WELCOME TO "KENTUCKY TONIGHT."

I'M RENEE SHAW.

THANK YOU FOR JOINING US.

OUR TOPIC TONIGHT: WORK, WAGES AND WELFARE.

AND THERE HAVE BEEN CHANGES TO ALL THE THREE WITH COVID A BIG UNEMPLOYMENT IS DOWN, BUT MANY BUSINESSES STILL FACE WORKER SH AS PEOPLE'S WAGES INCREASE, MAN STILL FALL BEHIND BECAUSE OF IN AND KENTUCKIANS ON PUBLIC ASSISTANCE FACE NEW RULES PASSE BY THE KENTUCKY GENERAL ASSEMBL.

EARLIER THIS YEAR.

SO HOW IS ALL OF THIS AFFECTIN HOW PEOPLE LIVE THEIR LIVES AND HOW EMPLOYERS DO BUSINESS?

TO DISCUSS ALL OF THIS WE ARE JOINED.

>> OUR ELECTRICS STUDIO BY: CHARLES AULL, EXECUTIVE DIRECTOR, CENTER FOR POLICY AND RESEARCH AT THE KENTUCKY CHAMBE OF COMMERCE.

DUSTIN PUGEL, POLICY DIRECTOR FOR THE KENTUCKY CENTER FOR ECONOMIC POLICY.

AARON YELOWITZ, UNIVERSITY OF KENTUCKY ECONOMICS PROFESSOR.

AND JOINING US BY SKYPE, PETER FOSL, PHILOSOPHY PROFESSOR AT TRANSYLVANIA UNIVERSITY.

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NEAR AND A LITTLE FURTHER OUT.

THANK YOU, DR. FOSL, FOR BEING WITH US.

LET'S JUST START WITH WHAT EVERYBODY WANTS TO KNOW ABOUT INFLATION.

WHY DO WE HAVEIT?

WHY IS IT SO HIGH EVEN THOUGH THE GAS PRICES ARE COMING DOWN?

AND ARE WE CLOSE TO A RECESSION?

SO I'M GOING TO START WITH THIS SIDE FIRST.

WHICH ONE DO YOU WANT TO TACKLE FIRST?

>> OH, MY GOODNESS.

WELL, I THINK INFLATION IS SOMETHING THAT'S ON EVERYONE'S MIND RIGHT NOW BECAUSE WE GO TO THE GROCERY STORE, WE GO TO THE GAS STATION AND WE'RE PAYING MORE FOR EVERYTHING AND IT'S INTERESTING BECAUSE WE ARE REALLY DEALING WITH WHAT STARTED WITH COVID, AND I KNOW WE'RE SNORT MIDDLE OF A WAVE AGAIN, BUT, YOU KNOW, WHEN WE ALL WENT HOME, WE SHIFTED FROM PURCHASING A LOT OF SERVICES TO PURCHASING A LOT OF GOODS.

I THINK CANCELLATION GYM MEMBERSHIPS AND BUYING A PELETON.

SO AT THE SAME TIME A LOT OF FOLKS WENT HOME AND THEY WEREN'T MAKING THOSE THINGS ANYMORE.

SO SUPPLY CHAIN ISSUES, YOU KNOW, SORT OF MATCHED WITH THE HIGH DEMAND FOR GOODS, MEANT THAT PRICES WENT UP, AND THEN RAUSCH INVADED UKRAINE, SO RUSSIA AND UKRAINE COLLECTIVELY PRODUCE ABOUT 30% OF THE WORLD'S CORN.

THEY MAKE ABOUT 20% OF THE WORLD'S WHEAT AND NATURAL GAS AND THEY MAKE 11% OF THE WORLD'S OIL.

SO WHEN YOU HAVE FINANCIAL SANCTIONS ALONG WITH BLOCKADES AND JUST THE DISRUPTION THAT COMES FROM A WAR, YOU END UP WITH A LOT OF SHORTAGES, AND THAT'S REALLY WHAT WE'RE SEEING RIGHT NOW.

>> Renee: SO PROFESSOR YELL WITS, THINKING YOU WOULD ADD TO THAT?

ARE IS THERE A LOT OF FACTOR THAT ARE CONTRIBUTING TO THE HIGH PRICES AND WHERE WE ARE NOW ECONOMICALLY?

>> OBVIOUSLY BOTH THE REBOUND FROM COVID AND THE NORMALIZATION OF LIFE AS BEFORE COVID AND RUSSIA AND UKRAINE ARE IMPORTANT FACTORS.

A COUPLE OTHER FACTORS THAT I WOULD THROW IN THERE, TOO, FIRST OFF, WE HAVE AN EXTREMELY TIGHT LABOR MARKET WHICH PUTS WAGE PRESSURE, AFFECTS SUPPLY CHAINS, THINGS LIKE THAT, AND THE OTHER ONE I'D ALSO THROW IN THERE AS WELL IS THERE ARE REAL POLICY CHOICES THAT ARE BEING MADE, AND THOSE PROBABLY HAVE CONTRIBUTED TO INFLAKES AS WELL.

ONE POLICY CHOICE IS THE FEDERAL RESERVE AND THE TIME IT TOOK FOR THE FEDERAL RESERVE TO START TIGHTENING.

FORMER FED CHAIRMAN BEN BERNANKE SAID THE CENTRAL BANK ERRED IN WAITING TOO LONG BEFORE IT STARTED TIED ATENING, AND SO MON TORRIE POLICY IS POTENTIALLY AN ISSUE.

AND THEN ANOTHER ONE, WHICH LARRY SUMMERS EARLY ON IN THE BIDEN ADMINISTRATION BROUGHT UP, BASICALLY ARGUED THAT THE STIMULUS THAT WAS HAPPENING, THE AMERICAN RESCUE PLAN AND AS WELL THE $1 BILLION STIMULUS IN DECEMBER 2020, THOSE WERE PRETTY BIG SHOCKS TO DEMAND, AND HE ARGUED AT THE TIME THAT THAT WOULD CONTRIBUTE TO INFLATION, AND HE WAS CORRECT, THAT IT DID.

SO THOSE ARE -- SO AGREE 100% WITH RUSSIA-CRANE UKRAINE, WITH THE REBOUND FROM COVID AND THE NORMALIZATION OF LIFE.

I HAVE I'D ADD THOSE IN THERE INVESTMENT.

ONE OTHER TYING AID ADD IS INFLATION IS HIGH IN OTHER COUNTRIES WOULD BE SO POLICY CHOICES LIKE LAX MONETARY POLICY IN EUROPE, THE INFLATION RATE ISN'T THAT DIFFERENT THAN IT IS HERE.

OF COURSE, THEY HAVE HAD SOME HAD SOME OF THE SAME POLICIES WITH RESPECT TO NOT TIGHTENING UP.

>> IF YOU THINK ABOUT WHAT LAWRENCE SUMMER SAID THAT INFLATION PRICES CONTRIBUTED TO THAT, IF WE DIDN'T HAVE THAT, THOUGH, WHAT WOULD THAT HAVE DONE TO THE ECONOMY?

>> ITALY THE TRADEOFF BETWEEN JOBS AND THE UNEMPLOYMENT RATE, WHICH LIKE YOU WERE TALKING TALKING A BIT ABOUT JOBS, THE UNEMPLOYMENT RATE IS REALLY TERRIFIC RIGHT NOW.

IN KENTUCKY IT'S 3.7%.

>> A RECORD LOW.

>> RECORD LOW.

IN THE U.S.

IT'S 3.6%.

AND SO THOSE ARE NUMBERS TO BE PROUD OF.

HOWEVER, AS ALL OF US WOULD PROBABLY AGREE, THERE'S JUST A TON OF ANGST RIGHT NOW BOTH BECAUSE THE TIGHTENING COULD EASILY LEAD TO A RECESSION, AND AS WELL, ALTHOUGH WORKERS' WAGES IN NOMINAL TERMS ARE RISING AT A RATE THAT SEEMS PRETTY GOOD, THEN INFLATION IS ERODING PURCHASING POWER.

>> SO PROFESSOR FOSL, I WANT TO COME TO YOU.

WHAT DO YOU THINK?

ARE WE ON THE THE VERGE OF A RECESSION?

AND WHEN WE TALK ABOUT WAGE GROWTH, IS IT ENOUGH, IN YOUR VIEW?

>> MY PERCEPTION IS WE'RE PROBABLY ON THE VERGE OF A RECESSION.

ON THURSDAY THE SECOND QUARTER OF FIGURES WILL COME OUT AND THEN WE'LL SEE IF THE ECONOMY HAS CONTINUED TO CONTRACT.

IT CONTRACTED ABOUT 1.6% IN THE FIRST QUARTER AND TWO QUARTERS OF CONTRACTION WILL BE A RECESS.

YOU HAVE TO REMEMBER THE LAST QUARTER OF 2021 THE ECONOMY GREW AT AN ENORMOUS RATE.

