptable for anyone, in my view. And again, back to I don't understand why we just don't take the minimum wage and put it where it was in 1969, 1971. They raised it from $160 to $180. They adjusted it for inflation all the way along. If we didn't adjust it for inflation all the way along, I think we'd be in much better shape than this country we are now, and that's all I want us to do is to adjust it for inflation in this community. Thank you. Thank you, Chair. Well, I'll remind the audience, we don't accept public applause or signage in the council chambers. It's part of our council rules, but I appreciate you all being here and being part of this debate. Next, we have Councilman Merlain. Good afternoon. Yeah, I made a couple of statements about the free market system we have in America, where it's the negotiation between millions of people that set the prices for products and services, including labor. And I recently talked to a CEO of a company that has operations throughout Kentucky, and they were pointing out that if Lexington were to raise the minimum wage to 1010, which is a 39% increase over minimum wage now, that the company may say, well, maybe we should go to Ashland, Kentucky, or Paducah, Kentucky, where the rates are less, because they're forced to operate, to run their business the best way they know how. And, you know, the other factor that we have here in Fayette County is right now our unemployment rate is 2.8 percent. Excuse me, 3.8 percent. I sliced one off of there. And so, you know, there's not a lot of people that are sitting around looking for jobs that, you know, like we have a huge unemployment. And I might also mention that Fayette County is one of the fastest growing counties in the state with regard to population increase. So not only are we having people moving in, but they're finding employment here. So, you know, I just worry that we start messing up the free market system, that it could be bad for our economy. Our commissioner just pointed out that our revenue from payroll tax is up substantially, and that's a direct effect of more people working and higher wages that are coming in. And do you feel that, and this is the question, Ed, do you feel that we could do okay with the free market system and let it go as it is? And the fact that a number of local companies, government agencies have announced they're increasing their wages. So just the pressure from competitive companies and government agencies would sort of lift the market for the minimum wage. Could you address that idea? You know, I guess my own belief in one of the slides I mentioned as an economist, it's not to get too deep into econ speak, but I much prefer seeing governments, first off, transfer money directly. Part of the concern about a minimum wage is it's an off-budget or off-book tax, essentially. It's not that we're not debating should we be devoting this amount of money to this program. It's one that occurs from government orders people to pay more wages, and so they pass higher prices on to their customers, and the customers end up financing that increase. Again, I think that the best way from the standpoint of the economy and the success of the economy is to see workers see increases in wages due to the natural increase in productivity that occurs. Typically, we're real happy when we see wage growth that occurs because workers are becoming more productive. There are a variety of ways that workers become more productive. But again, I'll come back to I think the economy functions better when, as governmental entities, We invest in, I'm a large proponent like Jim in early childhood education, job training and overall education, K-12 education, not simply post-secondary education. Those are ways to enhance the productivity of workers, which then gets them paid higher wages. We don't need to rely on governmental entities passing ordinances every so often. that's a much more fundamental way to grow and develop an economy. And it also has the benefit of, I mean, we are a poor state. We rank 47th in the, Kentucky ranks 47th in terms of per capita income, and we are a poor state because we rank 48th in terms of the percentage of individuals with a college degree. You're hard-pressed to attract businesses with those kind of statistics. I think you do better, you grow better, and you have a more dynamic economy when you address those fundamental issues. My last question is, if we increase the minimum wage 39% as proposed, what impact will that have on people that are making $10 or $11 an hour now? And will that be inflationary and push up the wages for other people, which will make the cost of labor, products, and services go up? A couple of things. Just on your prior point, I do want to express the fact that there is a lot of frustration in the country about the lack of wage growth in general at the bottom half of the income distribution. This is the first time in our nation's history post-World War II where we've had two economic expansions, but we've had declines in wages for people in the bottom half of the distribution. And so the question is, you know, how do we address this, right? I think, you know, the evidence suggests that there's not going to be massive plant closures and things like that through the minimum wage. What we don't know in the local area is how the mix of jobs will change over time. Firms that are looking to relocate, okay, to a place like Lexington, how they weigh off, you know, local wage ordinances and so on and so forth. On the second point that you raised, there is evidence to suggest that if you raise the wage to $10.10 an hour, there will be some upward wage