I FORGET WHAT IT WAS RIGHT NOW.

I WANT TO SAY 6, ALMOST 7 PERCENT.

YOU'RE TALKING ABOUT UNEMPLOYMENT, I THINK THERE'S A QUALIFICATION THAT WE HAVE TO GIVE TO THAT.

YOU WERE RIGHT, OF COURSE, TO SAY THAT EVEN THOUGH I SAW THAT WAGES IN MAY HAVE GONE UP FROM THE YEAR BEFORE, I THINK 11% IS WHAT I SAW, BUT INFLAYING OVER THAT SAME PERIOD, 9%, INFLATION, SO REAL WAGES HAVE ONLY INCREASED BY 2%.

MORE THAN THAT, LABOR FORCE PARTICIPATION IS DOWN, AND THAT MEANS THAT EVEN THOUGH THE UNEMPLOYMENT RATE OF THOSE WHO ARE INVOLVED IN WORK AND SEEKING WORK IS LOW, VERY LOW, IN FACT, KENTUCKY RANKS AT THE MOMENT -- THESE ARE APRIL FIGURES, ACTUALLY -- BUT 49th AMONG 50 STATES IN LABOR FORCE PARTICIPATION.

OUR LABOR FORCE PARTICIPATION, THAT IS BE, THE PARTICIPATION IN THE LABOR FORCE OF PEOPLE WHO COULD BE IN THE LABOR FORCE, IT'S ONLY ABOUT 56%.

IT WAS 61% BY COMPARISON IN 2013 I SAW.

SO THAT'S A PROBLEM WE HAVE RIGHT NOW, IS TO DRAW PEOPLE BACK INTO THE LABOR MARKET.

ALTHOUGH I HOPE THE COMPETITION DOES CONTINUE TO RISE.

>> SO LET ME ASK YOU A QUESTION.

DID THE WAGE INCREASES CAUSE INFLATION?

>> I WOULD AGREE WITH MY COLLEAGUES PRETTY MUCH ACROSS THE BOARD.

I THINK THE TEMPTATION HAS BEEN TO -- THE UNFORTUNATE TEMPTATION HAS BEEN FOR MANY PEOPLE TO OVERSIMPLIFY THE CAUSE OF INFLATION.

I HAD LISTED FIVE AND I WOULD PROBABLY FRAME AT IT IT A LITTLE BIT DIFFERENT THAN MY COLLEAGUES, BUT -- AND I WOULDN'T PROBABLY GO TO LARRY SUMMERS.

LARRY SUMMER WASN'T ARCHITECT OF 2008 COLLAPSE AND THE DISASTROUS RESPONSE AFTERWARDS, BUT I WILL SAY I THINK HE IS A LITTLE BIT RIGHT ON THIS.

THE FIVE I LISTED WAS THERE'S ENERGY PRICES ARE A HUGE FACTOR.

ALSO, LARGE COMPANIES, I MIGHT EVEN SAY MONOPOLY COMPANIES, HAVE BEEN RECOVERING LOSSES THAT THEY MADE DURING THE PANDEMIC.

YOU KNOW, WHEN YOU GET INTO THE BUSINESS, PEOPLE WILL SAY THERE ARE EITHER PRICE TAKERS OR PRICE MAKERS AMONG FIRMS P. PRICE TAKERS ARE THE ONES THAT HAVE TO GO WITH WHATEVER PRICES THE MARKET HAS GIVEN.

PRICE MAKERS ARE FIRMS THAT ARE BIG ENOUGH TO SET THOSE PRICES.

AND WE KNOW THAT THAT IS HAPPENING BECAUSE I WAS READING IN THE SAN FRANCISCO FEDERAL RESERVE NEWSLETTER, CEOS ARE BRAGGING ABOUT IT.

THEIR CORPORATE PROFITS WERE ENORMOUS LAST YEAR, OVERALL THEY WERE 25%.

25%.

THE S&P COMPANIES THIS YEAR, IN THE FIRST QUARTER POSTED PLOTS OF OF 13%.

THEY HAVE NEVER, SINCE 1999, THE PROFIT RATE IN THE S&P COMPANY HAS BEEN OVER 11% AND IT'S EXPECTED TO BE HIGHER, 13% THIS YEAR, SO WE KNOW THAT THESE LARGE COMPANIES ARE YOU CAN SAY GOUGING, BUT THEY'RE REAPING IN ENORMOUS PROFITS.

SOME OF THAT I THINK NEEDED BECAUSE THEY HAD ENORMOUS LOSSES.

BUT, YOU KNOW, COMPANIES LIKE THE AIRLINE GOT OVER $50 BILLION IN PANDEMIC ASSISTANCE AND NOW THEY'RE GIVING CUSTOMERS ENORMOUS PRICES, AND -- ANYWAY, ENERGY PRICES, YOU HAVE BIG COMPANIES.

YOU HAVE SUPPLY CHAIN PROBLEMS.

THAT INCLUDES LABOR MARKET PROBLEMS.

AND, YEAH, YOU DO HAVE GOVERNMENT STIMULUS SPENDING AND EASY MONEY FROM THE FED.

I THINK THE QUANTITATIVE EASING AND THE LOW INTEREST RATES HAVE ALL CONTRIBUTED.

SO ALL THOSE FACTORS I THINK PLAY IN TO INPOLICE STATION.

>> CHARLES AULL, ANYTHING ELSE TO ADD TO THAT?

>> I THINK THAT'S A REALLY GOOD LIST OF WAYS TO EXPLAIN WHAT'S GOING ON WITH INFLATION.

IT'S SOMETHING THAT'S EXTREMELY FRUSTRATING NOT ONLY FOR CONSUMERS BUT BUSINESSES ARE ALSO EXPERIENCED WITH THIS KIND OF IN TWO DIFFERENT WAYS.

ONE IS BUSINESSES ARE ALSO EXPERIENCING INCREASED COSTS ABOUT THE THOSE TEND TO BE THE FACES OF THOSE INDIVIDUALS THAT HAVE TO PASS ON THOSE COSTS AND SORT OF FACE CONSUMERS WHEN THEY GO TO PAY FOR THOSE THINGS.

SO IT CAN BE A VERY, VERY FRUSTRATING EXPERIENCE.

OF THE ONES THAT WE HAVE KIND OF TALKED THROUGH, THE ONE I WOULD DISPUTE IS CONNECTING INFLATION DIRECTLY TO THINGS LIKE CORPORATIONS DOING PRICE GOUGING.

THAT IS AN ARGUMENT THAT TENDS TO COME UP DURING PERIODS OF INFLATION.

WE HAVE SEEN THAT IN OTHER PERIODS OF INFLATION WHERE CORPORATIONS AND BIG BUSINESSES TEND TO BE BLAMED FOR PARTS OF WHAT'S GOING ON WITH INFLATION.

>> BUT YOU CAN'T DENY THE BLOATING OF THE CEO SALARIES IN RECENT YEARS, CORRECT?

>> SURE.

YOU'VE SEEN INCREASES IN CEO SALARIES.

YOU'VE SEEN INCREASES IN CORPORATE PROFITS.

THOSE THINGS TEND TO MOVE AROUND QUITE A BIT.

IN TERMS OF CEO PROFITS,IT WOULD TAKE WRITE QUITE A GREAT AMOUNT ESPECIALLY SINCE THIS IS A GLOBAL PHENOMENA.

WHEN YOU'RE TRYING TO UNDERSTAND INFLATION I THINK IT'S BEST TO STICK HAD TO THOSE BORE KOSHI BASICS OF TALKING ABOUT SUPPLY AND DEMAND.

OFTENTIMES WHEN WE HAVE SEEN THIS SUBJECT COME UP, WE HAVE SEEN FOLKS SUCH AS THE WHITE HOUSE COUNCIL OF UNDER OBAMA, JASON FERMAN, TAKE APART THAT ARGUMENT IN A NUMBER OF DIFFERENT WAYS.

I THINK STICKING WITH THOSE BASICS SUPPLY AND DEMAND, THAT'S THE MORE SOLID EXPLANATION FOR INFLATION.

>> DUSTIN FUGUEEL, WHEN YOU TALK ABOUT THE TIGHT MARKET AND BUSINESSES LOOKING FOR WORKERS, IS THAT AN OVERSIMPLIFICATION OF THE ISSUE?

IS THERE A WORKER COMPONENT OF THAT ARGUMENT THAT WE DON'T GIVE CREDENCE TOSOME.

>> THERE IS AN INCREDIBLY TITE MARKET RIGHT NOW.

WE ARE IN THE MIDDLE AITCH REALLY HISTORIC RECOVERY.

THE COVID DOWNTURN WAS DEEPER THAN ANY DOWNTURN WE HAVE SEEN SINCE THE GREAT DEPRESSION AND WE'RE ON TRACK TO RECOVER FULLY ABOUT HALF THE AMOUNT OF TIME IT TOOK US TO RECOVER FROM THE GREAT RECESSION.