pressure on those workers that are earning just above $10.10 an hour. And this is a natural response on the part of firms because they want to pay their more experienced workers a higher wage than new entrants. But again, the evidence suggests that that inflationary effect, like most things dealing with the minimum wage, are relatively small in magnitude. All right, next up we have Council Member Lamb. Thank you, Chair. Is it appropriate now to ask questions about the ordinance that's in our packet, or are all the questions currently right now just gauged to this presentation? Just gauged to this presentation. I'll bump the floor to Council Member Masati after we finish with him. Okay, I'll keep my comments to myself until then. All right, thank you. Next up for the second, anyone else want to speak a first time before we move on to second rounds? All right, next up we have Council Member Farmer. Gentlemen, thank you one more time. And I'm going to ask you something that wasn't in your presentation. I'm just interested in what's going to happen in Louisville. I want to know, will they start paying a wage, an enhanced wage on the 1st of July, or will there be an injunction, or will something happen, and how long will that take? And you may not be qualified or no, but that's what I want to know. Boy, I think we both agree we're not qualified to know. Neither are the lawyers or judges. Thank you very much. Next up, we have Vice Mayor Kay. Thank you, Chair. I want to, the last two slides, if we can get those up. That would be numbers 42 and then number 43. Page 18 and 19, Stephen. Thank you. So I want to be careful how I do this. I don't want simply to put you on the spot or ask you a leading question. But I have a concern about the way this is stated, and I want to see essentially how you would respond. So the first bullet says, poor Lexingtonians have worked with few skills, little education, et cetera. I would add, and because the minimum wage has not kept up, has not kept pace with inflation. so that the purchasing power of someone working at minimum wage has declined, I don't have the number in my head, but by a significant amount of money. So someone working for minimum wage has the ability to purchase an awful lot less. Would you agree that that's a factor that we should put into that? No, I guess I wouldn't for several reasons. First off, it is clearly the case that if you just look at the minimum wage alone, it peaked in real terms in 1968. So I didn't earn the minimum wage until much later than that. So I was earning a lower minimum wage when I was a kid, in terms of real value. However, if you look at other government programs and transfer programs, and so the ones that poor workers qualify for, and particularly the earned income tax credit, if you take the EITC that these workers are earning, the poor workers are earning and that they are qualified for, and put that in minimum wage terms, then you find that the minimum wage plus the EITC is still slightly below the level that we saw in 1968. It's nowhere near as large. So the statements about poverty are statements about the amount of income that these individuals are earning. And I would also say had the minimum wage continued to grow through inflation, you would see a significant number of people. At that point, you're talking about extraordinarily large increases in the minimum wage, which would have very significant impacts on employment. I mean, obviously, no one's proposed a minimum wage of $50 or $100 an hour. At some point, the feeling is that you start to see very significant losses in employment. Again, this basic concept that demand curve slope downwards. And so, no, I would say that we would see issues. you would still see people having very few skills and little education and therefore struggling to find a job given their productivity and the amount of money that they'd earn and the amount that they would produce at a dramatically inflation-adjusted minimum wage. Okay. Then my final question, and then I want to make one more comment. But on the next page, if we're truly interested in helping poor workers, we should spend our efforts addressing lack of education and training. Would an increase in the minimum wage allow those people to do a better job for themselves of getting more education and training? Not the people that lose their jobs. And again, given Jim's analysis on the amount of earnings that they, on net, what they would see, the increase in income that they would see from the increase in the minimum wage, It just doesn't seem like they're getting a large 10% increase is not going to allow them to address issues of education and training. It just is not significant enough to do that. Thank you for that answer. And, Chair, I don't know if it's appropriate now, but I would like to get a comment from Mr. Bailey about the 1379, that the low-income workers, their average, I don't know how to address it, but there's a data point that I asked to have explained to me, and it didn't make any sense to me. Would it be appropriate now to ask Mr. Bailey if he'd like to respond to that? If he'd like to respond to that question, it'd be fine. Mr. Bailey? Thank you, Mr. Chairman. For the original analysis we shared with the council, we also looked at American Community Survey data. I did, after seeing the presentation, looking at the analysis that was given on that particular point, the actual data for Fayette County, for people who work in Fayette County who live below the poverty line, workers who live below the poverty line, the median wage, which is the wage that the typical worker makes in the middle of the