I THINK THAT'S IN LARGE PART THANKS TO A LOT OF THE POLICIES AND THE AMERICAN RESCUE PLAN ACT, AND THE CARES ACT AND SOME OF THOSE NORSE THAT PROVIDED SUPPORTS THAT KEPT DEMAND HIGH SO PEOPLE COULD STAY ON THE JOB, NOT LOSE THEIR JOB BECAUSE THEY COULD COULDN'T MAKING AND SELLING THINGS TO FOLKS, BUT ALSO BECAUSE IT KEPT PEOPLE ON THEIR FEET AND THEY WERE EASILY ABLE TO GO BACK TO WORK.

I THINK ONE OF THE REASONS IT'S SO TIGHT RIGHT NOW IS THE FACT THAT THERE ARE SOME FOLKS WHO ARE STILL ON THE SIDELINE, AND WHEN YOU LOOK AT THE DATA, THOSE ARE PRIMARILY FOLKS WHO ARE 55 AND OLDER.

THAT'S THE LARGEST GROUP OF FOLKS WHO HAVE LEFT THE LABOR MARKET AND ARE NOT LOOKING TO GET BACK INTO IT.

I THINK A LOT OF THAT COMES FROM HAVING A REALLY GOOD PORTFOLIO LAST YEAR.

AND SO THEY WERE ABLE TO RETIRE.

THE OTHER LARGE GROUP OF FOLKS ARE MOTHERS AND SPECIFICALLY MOTHERS OF YOUNG KIDS.

CHILD CARE BEFORE THE PANDEMIC WAS EXTREMELY HARD TO FIND, AND EVEN HARDER TO AFFORD, AND THAT HASN'T REALLY CHANGED SINCE THEN, AND SO THERE IS A LARGE NUMBER OF FOLKS WHO ARE STILL AT HOME CARING FOR THEIR KIDS.

IF YOU LOOK AT THE EMPLOYMENT-TO-POPULATION AMONG WORKING AGE FOLKS, ICE ABOUT 95% FOR FATHERS.

IT'S LESS THAN 70% FOR MOTHERS OF YOUNG CHILDREN.

INDEED, THE HIRING SIDE THEY DO A LOT OF INTERESTING RESEARCH AND THEY FOUND THAT 34% OF PRIME AGE MOMS OF YOUNG KIDS CITED CHILD CARE SPECIFICALLY AS THE REASON THEY'RE NOT IN THE LABOR FORCE RIGHT NOW.

SO I THINK ONE OF REASONS WAGERS RISING IS BECAUSE EMPLOYERS ARE LOOKING FOR FOLKS, AND EMPLOYEES SEE OPPORTUNITIES.

THEY SEE FOLKS OFFERING HIGHER WAGES OR BETTER WORKING SITUATIONS IN OTHER SECTORS OR IN OTHER BUSINESSES WITHIN THE SECTOR THAT THEY ARE IN, AND SO THEY'RE TAKING ADVANTAGE OF THAT.

AND ON THE OTHER SIDE OF THAT THERE ARE EMPLOYERS WHO ARE PROVIDING RAISES TO TRY AND RETAIN GOOD EMPLOYEES.

SO I THINK A TIGHT LABOR MARKET IS A GOOD THING.

WE TALK ABOUT THE FED -- THAL FEDERAL RESERVE AS BEING BOTH ABOUT TACKLING INFLATION, BUT THEIR OTHER MANDATE IS TO ACHIEVE FULL EMPLOYMENT, AND WE'RE PRETTY CLOSE TO THAT DEFINITION.

>> WHAT WOULD BE FULL EMPLOYMENT?

IS THERE A PERCENTAGE?

>> WELL, I MEAN -- >> DID 100% IS PROBABLY NOT THE REALISTIC.

>> RIGHT.

I MEAN, UNEMPLOYMENT RATE OF 3.7% IS PRETTY CLOSE.

I MEAN, IT'S REALLY GOOD.

>> SO FOR THOSE WHO ARE STILL PROPONENTS OF RAISING THE MINIMUM WAGION WHAT IT IS CURRENTLY, IF EMPLOYERS ARE DOING THAT ON THEIR OWN AND HAVING OTHER INCENTIVES AND BONUS AND RETENTION PAY, IS THAT EVEN A NECESSARY DISCUSSION TO HAVE AT THIS JUNCTURE?

>> I THINK IT IS IMPORTANT TO HAVE A WAGE FLOOR.

YOU DO NOT WANT TO HAVE A SITUATION WHERE PEOPLE CAN KIND OF FALL BELOW WHAT'S A LIVEABLE WAGE, AND CERTAINLY $7.25 IS NOT LIVEABLE.

YESTERDAY ACTUALLY MARKED 13 YEARS SINCE THE LAST TIME WE RAISED THE MINIMUM WAGE, AND SO, YOU KNOW, WE KNOW FROM THE DATA THAT ABOUT A QUARTER OF KENTUCKY WORKERS STILL EARN LESS THAN $15 AN HOUR.

WE KNOW ABOUT A THIRD OF WORKERS WOULD SEE A RAISE IF WE EVENTUALLY GOT UP TO $15 AN HOUR.

SO THERE IS A NEED I THINK, ESPECIALLY AMONG LOWER WAGE FOLKS, TO IMPROVE THAT.

WE KNOW THAT IMAGES WAR GETTING BETTER.

THE ONLY TWO INDUSTRIES THAT ARE SEEING REAL WAGE GROWTH BEYOND INFLATION ARE LEISURE AND HOSPITABLE, HOTELS AND RESTAURANTS, AND RETAIL.

SO THAT'S GOOD NEWS.

BUT I STILL THINK THE MINIMUM WAGE IS A GOOD POLICY, ESPECIALLY FOR LOWER WAGE FOLKS.

>> AND THOSE ARE TWO OF THE SECTORS THAT SUFFERED THE GREATEST DURING THE PANDEMIC.

PROFESSOR FOSL, I BELIEVE YOU WANTED TO CHIME IN HERE.

>> YEAH, I JUST WANTED TO ADD, A CURIOUS STATISTIC I'VE NOTICED ABOUT LABOR RECENTLY, THIS IS MAYBE A WORRISOME THING, AND I WANT TO SAY A GOOD THING, TOO, IS THIS WAS 2 THE BUREAU LABOR STATISTICS, AND IN THE WEEK ENDING JULY 9th, WHICH IS PRETTY RECENTLY, KENTUCKY RANKED SECOND IN NATION IN THE JUMP, INCREASE IN UNEMPLOYMENT CLAIMS.

AND I DON'T KNOW EXACTLY WHY THAT IS.

WHEN THE UNEMPLOYMENT IS SO LOW, AS YOU SAID, IT'S 3.6% OR SO, WE'RE SEEING A SHARP RISE IN UNEMPLOYMENT CLAIMS IN KENTUCKY.

MY SUSPICION IS THAT BECAUSE THE JOBS THAT ARE ON OFFER ARE NOT GOOD JOBS AND THAT IF WE REALLY WANT THE ECONOMY TO RECOVER, WE CAN'T JUST OFFER PEOPLE JOBS.

THEY HAVE TO BE SUBSTANTIAL JOBS.

AND, YEAH, I HOPE WE TALK ABOUT THAT AND ABOUT HOW TO TACKLE INFLATION TOO.

>> SO I WANT TO GET TO THAT POINT BECAUSE I SEE BOTH CHARLES AND DUSTIN WANTING TO CHIME IN HERE.

I'M GOING TO GO TO CHARLES FIRST ON THAT.

>> YEAH, I DO THINK IT'S IMPORTANT TO BE VERY CAREFUL IN HOW WE READ A LOT OF THOSE UNEMPLOYMENT CLAIMS DATA BECAUSE THOSE NUMBERS DO TEND TO MOVE AROUND QUITE A BIT.

JUST A MATTER OF A FEW WEEKS AGO WE ACTUALLY SAW AN EVEN LARGER INCREASE THAN WHAT WE EXPERIENCED JUST THIS PAST WEEK, SO IT'S IMPORTANT NOT TO READ TOO MUCH INTO THAT DATA AND TO ASSUME THAT THAT IS GOING TO BE INDICATIVE OF, SAY, A FORTHCOMING RECESSION, JUST AS AN EXAMPLE.

I KNOW MIKE CLARK AT UK I THINK WAS IN AN INTERVIEW WITH THE LEXINGTON HERALD ABOUT THIS.

I THINK WE GAVE REALLY GOOD ADVICE WHICH IS KEEP AN EYE ON THAT BUT KEEP TRACK OF THOSE LARGER MACROECONOMIC STATISTICS SUCH AS JOB GROWTH, OVERALL EMPLOYMENT RATE, AND THAT'S GOING TO BE A BETTER METRIC THAN UTILIZING LIKE ONE WEEK OF UNEMPLOYMENT CLAIMS AS AN INDICATOR.