distribution is right around the minimum wage, right around $7.25 an hour. The average wage is about $8.50 or $9 an hour, depending on, it's $8.50 in 2012, it was $9 in 2013. So this notion that there's not a lot of overlap between low-wage workers and poor workers, there actually is considerable overlap between those folks. So 1379 is not what the data tell us from the American Community Survey about what workers below the poverty line make. And I think that, you know, the reality of what the numbers are, about $8.50 or $9 an hour on average, about $7.25 as the median, I think, reflects more what we all know, which is that folks who are in poverty, certainly they have problems finding work. They have problems finding full-time work. They have problems finding year-round work. But when they do have work, they do have low levels of skills, so they often do get low-paying jobs, and not jobs that pay $13.79 an hour, which I think most of us would agree is a good job. Thank you. Thank you, Chair. Next up, we have Mr. Gibbs, Council Member Gibbs. Thank you, Chair. I'm not a member of this committee, and if this comes to a vote today, I won't be able to vote. Therefore, I have a request of my colleagues. I ask you to vote this out of committee. This is an important issue. Whatever your position I would hope you would allow the decision be made by all 15 council members if this committee votes against this Resolution the decision is being made without input or without a vote from the first second third Sixth and 11th districts that includes the entire core of the city Not to mention some of the less affluent suburbs, and so I would like to see this go before the entire council. So if you would be so good to consider doing that, even if you oppose the raising minimum wage yourself, allow us all to have a vote on it. Thank you. Next up we have Councilman Relain. Yes. Louisville has passed a $9 minimum wage number, which has implemented over several years. And if we put a 10-10 in, would that put us in a kind of competitive issues with like Louisville? Or on the other hand, what about counties that are next door to us where, you know, they have the existing minimum wage? It seems like a lot of inequities maybe would be coming up that would be hard to anticipate until that happened. But do you have any comment on that? Having not looked at the data, I would be loathe to speculate. It would be very complex. I would actually argue that Louisville faces greater issues looking across the river. So, you know, I'm willing to bet that if I'm a business located in Louisville, my first reaction, if I'm concerned about the minimum wage, would be moving to Jefferson City, probably not Lexington. Louisville is a bigger market so it's a long ways it would be very challenging to know how people would relocate from Louisville to Lexington without having studied it I don't even know how many businesses relocate right now if somebody operated a business in say Jessamine County and they did business over here and came over for a job would they have to pay a higher wage when they work in Fayette County or alternatively would a company based in Fayette County have to pay the higher wage when they work over in an adjacent county that doesn't have a minimum wage? I mean, I see issues like enforcement issues are going to be pretty tough, too. I would assume that if my business is located in Jessamine County and I run an HVAC system and I send workers to work in Lexington, I'm assuming it's where your business is located. Having read the ordinance, I didn't see anything that suggested it just because someone works here. They would have to pay a higher wage. But, again, that would probably be a question for a lawyer, not an economist. Thank you. I'd just like to say thank you guys for coming over. Appreciate it. That's my last question. And then last up, we have Councilman Maloney. Then I'll turn the floor over to Councilman Masotti. The question I have for you is, did you all look at the CPI because I know you all were doing the minimum wage and all that. And this government, back in the 90s, we supported something like that, and we never followed through with it. When we had employee raises, we never followed through because we, at that time, certain council members had other priorities for their district and not followed the rules for CPI across the living, across the board. and we got into a little bit of a problem with our police and fire and we lost a lot of police and fire and all that. Now, how is this going to affect? Did you all look into that number of the CPI for businesses, nonprofits, and all that? I know you all looked at the minimum wage. So how would that impact the community? I mean, the CPI is a national number, right? So the city would use presumably the National Consumer Price Index. the Bureau of Labor Statistics doesn't produce CPI for Lexington proper? So all my analysis did was just make the minimum wage $10.10 an hour. I did not sort of say what happens if we continue to adjust it for inflation. There are two places that have done that so far in which you've got long-term data for Washington State being one of them, in which the minimum wage is under $15 an hour in Washington State. but well above $10 an hour. Over time, it can start to accumulate and become fairly large. There's not enough, again, I'd go back, there haven't been enough people that have done it to have a real good handle on, as this effect continues to grow over time, what the long-term impacts are. One of the papers that I did look at, one paper by Miran West, came out in 2005, does sort of, again, looks more at long-term impacts of the minimum wage. Many of the studies that have been looked at have been fairly short-term. The long-term impacts of the minimum wage tend to be larger because they do accumulate over time. But, again, not a lot of people have taken and looked at the impact that an inflation-adjusted minimum wage would have. All right. Before I turn it over to Councilman Sadi, I just have one question. As chair, before we move away from you all, The research that you did on this issue on the minimum wage and poverty, who funded it? Me. For the university? My own time? Yeah, similar to Jim. The same statement that Jim made would apply to me. This was something that I did with the use of a graduate student, but I received no money for it. All right. Thank you. Councilor Massadi. Thank you, Chair, and thank you, Professor Trotsky and Professor Zilliak. I appreciate you coming down today and giving us your perspective on the minimum wage. Chair, I think there's some folks in the audience that would like to speak. I'd like to reserve maybe about 10 minutes for me at the end of the meeting to kind of go forward with my proposal. And if we could do that now, that would be the Council's purview or the budget, if we could do a little bit of public comment. I guess there's some people that have signed up, from what I understand. The committee, I'll ask the committee. We've already had a public hearing, especially for public comment. Does the committee want to open it back up today to public comment? Councilman Maloney? I just have a question here. I mean, when you make the motion, which I want to hear, I think it's going to be a lot of questions. We only got less than 30 minutes. You have 30 minutes. And to me, there's going to be a lot of questions. I have questions about the CPI, which I have questions about the tips or whatever for the response. Why don't we do this, then? We'll allow you to go, Councilman Massotti, and present what you have. And then if there's enough time, I'll be glad to reserve the five or ten minutes we need for the comment. If anybody has an objection on the committee. Go ahead, Councilmember Lamb. Looks like you're very poised to go. Well, I mean, I just think that the intention of the public meeting was for public comment, and this intention of this meeting was for this committee to discuss. So I think that if we allow 10 minutes, which is precious time to this body up here, to be able to discuss issues before us, then it could belabor the fact of making a decision today. That's my two cents for us. If you'll proceed, Councilor Sadi. I've got 15 minutes, right? So if I want to choose someone out of the audience, if part of my time, I believe I have the ability to do so. So we have a – I'm sorry, I'll be there in a minute, but I just want to pick a couple of folks out of the audience that I think they may be here to speak briefly. This is an important, very important item. We have a young lady here in front, Ms. Miller, if you wouldn't mind coming in. Oh, this is part of your presentation? Yes. We'll just click it at 15 right now. Well, we're at 1444, so. Well, give me back – actually, I should have 20 seconds – or 20 minutes. The other side did have 20, and that's all. With being fair, I kept time on that. Thank you, Ms. Masadi. How many minutes would you like me to speak? I'm sorry, if you can do it in three, please do. Thank you. Absolutely. So I think one thing that's being misunderstood, or I feel it was misunderstood in the presentations previous, is that raising the minimum wage, I feel, if, as the presenters, Mr. Ziliak and Dr. Trotsky said, that the rate that people will lose their jobs is not significant, then it's very important to, if this ordinance is within your power, to pass it and raise the minimum wage, because by giving low-wage workers like myself more income to spend, that will influence education as far as I'm concerned. and they could, you know, he says that that's not significant enough. I know for me it would be if I had that much more income, well, in the time that I was making that wage, which was very recent. That would have made a huge difference in the degree of education I was able to pursue. And I agree with Jake's comments as well that, you know, like him, I've worked minimum wage as a young person I'm a huge supporter of local business I've been pursuing education taking responsibility for myself by taking a huge financial burden off of my family which is a lower middle class family I know in my case this would make an immense difference and in the cases of many people I think it's an issue it's a moral issue. And there are a lot of people who need this wage increase more than I do to support their families. A lot of people addressed that early childhood education makes a huge difference in future earning, in the degree to which people become involved with the penal system. And there's a wealth of research that indicates that when a family is under a lot of financial stress, which these low-wage families are, that that affects the way that the brain develops in a child. And that's a huge part of this issue. And I think that working families, if you are working for a living, full-time or otherwise, to whatever degree you can, you ought to be paid a living wage. And 1010 is on the way to that. and I think that it's extremely important to pass this ordinance. Thank you. Thank you, Catherine. Mr. Self and then Mr. Bailey, if you can get on deck, we can get through this pretty quickly. Thank you. Council members, my name is Ben Self. I'm here as an owner of West 6 Brewing to speak in favor of raising our local minimum wage. I like to think I'm no