>> JUSTIN, HOW DO YOU READ THAT, THOUGH?

>> I DON'T DISAGREE.

I DID WANT TO MENTION, THOUGH, BECAUSE I THINK UNEMPLOYMENT INSURANCE CLAIMS ARE A ACCIDENT INDICATOR OF THE KIND OF WHERE WE ARE IN THE MOMENT WEEK TO WEEK, UNEMPLOYMENT INSURANCE CLAIMS ARE ASTONISHINGLY LOW RIGHT NOW.

BEFORE THE PANDEMIC, WE WERE AVERAGING BETWEEN 20 AND 30,000 CONTINUED CLAIMS A WEEK.

THOSE ARE FOLKS WHO NEED MORE THAN ONE WEEK OF UNEMPLOYMENT INSURANCE TO GET BY ON.

RIGHT NOW WE'RE ANYWHERE BETWEEN 7,000 AND 9,000, WHICH I'VE LOOKED AT THE DATA GOING ALL THE WAY BACK TO 1987, AND I HAVE NOT FOUND ANOTHER TIME WHEN IT'S BEEN LIKE THAT, AND IT'S BEEN LIKE THAT SINCE OCTOBER OF 2021, SO I THINK FOLKS WHO WANT TO FIND WORK ARE ABLE TO DO THAT, BUT I DO AGREE WITH OUR OTHER GUEST THAT I THINK JOB QUALITY IS STILL AN ISSUE AND I THINK IT'S SOMETHING THAT NEEDS TO BE CONSIDERED.

WE DON'T PROVIDE, FOR EXAMPLE, PAID FAMILY LEAVE.

WE DON'T PROVIDE PAID SICK LEAVE.

I THINK THERE ARE STILL A LOT OF INDUSTRIES WHERE WAGES ARE LOW.

AND SO THERE SHOULD BE SOME ATTENTION PAID TO IMPROVING JOB QUALITY WHILE WE'RE -- ESPECIALLY NOW IN A REALLY INCREDIBLE LABOR MARKET INTEREST.

>> TO GO TO YOU NOW, PROFESSOR YELOWITZ.

>> FIRST OFF WITH RESPECT TO THE TIGHTNESS IN THE LABOR MARKET, AGREE 100% THAT SOME OF THE WITHDRAWALS DURING THE PANDEMIC, EVEN THOUGH WE'RE ACTUALLY STILL IN THE PANDEMIC, AMONG WOMEN, ESPECIALLY AND AMONG THOSE OVER AGE 55, REALLY MATTER FOR THE TIGHTNESS OF THE LABOR MARKET AND AMONG THOSE 55 AND OVER, FOR EXAMPLE, VIBRANT STOCK IN HOUSING MARKET THAT HAVE NOW SORT OF TAKEN A U-TURN, ESPECIALLY IN 2022, MAKES IT PROBLEMATIC, AND WHETHER OLDER WORKERS WILL BE ABLE TO REENTER THE MARKET AFTER AN EXTENDED STAY OUT IS OPEN TO QUESTION.

I SUPPOSE THE PLACE THAT WOULD BE INTERESTING FOR AT LEAST ME TO THINK ABOUT IF WE FEAR THIS A RECESSION IS COMING IS WHAT GOVERNMENT POLICIES MIGHT OR MIGHT NOT BE APPROPRIATE, AND WHAT'S SORT OF ASTONISHED ME IS THE TIGHTLESS OF THE LABOR MARKET WITHOUT MUCH GOVERNMENT INTERVENTION WITH RESPECT TO RAISING THE FEDERAL MINIMUM WAGE WHICH HAS BEEN $7.25 SINCE THE 2009 HAS MADE EVEN LOW COST OF LIVING AREAS LIKE KENTUCKY PLACES WHERE IT'S REALLY HARD TO HIRE ENTRY LEVEL WORK WITHOUT PAYING, SAY, $12 TO $14 AN HOUR.

I HAVE A FRIEND WHO I TEXTED BEFORE, BEFORE THE SHOW, ASKED HIM HOW MUCH HE -- HE OWNS SOME ARBY'S FRANCHISES -- ASKED HIM HOW MUCH IT WOULD COST FOR A UNSKILLED NEW ENTRY WORK, A TEENAGER, HE SAID 12 TO 14.

THAT'S ACHIEVED IN KENTUCKY, IN LEXINGTON WITHOUT EITHER A STATE WAGE FLOOR THAT'S HIGHER THAN THE FEDERAL OR OTHER INTERVENTIONS.

THERE ARE SOME STATES LIKE CALIFORNIA THAT HAVE GONE ALL THE WAY UP TO $15, BUT WHAT I WOULD WORRY ABOUT IS THAT IF A RECESSION COMES, AND I THINK THAT THERE IS REAL FEAR, THAT THAT BASICALLY HAMPERING BUSINESSES IN TERMS OF THEIR ABILITY TO ADJUST MIGHT MAKE IT MUCH MORE DIFFICULT TO REBOUND FROM THAT.

>> AND SO FOR MAYBE IT'S NOT JUST A TEENAGER WHO IS TAKING THAT ENTRY LEVEL INFORMATION FORE $12 TO $14, YOU THE ABOUT THEY'RE ALSO RENTING, AND THE REINVENTS GONE UP A MODEST ONE BEDROOM MIGHT COWS OVER $1,000, SO THAT $12 TO $14 YOU'RE ANGRY AN HOUR, HOW MANY HOURS WOULD YOU HAVE TO BE ABLE TO WORK BE THE ABLE TO AFFORD WITH ALONG WITH UTILITIES AND OTHER NECESSITIES?

IS THAT A POINT TO YOU, MR. FUGUEEL, THAT NEEDS A LITTLE BIT MORE -- ENTRY LEVEL RACES WHEN YOU LOOK AT THE PRICE OF RENT AND HOUSING THAT'S JUMPED SIGNIFICANTLY IN RECENT TIMES?

>> I THINK THAT'S WHY WE'VE HAD A MINIMUM WAGE SINCE THE ROOSEVELT ERA.

THE IDEA IS THAT YOU WANT AN HONEST DAY'S WORK TO HAVE AN HONEST DAY'S PAY, AND AN HONEST DAY'S PAY IS ONE THAT YOU CAN PROVIDE FOR YOUR FAMILY WITH, AND SO I DO THINK THERE HAVE BEEN SOME SIGNIFICANT GAINS IN WAGES LATELY BUT I DON'T NECESSARILY THINK THAT THAT MEANS WE SHOULDN'T HAVE A WAGE FLOOR THAT NO ONE CAN CALL BELOW.

>> AND SO $15 AS A MINIMUM WAGE AS HAS BEEN PROPOSED, IS THAT A LIVING WAGE?

>> DEPENDS ON WHERE YOU LIVE.

IT'S PROBABLY NOT A LIVING WAGE IN EXPENSIVE PARTS OF THE STATE LIKE LEXINGTON, BUT CERTAINLY IN OTHER PARTS OF THE STATE YOU MIGHT BE ABLE TO GET BY ON THAT.

>> PROFESSOR FOSL.

>> I JUST WANTED TO SAY ONE THING THAT'S BEEN HEARTENING TO ME THAT I HAVE OBSERVED, I THINK IT WILL BE RELATED TO COMPENSATION, I HOPE, IN THE MEDIUM RUN ANYWAY, HAS BEEN AN INCREASE IN UNION ACTIVITY.

SO WE HAVE SEEN A LOT OF ORGANIZING AROUND.

YOU'VE SEEN IT.

APPEND, SOME OF THE COFFEE SHOPS.

I WAS READING, BY THE WAY, THAT A LOT OF THE UNION LEADERS WERE LIBERAL ARTS STUDENTS, AND HOPEFULLY THAT WILL BRING A STRONGER WAGE STRUCTURE TO THE MARKET, AS LONG AS THAT UNION ACTIVITY CONTINUES.

AND I SUSPECT IT WILL, BUT AS LABOR IS TIGHT, IT GIVES MORE BARGAINING POWER TO WORKERS.

>> SO WHEN YOU SAY THERE'S AN INCREASE IN UNITY -- IN UNION ACT OF, PROFESSOR FOSL, DO YOU ALSO MEAN MEMBERSHIP?

WE KNOW THEY'RE ACTIVE WHEN WE LOOK AT THOSE HIGH PROFILE CASES INVOLVING AMAZON BUT IS SOMEBODY I THINKSHIP IN UNIONS INCREASING?

BECAUSE THEY'D BEEN ON THE DECLINE FOR SEVERAL YEARS.

>> UNION MEMBERSHIP IS VERY LOW, BUT I SAY STAY TUNED BECAUSE THESE ARE CONDITIONS THAT ARE RIPE FOR A GROWING LABOR, AND LET'S SEE.

>> SO I WANT TO ASK THIS SIDE OF THE TABLE, IS UNION ACTIVITY INCREASE AND UNION MEMBERSHIP INCREASE, IS THAT GOOD FOR -- ON YOUR SIDE OF THE TABLE?

>> I'VE SEASON SOME DATA TO SUGGEST THAT THERE'S CERTAINLY AN INCREASE IN UNION ACTIVITY AND PARTICULARLY WHEN IT COMES TO FORMATION OF NEW UNIONS.

I LIVE IN LOUISVILLE RIGHT NOW.

WE'RE CERTAINLY SEEING THAT WITH VARIOUS COMPANIES, VARIOUS POSITIONS HAPPENING RIGHT NOW.

I THINK ONE OF THE KEY THINGS TO KEEP IN MIND IS IT'S REALLY GOING TO COME DOWN TO WHAT EXACTLY THOSE PARTICULAR WORKERS LOOKING FOR AND ARE THOSE BUSINESSES ABLE TO MEET THOSE DEMANDS, AND I THINK WHEN YOU REALLY LOOK AT WHAT WE'RE LOOKING FOR, IT'S PRETTY VADER.

FOLKS ARE LOOKING FOR A WHOLE RANGE OF DIFFERENTLY THINGS.

COMPENSATION IS A REALLY BIG PART OF THAT.

THE RISE OF BENEFITS, THOUGH, IS SOMETHING THAT I THINK HAS REALLY CHANGED OVER THE PAST SEVERAL YEARS AND THAT'S PUT REALLY SIGNIFICANT PRESSURES ON EMPLOYERS WHERE PEOPLE NOT ONLY WANT TO SEE THINGS SUCH AS HEALTH CARE INSURANCE, WHICH IS INCREASINGLY BECOMING MORE EXPENSIVE FOR A LOT OF EMPLOYERS TO PROVIDE, BUT WE'RE LOOKING AT SAD ADDING VARIOUS CHILD CARE BENEFITS WHICH I THINK IS A GOOD THING, EDUCATION RELATED BENEFITS, INCREASED FLEXIBILITY IN WORK SCHEDULES, REMOTE WORK OPTIONS.

ONLY SOME OF THOSE THINGS ALL EMPLOYERS CAN OFFER.

SOME EMPLOYERS CAN OFFER A WHOLE VARIETY OF DIFFERENT THINGS.

SO I THINK IT'S GOING TO COME DOWN TO WHAT THOSE CONVERSATIONS LOOK LIKE AND THE ABILITY OF EMPLOYERS TO MEET THOSE DEMANDS.

AND BEAR IN MIND, EMPLOYERS REALLY DO WANT TO DO EVERYTHING THAT THEY CAN TO KEEP THOSE EMPLOYEES AND TO ATTRACT THOSE EMPLOYEES, AND SO I THINK IT SHOULDN'T BE LOOKED AT AS ANTI-DEFAMATION LEAGUE TAG NIS TIC SITUATION IN ANYWAYS.

THERE IS A LOT OF SHARED IN.

EMPLOYERS DESPERATELY NEED TO KEEP THOSE EMPLOYEES.

THEY WANT TO PROVIDE ROBUST BENEFIT PACKAGES.

THEY WANT TO PROVIDE THAT REFLECT THAT WORKERS ARE LOOKING FOR.

IT'S ALL ABOUT WHETHER OR NOT THE DOLLARS AND CENTS ADD UP AND THEY EVER ABILITY TO ACTUALLY DO THAT.

>> PROFESSOR YELOWITZ, TO THE POINT THAT I THINK DUSTIN PUGEL MADE EARLIER ABOUT PAID LEAVE AND THE DROVES OF WOMEN WHO HAVE LET THE WORKFORCE BECAUSE CHILD CARE AND OTHER CARE-GIVING OBLIGATIONS CAME FIRST, IF WE TALK ABOUT PAID LEAVE, FAMILY LEAVE POLICIES, WHY HAVEN'T WE GOTTEN THERE YET?

THAT SEEMS TO BE A BIPARTISAN AGREEMENT, THAT THERE SHOULD BE SOME MOVEMENT THERE.

>> A LOT OF THESE POLICIES ACTUALLY POLL POPULAR, FOR EXAMPLE, MINIMUM WAGE ALWAYS POLLS MORE THAN 50% SUPPORT, AND OFTEN THE HIGHER THE MINIMUM WAGE, THE MORE POLLS WILL SUGGEST THAT THERE'S SUPPORT, YET WE HAVEN'T SEEN A FEDERAL MINIMUM WAGE INCREASE IN 13 YEARS.

>> SINCE 2009.

>> AND A LOT OF THESE OTHER WHAT YOU MIGHT THINK OF AS MANDATES, FOR EXAMPLE, PAID SICK LEAVE, PAID FAMILY LEAVE, OTHERS THAT ARE A LITTLE MORE ESOTERIC LIKE PREDICTIVE SCHEDULING LAWS -- >> WHAT DOES THAT MEAN?

>> BASICALLY THERE ARE SOME GROUPS OF WORKERS WHERE YOUR SHIFT CAN CHANGE ON THE FLY, AND BASICALLY THERE ARE SOME STATES, LARGELY PROGRESSIVE STATES, MAYBE FIVE OR SUCTION OF THEM, THAT BASICALLY -- SIX OF THEM THAT OR LOCALITIES THAT PASSION LAWS THAT IN A SENSE PENALIZE POLICE OFFICERS IN THEY CHANGE SHIFTS.

AND MY VIEW, WHICH WOULD BE, OF COURSE, I THINK A BIT DIFFERENT THAN DUSTIN'S VIEW, THAT IS THAT THESE KIND OF ONE-SIZE FITS ALL POLICIES WHERE ESSENTIALLY WE'RE IMPOSING THAT ALL EMPLOYERS HAVE THE SAME SORT OF COMPENSATION PACKAGE, NOT JUST WAGE PACKAGE, BUT COMPENSATION PACKAGE IS ILL-ADVISED.

THE FIRST REASON WOULD BE AGAIN IF ECONOMIC CONDITIONS DECLINE, IT MAKESIT FAR HARDER TO ADJUST TO THOSE SORTS OF CONDITIONS, MAKING A RECESSION LONGER THAN IT OTHERWISE WOULD BE.

AND THEN SECOND, MUCH LIKE SOME OF THE DISCUSSION ABOUT THE LESS ANTAGONISTIC BARGAINING BETWEEN UNIONS AND THE COMPANIES, THEN BASICALLY GROUPS THAT LARGELY SHOULD TRY TO DECIDE WHETHER A COMPENSATION PACKAGE IS APPROPRIATE FOR THEM WOULD BE THE EMPLOYER AND THE EMPLOYEES.

P AS AN EXAMPLE, TECH COMPANIES.

MANY COMPANIES, OF COURSE, WENT TO REMOTE WORK WITH THE PANDEMIC, AND TECH COMPANIES HAVE BEEN SLOW -- HAVE BEEN SLOWER THAN MANY TO RETURN TO IN-PERSON WORK, IN PART BECAUSE IF THEY MANDATE THAT THEIR TECH WORKERS WHO CAN DO MOST OF THEIR JOB REMOTELY COME IN, WHAT THEY'LL DO IS GO WORK FOR ANOTHER COMPANY THAT'S ALSO A HIGH-PAYING TECH COMPANY AND DO THAT, SO IN A SENSE FEARING THE LOSS TALENT IS A GOOD REASON TO HAVE COMPENSATION PACKAGE THAT ALIGNS WELL WITH YOUR WORKERS.

AND SO THESE DISCUSSIONS ABOUT ONE SIZE FITS ALL I THINK GO AGAINST THE SPIRIT OF FRYING FOR LET COMPANIES AND WORKERS COME TOGETHER TO DECIDE WHAT PACKAGE IS BEST FOR THEM.

>> I THINK THAT'S ONE OF THE BENEFITS UNIONS.

IT'S THE IDEA THAT WORKERS HAVE SOME BARGAINING POWER AND SOME ABILITY TO ENGAGE WITH THEIR EMPLOYERS FOR THINGS.

I MEAN, ONE SIZE THAT FITS ALL OF US IS WE ALL GET SICK AND WAL ALL NEED TIME OFF OF WORK, AND SO I DO THINK THERE IS A GOOD ARGUMENT THAT THINGS LIKE PAID SICK LEAVE OR PAID FAMILY LEVEE ARE NOT ONLY GOOD D. LEAVE ARE NOT ONLY GOOD FOR THE EMPLOYEES WHO CAN USE THAT TIME TO GET WELL BUT THEY'RE ALSO GOOD FOR THE EMPLOYERS BECAUSE IT MEANS THEY CAN RETAIN THOSE FOLKS AND POSSIBLY NOT LOSE THEM BECAUSE THEY HAD TO TAKE TRAM SICK DAYS.

>> SO TALK ABOUT FEDERAL POLICIES OR IDEAS THAT WOULD OR WOULD NOT HELP THE ECONOMY AND WORKERS AND BUSINESSES, YOU THE ABOUT LET'S TALK ABOUT STATE POLICIES THAT HAVE ALREADY BEEN ENACTED THAT YOU THINK DO WHAT FOR WHOM?