economist, but I speak not just for myself, but for other young entrepreneurs. Often these small business owners, they get referred to as the ones who suffer when this wage is being debated. But as a young business owner who has a future in this city and is committed to our city being the best it could possibly be. For those not familiar, we have a production brewery and tap room here in Lexington. We distribute our beer throughout the state. We have 34 employees that are a mix of tipped and non-tipped employees, full and part-time. We started West 6. We started with the goal not just of making great beer, but also having a positive impact on the community that we're a part of. That, for us, means not just being environmentally responsible and supporting other local nonprofits, but it also means treating our people well, things like offering health insurance and employee ownership, which we did over the last year. In addition, over the last year, we raised our minimum wage for both our part-time folks as well as our full-time equivalents to $12 an hour for all employees. We did not do this because we had to. Every time I set out a job, everybody wants to work in a brewery. We have hundreds of applicants for every job that we send out there. People are willing to come and work for nothing in exchange to get experience in the brewery. But we view this as a moral issue, something that we had to do to our employees. It was only fair. They were putting in their hard work. They deserved to be fairly compensated for it. We also view it as having a positive impact on our business. Our product is one that does not differentiate based on price. We differentiate based on quality. And the quality of that product is directly related to the quality of employees that we can bring in. For us, that means having people who can be there as an employee for a long term. People who can come there and work for 10 years and make a career out of it. You can't make a career out of an $8 an hour job. It's also a job where we don't want people working a second job to be able to make their rent payment on a monthly basis. We want people who can come there, dedicate their time when they're working at the brewery, and then go home and enjoy their life. To us, that's part of having someone who can be here long term. And finally, we wanted to do it as, we view it as positive in addition because we view it as a revenue source. We think that the more people make here in Lexington, Kentucky, the more they're going to have to spend at their other local businesses, at the local bookstore, at the local coffee shop, and at the local brewery. I think that if you increase this minimum wage, it will have a positive impact not only on our business, but also on our city. And so I urge you to pass it along to the general counsel. Thank you, Mr. Self. Mr. Bailey, please. Thank you, Mr. Chairman and Council. Just to underline, beginning with what I said earlier, you may have got the impression that the increase in the minimum wage is not for people in poverty earlier, that those are entirely separate groups, people in poverty and people who earn low wages. I just want to underline, again, that there is considerable overlap between those two groups. Again, poor people in Lexington are not earning $1,379 an hour on average. They're earning far lower than that. Their median is right around the minimum wage. And wages are a major contributor to the fact we have not made substantial progress in poverty in this country in recent decades. In fact, as the paper we showed you, 76% of workers whose family income is below the poverty line in this county would benefit from this increase. That is the group of people who will disproportionately benefit from this increase. Also benefiting will be people who make above the poverty line and up to 200%. which again is closer to what is considered a self-sufficiency wage. And if you look at the studies that have been done of what it takes to live in a city like Lexington, it's closer to 200% of poverty than it is 100% of poverty. And between those two groups, that gets you about 72% of the people who will benefit from this increase. So these aren't teenagers working at the country club for the summer. These are moms. These are people trying to support themselves as adults. Again, 90% are adults. and the minimum wage will make a difference. The minimum wage is not the only thing that's needed to address poverty. And some of the complaints about the minimum wage are that it doesn't wipe out poverty in one fell swoop. It won't do it, but it's part of a portfolio of actions. Education, housing, earned income, tax credit, those are all good things, but they won't address the issue alone either. And without wages, you're putting more burden and responsibility on governmental services to address poverty if you let wages continue to decline. And finally, I will just speak to the issue about job loss, because that is, of course, the most important, the most common approach or common opposition. There's a vast body of research built up over the last couple of decades that shows that increasing the minimum wage to reasonable levels, as we're talking about here, has little to no impact on employment. And that includes not just the study that, the one study that Professor Trotsky mentioned, but a whole body of research. The presentation mentioned only a few studies to make the case for a 2% decline. Even those studies, which are on the far extreme in terms of job loss, those percent declines are referring only to teenage employment and not to the employment of low-wage workers more broadly. So the numbers that