DUSTIN PUGEL.

I'M GOING TO LEAVE IT VERY OPEN-ENDED.

>> THAT WAS VERY OPEN-ENDED.

WELL, WE HAVE SEVERAL PROGRAM IN KENTUCKY THAT REALLY HELP TO KEEP PEOPLE ON THEIR FEET.

WE ALL THESE SAFETY NET PROGRAMS, RIGHT?

SO I THINK THAT'S KIND OF WHERE YOU'RE HEADED WITH THIS.

WE PROVIDE FOOD ASSISTANCE.

WE PROVIDE MEDICAL ASSISTANCE.

WE PROVIDE BASIC CASH ASSISTANCE FOR EXTREMELY LOW INCOME FAMILIES WITH CHILDREN.

AND WE PROVIDE SOME INCOME REPLACEMENT FOR FOLKS WHO LOSE THEIR JOB THROUGH NO FAULT OF THEIR OWN.

I REALLY THINK IT'S IMPORTANT TO VIEW THESE PROGRAMS AS NOT JUST SORT OF PROGRAMS FOR THE LEAST OF THESE, WHICH THEY ARE, BUT REALLY PROGRAMS FOR UNFORTUNATELY ALL OF US, INCLUDING WORKER FAMILIES, AND SO IT'S IMPORTANT, I THINK, WHEN YOU LOOK AT THING LIKE MEDICAID CONSIDER IT NOT JUST AS KEEPING PEOPLE WELL, WHICH IT DOES DO, BUT IT ALSO MAKES SURE THAT PEOPLE DON'T GO BANKRUPT BECAUSE OF MEDICAL DEBT.

ITING SURES THAT PEOPLE CAN GET BACK ON THEIR FEET IF THEY HAVE A SUBSTANCE USE DISORDER.

IT REALLY I THINK IS IN A LOT OF WAYS A SUPPORT FOR WORKERS AND NOT JUST SOMETHING THAT WE I THINK OFTEN THINK OF IT AS, WHICH IS HANDOUT OR SOMETHING LIKE THAT.

IT RALLY IS A HAND UP FOR WORKING KENTUCKIANS.

>> BUT THERE HAVE BEEN SOME REVISIONS TO SOME OF THE REQUIREMENTS AND RULES FOR FOOD STAMPS OR SNAP, SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM, AND WE'VE EVEN HEARD THE GOVERNOR OF LATE TALKING ABOUT WHAT HE'S HEARING FROM FAMILIES WHO USED TO GET MORE ASSISTANCE THAT THEY'RE NOT AND THEY'RE NOT IN A GOOD SITUATION RIGHT NOW.

>> THAT'S RIGHT.

SO DURING THE PANDEMIC CONGRESS GAVE STATES THE OPTION TO PROVIDE THE FULL SNAP AMOUNT.

SO IN NORMAL TIMES AND CURRENTLY, SNAP BENEFITS ARE PRORATED BASED OFF OF YOUR INCOME TO SMOOTH OUT WHAT'S SOMETIMES CALLED THE BENEFIT CLIFF SO AS YOU EARN MORE, YOU GET LESS IN SNAP DOLLARS, SO THERE'S NOT AI POINT IN TIME YOU LOSE A WHOLE LOFTY MONEY.

I THINK THE MINIMUM BENEFIT IS ABOUT $20.

DURING THE PANDEMIC, HOWEVER, CONGRESS ALLOWED STATES TO PROVIDE WHAT ARE CALLED EMERGENCY ALLOTMENTS WHICH WERE THE FULL SNAP BENEFIT NOT PRORATED FOR INCOME, AND THAT WAS INCREDIBLE HELPFUL FOR FAMILIES TO PUTTER FOOD ON THE TABLE.

IT REPLACINGED A LITTLE BIT OF INCOME SO THEY CAN KEEP THEIR LIGHTS ON OR PAY FOR GAS.

AND IT WAS ALSO GOOD FOR RETAILERS.

THERE ARE ABOUT 4600 I THINK SNAP RETAILERS IN THE STATE, GROCERY STORES, CONVENIENCE STORES.

IT HELPED PEOPLE STAY ON THE JOB THERE INVESTMENT.

SENATE JOINT RESOLUTION 150 THIS PAST SESSION, HOWEVER, TOOK AWAY ONE OF THE TWO REQUIRED ASPECTS TO BE ABLE TO CONTINUE TO PROVIDE THOSE EMERGENCY ALLOTMENTS, SO THERE HAS TO BE A FEDERAL PUBLIC HEALTH EMERGENCY AND THEN A STATE STATE OF EMERGENCY AI RELATED TO COVID.

THIS ENDED THAT STATE OF EMERGENCY.

AND SO FOOD BENEFITS DROPPED BY ABOUT $100 PER PERSON ON AVERAGE, MUCH MORE FOR FOLKS WHO EITHER EARNED CLOSER TO THAT INCOME LINE OR WHO HAD MORE FOLKS IN THEIR HOUSEHOLD.

IT WAS I THINK REALLY A HARDSHIP FOR A LOT OF FOLKS RIGHT NOW, AND IT WAS EVENTUALLY GOING TO GO BEAT UP LOOKS LIKE RIGHT NOW IT MAY GO AWAY IN NOVEMBER AT THE SOONEST BUT THAT MEANS THE STATE IS LOSING OUT ANYWHERE BETWEEN $40 MILLION AND $50 MILLION A MONTH IN THE MEANTIME WHICH MEANS WE COULD LOOSE UP TO $350 MILLION IN GROCERY MONEY DURING THAT TIME.

IT IS A PANDEMIC ERA OF SUPPORT BUT IT WAS A VERY REAL SUPPORT AND I THINK PEOPLE ARE FEELING THAT LOSS.

>> PROFESSOR YELOWITZ, CAN YOU CHIME IN HERE TO THE WISDOM OF SENATE JOINT RESOLUTION 150 THAT WOULD HAVE ENDED THAT COVID PANDEMIC RELIEF.

>> LET'S SEE.

WELL, I CAN TALK A LITTLE BIT ABOUT THAT.

SO DUSTIN I THINK IS FAR MORE IMMERSED IN THE ACTUAL DETAILS OF SOME OF THE LEGISLATION COMING OUT OF FRANKFORT, BUT A FEW OF THE THINGS THAT WE TALKED ABOUT, ONE IS WHAT IS THE BENEFITS CLIFF.

SO FOR ALL OF THESE SOCIAL INSURANCE PROGRAMS, THE LOWER YOUR INCOME, THE MORE PROGRESSIVE THESE PROGRAMS ARE WHERE WHEN YOU EARN EXTRA MONEY WE START TO REDUCE THOSE BENEFITS.

WHAT TURNS OUT TO BE THE CASE FOR A LOT OF PEOPLE WHO ARE ON, SAY, SNAP, MEDICAID, CASH ASSISTANCE, HOUSING ASSISTANCE IN VARIOUS WAYS IS THAT IF YOU GOT A FULL-TIME JOB AT A FAIRLY LOW WAGE, YOU'RE ACTUALLY NOT REALLY BETTER OFF THAN YOU WOULD BE IF YOU HAD EARNED ESSENTIALLY ZERO INCOME BECAUSE WE START TO CLAW BACK THESE BENEFITS.

NOW, WHEN I HEAR THE WORDS "BENEFITS CLIFF" WHAT I THINK IS IS NOT SIMPLY THE HIGH TAX RATE.

WHAT WE WOULD SAY THE TAX RATE IS AS I EARNING A EXTRA $100 WE TAKE AWAY $90 IN BENEFITS FROM SNAP WHICH CREATES STRONG WORK DISINCENTIVES, BUT I THINK THE PLACE MOST VIVIDLY ABOUT A BENEFITS CLIFF THAT HAS BEEN LONGSTANDING, FIRST PUBLISHED PAPER I EVER HAD ON 27 YEARS AGO WAS ON BENEFIT COUNTRY IN THE MEDICAID PROGRAM, AND MEDICAID RIGHT NOW, IF YOU'RE AN ADULT BETWEEN 19 AND 64 WHO WAS MADE ELIGIBLE BY THE ACA EXPANSIONS FROM 2014 ONWARD, THEN THE INCOME LIMIT TO QUALIFY IN 2022 FOR A FAMILY OF FOUR IS ABOUT $38,295.

WHAT HAPPENS IF YOU EARN AN EXTRA DOLLAR ABOVE AND BEYOND THAT?

THE CLIFF, IF YOU WILL, IS THAT YOU WOULD LOSE MEDICAID IN ITS ENTIRETY.

NOW, IF THAT HAPPENED, IT'S NOT LIKE YOU WOULD NECESSARILY BECOME UNINSURED BECAUSE THERE'S FAIRLY HIGHLY SUBSIDIZED PRIVATE INSURANCE FROM THE EXCHANGE THAT YOU COULD AVAIL YOURSELF OF, BUT NONETHELESS, THERE ARE BIG CHANGES IN THE BENEFITS PURPOSE SORT OF FALL OFF THE CLIFF WHERE YOU EARN A LITTLE BIT EXTRA AND YOU'RE ACTUALLY FAR WORSE OFF.

SO NOT THAT YOU'RE ONLY GETTING 10% OF WHAT YOU HAVE EARNED BUT YOU'RE LOSING FAR MORE THAN WHAT YOU HAVE EARNED.

SO THOSE TEND TO CREATE FAIRLY DRAMATIC WORK DISINCENTIVES.

IT MAKES PEOPLE FEARFUL OF BEING ON THE WRONG SIDE OF THE CLIFF.

AND THERE'S A LOT OF AGREEMENT, I THINK, THAT THOSE CAN BE PRETTY HARMFUL.

>> IN FACT, THERE IS A TASK FORCE RIGHT NOW IN THE KENTUCKY GENERAL ASSEMBLY TO LOOK AT THAT.

THEY JUST MET LAST WEEK.

>> YEAH, SKI THINK THAT'S GOING TO BE A REALLY IMPORTANT TASK FORCE, AND THEY'RE STUDYING AN ISSUE THAT I THINK IS INCREDIBLY COMPLICATED BECAUSE NOT ONLY ARE YOU DEALING WITH AN ISSUE THAT IS JUST INCREDIBLY DENSE IN AND OF ITSELF, THE BENEFIT CLIFF CONCEPT, YOU'RE DEALING WITH A MULTITUDE OF BENTLEY PERHAPS.

I DO WANT TO SAN ANDREAS THAT THE BENEFIT CLIFF IS, A VERY REAL ONE FACED BY INDIVIDUALS BUT IN THE BUSINESS COMMUNITY THIS IS SOMETHING WE HEAR FROM EMPLOYERS ON A REALLY FREQUENT BASIS.

WAS TALKING WITH AN EMPLOYER JUST A MATTER OF MONTHS AGO IN THE EASTERN PART OF THE STATE WHO TALKED ABOUT HOW THEY WANTED TO INCREASE WAGES TO ATTRACT AND RETAIN MORE WORKERS.

WHEN THEY DID THAT, THOUGH, THEY ENDED UP HAVING A NEGATIVE IMPACT ON THEIR CURRENT WORKFORCE BECAUSE THAT WAGE INCREASE WOULD HAVE ULTIMATELY PUSHED THEM ABOVE A FLESH HOLD AND THEY WOULD HAVE LOST CERTAIN TYPES BENEFITS.

SO I THINK IT'S IMPORTANT THAT THE GENERAL ASSEMBLY DIVE INTO THIS.

I THINK IT'S GOING TO REQUIRE A TREMENDOUS AMOUNT OF NUANCE, A LOT OF FEEDBACK FROM VARIOUS STAKEHOLDERS BECAUSE ULTIMATELY WHEN IT COMES TO DEALING WITH THESE BENEFIT CLIFFS, I THINK ONE OF THE BEST WAYS TO GO ABOUT DOING IT IS TO TRY TO SMOOTH THEM OUT WHERE INSTEAD OF HAVING A CLIFF YOU HAVE A TEARING STRUCTURE.

WE HAVE EXPERIMENTED A LITTLE BIT IN KENTUCKY WITH OUR CHILD CARE INCENTIVES PROGRAM WHERE WE SET THE INITIAL ELIGIBILITY THRESHOLD I THINK WE WERE AT 165% FPL.

>> FEDERAL POSITIVITY LEVEL.

>> AND THEN AT THE THEY SET A CERTIFICATION LEVEL AT 200%.

THAT MEANS FETE YOU INITIALLY QUALIFY FOR THAT BENEFIT YOU CAN CHANGE A LITTLE BIT MORE.

WE HAVE DABBLED WITH THAT TERRITORY CAN ALREADY AND THAT'S SOMETHING WE'RE GOING TO HAVE TO EXPERIMENT.

THE PROBLEM IS YOU HAVE MULTIPLE BENEFIT PROGRAMS AT THE SAME TIME SO HOW DO YOU THREAD THAT NEEDLE.

>> RIGHT, DO YOU HOW DID YOU STANDARDIZED THAT.

>> JUST TO CHIME IN ON THE BUSINESSSIDE AS WELL, SOMETHING I REMEMBER VIVIDLY FROM WHEN THE AFFORDABLE CARE ACT WAS PASSED, THERE WERE LINES THAT WERE DRAWN IN.

OBVIOUSLY WHEN YOU WRITE LEGISLATION, YOU NEED TO CREATE GROUPS, BUT, FOR EXAMPLE, FOR BUSINESSES BE A FULL-TIME WORKER WAS DEFINE AS THOSE WORKING 30 OR MORE HOURS PER WEEK, AND THAT IN A SENSE IMPOLICE INDUSTRY CREATES A ACCUMULATE 29 HOURS, AND BACK IN THE DAY YOU ACTUALLY HEARD OF EMPLOYERS PERHAPS YOU GO JELING AROUND SCHEDULES SO THAT THEY HAD -- JUGGLING SCHEDULES SEE THEY HAD PART-TIME, NOT FULL-TIME EMPLOYEES SO THEY NOT HAVE TO PROVIDE HEALTH INSURANCE FOR THEM.

SIMILARLY THERE ARE WHAT YOU MIGHT CALL CLIFFS WITH RESPECT TO EMPLOYMENT SIZE.

ONCE YOUR COMPANY REACHES 50 EMPLOYEES ARE WITH 200 EMPLOYEES, THEN A SET OF DIFFERENT MANDATES COMES IN AS WELL.

AND SO ALL OF THESE ARE RELATED IN SOME SENSE.

THEY CREATE DIVERSE INCENTIVES AS YOU GET CLOSING TO THE LINE AND STRATEGICALLY WE WOULD THINK THAT PEOPLE WOULD WANT TO BE ON ONE SIDE OF THE LINE OR ANOTHER BECAUSE IT TEND TO BE PRETTY COSTLY.

AND THE TRADEOFF AGAIN IS YOU HAVE TO DRAW LINES E. EVERY ONCE IN A WHILE.

>> PROFESSOR FOSL.

>> YEAH, I JUST WANTED TO ADD, FIRST OF ALL, I PRETTY MUCH AGREE WITH THE THINGS THAT HAVE JUST BEEN SAID BY CHARLES AND AARON.

IT IS A COMPLICATED ISSUE AND I SORT OF FAVOR A GRADUATED AND EVEN DELAYED STEPPING DOWN OF BENEFITS TO HELP DEAL WITH THE CLIFF.

BUT I ALSO WANTED TO MAKE A COMMENT ABOUT SORT OF BIGGER PICTURE THING.

ONE -- SEVERAL THINGS I THINK WE LEARNED FROM THE PAST FEW YEARS, AND ONE IS THAT THESE BENEFIT PROGRAMS DO WORK.

I MEAN, JUST THE INCREASE IN EARNED INCOME TAX CREDIT REDUCED CHILD POVERTY ENORMOUSLY IN THE COUNTRY, AND MANY OF THE OTHER PROGRAMS THAT WERE STEPPED UP, UNEMPLOYMENT, ET CETERA, WERE VERY EFFECT OF.

SO NOW IT IS PRETTY CLEAR TO THAT THESE ARE VERY EFFECT OF PROGRAMS AND DO ENHANCE PEOPLE'S WELL-BEING.

SIMILARLY, FOR THE ALL FLAWS IN OUR -- THE WAY WE HAVE DEALT WITH THE PANDEMIC, WHEN YOU HAVE SEEN THAT BIG COLLECTIVE ACTION, AND IT WILL TAKE SOME KIND OF ACTION, SOME KIND OF PROACTIVE, YOU KNOW, PROGRAMS THROUGH GOVERNMENT, AND I THINK THOSE ARE TWO PERSON THINGS, TAKEAWAYS THAT WE OUGHT TO HAVE HERE.

OF COURSE, WE HAVE ON FIGURE OUT A WAY TO DO THESE THINGS IN A WAY THAT DOESN'T DRIVE US INTO DEEPER INFLATION, BUT I THINK A STRONG CASE COULD BE MADE NOW FOR EXPANDING AND MAINTAINING VERY ROBUST PUBLIC SUPPORT PROGRAMS.

>> I'LL ASK YOU, DO YOU THINK THE CASE HAS BEEN MADE FOR THAT?

AND DO YOU SUPPORT A TIERED APPROACH TO AVOIDING A BENEFITS CLIFF?

>> ABSOLUTELY.

I THINK THERE'S A REAL BENEFIT TO HAVING A ROBUST SET OF SUPPORTS FOR FOLKS, ESPECIALLY AS WE HEAD INTO WHAT MAY OR MAY NOT BE A RECESSION.