were presented overstate the job loss from this increase. The evidence from other places, from other minimum wage increases, is that any job loss will be small to nonexistent. But the benefits to workers, including particularly low-wage workers who are in poverty or near poverty, will be substantial, and our city will be better as a result. So thank you for your time and consideration of this issue. Thank you, Mr. Bailey. And now, Council Members, if you would please indulge me for about five, ten minutes. I certainly appreciate your attention and your patience. Up until about 1938, there were no general welfare protections for working Americans. And that year, President Franklin Roosevelt sent a bill to Congress with a message. America should provide its workforce a fair day's pay for a fair day's work. On June 25, 1938, nearly eight decades ago, this week, President Roosevelt signed a bill creating landmark law in the nation's social and economic development, the Fair Labor Standards Act. Minimum wage, as we know it today, was born. Congress initially set the wage at 25 cents an hour, which amounts to about $8.30 today. Without a doubt, it's gotten better since 1938 in terms of health care, technology, cars, sanitation, and overall quality of life. However, housing, food, medical care, transportation, and education still make up the biggest expenses the vast majority of Americans face today. Comparing the inflated cost of living today from 1938 to 2015, the U.S. dollar has lost an enormous amount of purchasing power. Fast forward to 2015. We find that just over 5% of all hourly paid workers, or approximately 1% of the total U.S. population, earn an hourly wage at or below the current minimum wage. That's over 3 million Americans. We had one example today with Kate Byrne Miller, who was in her early 20s, works two minimum wage jobs, one being a server, in order to go back to college. There's numerous examples. We've heard them. You know, critics of the minimum wage propose that minimum wage workers fall to their plight by virtue of supply and demand. And if they were willing to work harder, they could earn more, if it only was that simple. Still others will say that a minimum wage was never intended to support a family or to be a means to live on. Again, just get a second job or a third job. Really, where is that written? I challenge anybody up here to validate that fallacy. The reality remains a significant portion of our society, many right here in Lexington, are struggling day in and day out to live on the current $7.25 an hour minimum wage, where a day's work won't even buy a tank of gas for your car, if you can afford a car. I believe we just can't sit idle and wait for those at the state or federal level to act. Due to federal inaction on raising the minimum wage in the 1980s, many states across the country began to raise their minimums for the first time. And more recently, when some states have procrastinated in raising the minimum wage, a growing number of cities have begun to raise their respective citywide minimum wage. it's time to add Lexington to that list. And how is this accomplished? I propose a raise to minimum wage to $10.10 an hour in incremental steps over the next three years. This would not be disastrous for businesses, as some critics have attempted to argue. One recent study suggests the federal minimum wage would be around $22 an hour if he had kept up with increased rates in worker productivity. Instead, it remains at one-third of that amount. According to a 2011 study by the Federal Reserve Bank of Chicago, low-wage workers spend more than when minimum wage is raised. The spending, in turn, boosts the economy and job growth, according to the Economic Policy Institute. You know, economists have conducted hundreds of studies about the employment impact of minimum wage and concluded that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. One local economist, however, disagrees with the idea of raising the minimum wage in Lexington. A local university professor has weighed in to proclaim that Lexington should not raise the minimum wage. Interestingly enough, the same professor's annual salary is more than $270,000 a year. And good for him. I mean, I'm confident that his salary is well-deserved. It's certainly very impressive. In fact, when I did a quick calculation, his salary on 40 hours a week equates to an average hourly wage of $130 an hour. So forgive me if I draw the conclusion that the esteemed professor may not be able to exactly relate to someone's circumstance who's presently earning $7.25 an hour. His own employer, in fact, the University of Kentucky, Lexington's largest employer, is expected to soon approve raising the minimum wage for non-student employees to $10 per hour beginning July 1st. Clearly, the university's administration does not share the professor's opinion with regards to raising the minimum wage. Excuse me, Councilman. And the debate... Excuse me, one second. Yep. Is there a motion from the council to extend her time? I'd like to move to extend by five minutes. Thank you. I'll wrap it up. A motion in a second. Anybody second? Second. You're not on the committee. I need a committee member to second. I will second. Thank you. Please continue, Councilman Massadi. Thank you. The debate over the government's role in the economy is certainly not a new debate. By what... I'm sorry. But while the debate continues on and on and on, Those in need also need to continue to work hard and still struggle to put food on the table. Others will say that the earned income tax credit is the alternative answer to raising the minimum wage. What they do not point out, however, is that the earned income tax credit is a taxpayer-provided wage subsidy. Some will even say that the minimum wage is simply a government program designed to provide welfare. Nothing could be further from the truth. The truth is, people earning the minimum wage are not seeking welfare. They are indeed willing to work. They are simply asking to be paid for a fair wage for the times in which we live. So should the burden of providing the subsidy continue to fall strictly on the backs of taxpayers? No, I don't think so. I believe that we should instead ensure that both taxpayers and employers do their part to make sure the minimum wage equals a living wage. Poll after poll shows overwhelming majority of support for raising the minimum wage. And this is the bottom line. Do we want to live in a community where we unite together, help each other in time of need, especially those who presently earn the lowest legal wage? Wouldn't it be outstanding if Lexington was a leader of the progressive movement across this country toward recognizing President Roosevelt's vision in this era? Or do we choose to go back to the same retort of waiting for the federal or the state legislature to tell us how we should treat our neighbors? Today, I urge my committee colleagues to take the first step in that direction by voting yes today to send this to the full council. Let's not end this discussion here and now. Let's be open-minded. Let's understand that we have, as legislators, have a duty to discuss this with the full council. It's an important thing to do, and it's the right thing to do. And I thank you all for listening today, and I thank you all for coming down today. We thank you. Councilman Asadi, are you going to come back up here and finish? I am. I am. Oh. Councilmembers, if you have questions for Councilman Asadi, please go ahead and chime in if she walks your way back up to the horseshoe. Okay. You're finished? Just for now. Okay. Council Member Lamb. Thank you, Chair. First of all, I want to state that I applaud local businesses, Mr. Self and all the other local businesses in Lexington that choose to do the right thing by raising their increase, increasing their wages for their own employees. I applaud you tremendously because that's really where I wish that it would start and begin and stay. Obviously, that'd make our jobs a lot easier in this decision. And two, I want to state for the, you know, for the public that I raised my son as a single parent for years, and I had to make choices in how to do that, and I was very fortunate. But I just want people to know where I'm coming from. There were several council members that earlier were talking about a decision about the Jefferson County ordinance, and I'm curious. I read in the article yesterday aware that they're supposed to actually have an initial ruling by July 1st. I'm just wondering if someone from our law department would, if they have anything to maybe expound on that or to exactly, about the question is what the legal case is in Louisville. The status of it is, as you noted, the judge is supposed to rule or as indicated she'll rule before the effective date. And my understanding from media reports is no matter which way it goes, there may be an appeal of that. So I don't know if there's a time frame on predictions when the case will be final. All right. Thank you. And I also have to share some concerns, and I have shared these with my colleagues when asked, about the CPI that's included in the ordinance, the draft ordinance. The CPI that is in here actually states that there is a cap of 3%. I have a concern with that because that truly can cause problems for small business owners to plan budgets when they don't know how much it's going to go. Now, of course, they can always gauge things on 3%, but how are local businesses going to be able to handle that? And I guess I will preface that with saying I don't know how many local businesses actually currently increase their wages based on the CPI. So I have concerns with the CPI component, and that's what I have to say. Thanks. Next up, I have Councilmember James Brown. Thank you, Chair. As a representative of the 1st District, a large population that I serve fall under the category of poor workers and low-wage workers. And I've heard over the last few weeks overwhelmingly from them of support of increasing the minimum wage. So therefore, I will support the minimum wage increase and would encourage committee members to support it and vote it out of committee as well so we can address the issue as a full council. Thank you. Council Member Farmer. Thank you, Mr. Chair. Lacking a motion on the floor, let me just make a couple of discussion points. Lexington exists in a really delicate balance. We've worked very hard for many years. We try to balance our city and our county. We try to balance our urban area and our farm area. And more recently, we've spent a lot more time on affordable housing and homelessness. Outcomes that are still in process. We don't know what positive effects those endeavors will have. I think we as citizen legislators come to this position to set policies that serve the citizens and provide the services that makes Lexington a great city. It's a wonderful place to live in and to do business. However, when we get down to the subject of the brass tacks of this legislation, I think that there are ample questions about the form it has taken. and we really have as yet to discuss the legislation. We've had several shows. We've had a lot of conversation, but we really haven't worked on the legislation. And I think that, to me, one of the things that rang true early in this conversation was that we should be a leader in this. And we have been a leader, and we are a leader in many great ways. I feel, though, that in this particular inning, Louisville is the leader. And I personally am content to let them take the lead and see how it plays out and what happens with it. Because I think there's a lot of time between the legislation being passed there and it being effective there. And I think that time is going to be fraught with a lot of legal issues and a lot of money being spent on behalf of the issue that I personally believe we can watch. if there were a statewide initiative or a nationwide initiative, there is nothing wrong with this issue. Us, as an independent municipality, who depends upon the trading area around which we are a part of, this would set a really tough president, I believe, and personally, I am not there yet. So with that in mind, or as a background, I just think in the order of trying to make better legislation or have time for better legislation, I would like to table this until such time as the Louisville ordinance has been adjudicated to its final and unappealable order so that we will know upon which ground we might make legislation. So moved. All right. We have a motion to table and a second. My Council Member Brown, this is not debatable except as to the extent of the time frame. And Council Member Farmer, when you say table this, are you saying the issue as it's in committee, the topic, table the topic for discussion? Because there's no ordinance before us. There's no motion to move that ordinance. Well, that's part of what I said to begin with. We have still yet to take up the ordinance at all. We've not really had a discussion as a council about the ordinance yet. So the motion is to table the topic in committee until such time Louisville, the lawsuit in Louisville has been eradicated by the court system. Again, there's no debate on the topic. And there's a debate on the time frame. So raise your hand or sign in if the voting system. I have a chair. Hold on one second. Can you sign in? Vice Mayor Kaye's first and then whoever else has a question on the time frame. I have a question on the time frame. I could support a motion to table this until after a break, but to table it until Louisville's court case is resolved means that when that court case is resolved, and we have legal opinions on both sides, but a fair number of people believe that it will be resolved in favor of Louisville. When that's resolved, we would have to start from scratch. We would have to begin the whole effort. People want to make sure that if we pass an ordinance here, the local merchants have time to adjust, so there'd be another six months or maybe a year. So I believe that it would be inappropriate to table it for that length of time. Thank you. Next up, I have Councilor Massotti. Thank you, Chair. A question about the timetable. Commissioner Graham, please. Tell me, in your estimation, when this would be resolved in Louisville, what would the time frame be, based upon your legal analysis? Well, the circuit judge who will have to make the initial decision has indicated that her initial decision will be before the ordinance is supposed to go into effect, which is July 1st. I can give you generalized guidelines on appeals. There's a matter of right to appeal to the Kentucky Court of Appeals from that decision. So either party could take that, whoever's on the losing side. Um, appellate court decisions in the court of appeals can vary any place from, um, you might get a, get one in six months, might be a year and a half. Um, it varies depending on how long, there's no, there's no judicial rule about when courts have to decide things. Then, uh, following that step, if, um, the Supreme Court were to decide the Kentucky Supreme Court to take discretionary review, If a party requested them, there's also that appellate review as well. So that should give you a sense. Again, I can't give you exact time frames because judges don't operate under those parameters. Up to two and a half years would be realistic. It could be. It could vary. It depends, too, on the parties. You know, if one party in the Court of Appeals were to win and decide not to do anything further, that could cut it off at that point. But if the party decides to seek further review, that could lengthen the time. So a realistic possibility two and a half years from now, that could be an answer. I think you've got a span from any place six to eight months, maybe on the quick end, to a year and a half, two years on the far end. Thank you very much. Committee members, I have a motion on the floor and one more. Councilman, we're asking to speak about the timetable of that motion. We're past our time. workstation needs to start so i'll recognize um council member bledsoe and then we'll vote thank you very quick commissioner graham i'm so i'm sorry i just want to it does not preclude during a table we still have the opportunity to discuss the issue outside of committee that's correct i think yes okay thank you all right so council reform will you read your motion so that everyone understands clearly what it is? It's to table this issue that is in committee until it has reached its final unappealable order through the court system in Louisville. All right. Council members, if you'll vote electronically, all in favor say aye. Aye. Vote. And all opposed, vote electronically. That motion passes 6-3. Any other motions that come before the committee today? We adjourn. Is there a second? There's a motion and a second to adjourn. All in favor say aye. Aye. We're adjourned. Thank you.