I THINK IT'S IMPORTANT TO HAVE THOSE, THOSE SUPPORTS READY FOR FOLKS, AND I THINK HE WAS MENTIONING THE CHILD TAX CREDIT AS AN EXAMPLE THAT PROVIDED DIRECT CASH PAYMENTS TO PARENTS WITH KIDS THAT CUT THE CHILD POVERTY RATE IN KENTUCKY IN HALF.

I MEAN, IT REALLY WAS REMARKABLE, AND I THINK THAT'S WHY IT HAS WIDE BIPARTISAN SUPPORT.

WHEN IT COMES TO THE BENEFITS CLIFF, THE TASK FORCE WAS I THOUGHT REALLY GOOD, ESPECIALLY THE PRESENTATION BY KY STATS, WHERE THEY WERE DESCRIBING, YOU KNOW, SORT OF IN GRAPHIC FORM WHAT THAT LOOKS LIKE, AND IT WAS REMARKABLE TO ME HOW THE LARGEST CLIFF ACTUALLY, EVEN THOUGH IT IS SOMEWHAT GRADUATED, COMES FROM CHILD CARE ASSISTANCE.

BECAUSE WHEN YOU LEAVE MEDICAID, YOU HAVE A ROBUST SET OF PREMIUM TAX CREDITS ON THE MARKETPLACE AND WITH SNAP AND K TAP WHICH IS OUR BASIC CASH ASSISTANCE PROGRAM, THEY REALLY ARE GRADUATED DOWN PRETTY WELL.

WITH CHILD CARE SYSTEMS THERE IS A PRETTY STEEP DROP-OFF, AND THAT'S EVEN WITH OUR CURRENT SYSTEM WHICH IS MUCH MORE ROBUSTY BECAUSE WE STILL HAVE AMERICAN RESCUE PLAN ACT DOLLARS THAT ARE PROPPING IT UP.

WHEN THAT MONEY GOES AWAY, I AM CONCERNED ABOUT WHAT THAT'S GOING TO MEAN NOT ONLY FOR THE FOLKS WHO USE THOSE PROGRAMS BUT ALSO FOR CHILD CARE PROVIDERS TO HAVE BEEN ABLE TO RAISE WAGES IN THE MEANTIME BECAUSE OF THOSE SUPPORTS.

AND WHEN THOSE SUPPORTS GONE, WHAT DOES THAT MEAN FOR AN INDUSTRY THAT'S ALREADY BEEN IN CRISIS FOR A LONG TIME.

>> WHAT'S YOUR OPINION ABOUT WHAT WAS DRIVING THE CONVERSATION IN KENTUCKY DURING THE MOST RECENTLY LEGISLATIVE SESSION ABOUT CHANGING THE PUBLIC BENEFITS STRUCTURE?

WE OFTEN HEARD ABOUT FRAUD AND ABUSE.

IS THERE EVIDENCE TO SUPPORT THOSE CLAIMS AND ASSERTIONS, THAT THERE'S ENOUGH OF THAT IN EXISTENCE TO ACTUALLY HAVE GONE THE APPROACH THAT POLICYMAKERS CHOSE TO IN THE 2022 LEGISLATIVE SESSION?

>> WELL, WITH REGARDS TO HOUSE BILL 7, WHICH WAS PRIMARILY RELATED TO, AGAIN WITH MEDICAID, SNAP AND K IS THE STEP WANT THE CONVERSATION REALLY WAS AROUND FRAUD AND I THINK THAT'S UNIVERSITY OF BECAUSE BY AND LARGE WHILE FRAUD DOES EXIST NEVER PROGRAM, HI WE SAW THAT A LITTLE BIT WITH UNEMPLOYMENT INSURANCE AND MAYBE MORE THAN A LITTLE BIT.

WITH SNAP IN PARTICULAR IT IS VERY LOW.

FRAUD, SPECIFICALLY WHAT THEY CALL INTENTIONAL PROGRAM VIOLATIONS, WHICH IS WHEN SOMEONE'S INTENTIONALLY GIVING INCORRECT INFORMATION, IS LESS THAN 1%.

BENEFITS TRAFFICKING, WHICH IS WHEN YOU SELL THE VALUE OF YOUR SNAP BENEFITS ON YOUR EBT CARD IS LESS THAN 2%.

AND THOSE ARE NUMBERS FROM BOTH THE USDA WHICH SORT OF GOVERNS CINCINNATI ON FEDERAL LEVEL AND DCBS HERE IN KENTUCKY.

SO MEDICAID FRAUD IS ALSO, YOU KNOW, EXTREMELY LOW.

PEOPLE DON'T APPLY TO GET THEIR BENEFITS.

AND IF THEY DID, THEY WOULD BE CAUGHT BECAUSE WE HAVE ALL THESE CROSS-SECTIONS OF DATABASES THAT FOLKS HAVE TO LOOK THROUGH.

IF YOU LOOK AT THE DCBS MANUAL THAT CASEWORKERS -- >> THAT WAS THE DEPARTMENT FOR COMMUNITY-BASED SERVICES.

>> THAT'S RIGHT, AND THEY MANAGE ELIGIBILITY FOR THESE PROBLEMS.

THE DCBS MANUAL FOR SNAP ALONE IS 300 PAGES.

IF YOU LOOK AT ALL THE PAGES TOGETHER IT'S WELL OVER 1 HOW.

AND SO WHEN YOU APPLY FOR BENEFITS YOU'RE BASICALLY GETTING FILTERED THROUGH ALL 1,000 PAGES TO MAKE SURE YOU'RE ELIGIBLE AND MAKE SURE YOU'RE MAINTAINING ELIGIBILITY AND ARE THERE ARE A WHOLE FLEET OF FOLKS WHO ARE CONSTANTLY MONITORING THAT.

SO I THINK BY AND LARGE IT'S IMPORTANT TO REMEMBER THAT EVERY TIME YOU ADD A PAGE TO THAT MANUAL, YOU'RE ADDING A NEW BARRIER TO BEING ABLE TO GET THAT ASSISTANCE.

AND FOR, AGAIN, THE OVERWHELMING MAJORITY OF FOLKS IN KENTUCKY, THEY'RE JUST TRYING TO GET BY.

THEY JUST NEED TO GET TO A DOCTOR, JUST NEED TO GET FOOD ON THEIR TABLE, KEEP THEIR LIGHTS ON.

AND SO IT'S IMPORTANT TO MAKE SURE THAT THESE PROMS PROGRAMS ARE ACCESSIBLE TO FOLKS, THEY'RE EASY TO APPLY FOR AND IT'S EASY TO MAINTAIN YOUR ELIGIBILITY THROUGH COMMUNICATION WITH THE STATE.

>> CHARLES, DO YOU HAVE ANYTHING TO ADD?

AND THE ADMINISTRATIVE COSTS THAT IT CAN TAKE TO ADMINISTRATOR A PROGRAM LIKE THIS, IS THERE EXISTING STAFF THAT CAN ABSORB ALL OF THE THOSE DUTIES AND THAT EXTRA 1,001 PAGE THAT WOULD BE REQUIRED?

>> SO AT THE KENTUCKY CHAM BEER BERE WE DIDN'T HAVE A POSITION ON HOUSE BILL 7.

WE CERTAINLY WASHED IT CLOSELY.

I DO THINK THAT THAT WAS AN ISSUE THAT WAS WELL WORTH LOOKING INTO ON THE PART OF THE LEGISLATURE.

WE ARE A VERY HIGH GOVERNMENT TRANSFER AT A TIME MEANING THAT WE DO BRING IN A LOT OF FEDERAL AND STATE RELATED BENEFITS, AND KENTUCKY HAS ALWAYS HAD AN ATTITUDE OF BEING SOMEWHAT SATISFIED WITH THAT STATUS QUO, E I THINK IT'S VERY REASONABLY TO TAKE A DEEP DIVE INTO THOSE ISSUES AND TRY TO DISSECT WHY DO WE HAVE SUCH HIGH RATES OF GOVERNMENT TRANSFER, WHY DO WE HAVE SO MANY PEOPLE PENTED ON BENEFITS AND IS THERE SOMETHING STRUCTURAL.

I DO THINK FRAUD IS ULTIMATELY WORTH LOOKING INTO AND THIS IS SOMETHING HA THAT SHOULD BE CLOSELY TRACKED.

THIS HAS BECOME PARTICULARLY IMPORTANT WITH UNEMPLOYMENT INSURANCE WHERE WE'RE NOT ONLY EXPERIENCING INTENTIONAL FRAUD BUT WE -- UNINTENTIONAL BUT WE DO HAVE ORGANIZED EFFORTS TO TRY TONIGHT FILL AT ANY RATE ON UNEMPLOYMENT SYSTEM SO THAT'S AN AREA WHERE WE SHOULD BE DOING MORE THAN WE'RE CURRENTLY DOING TO CRACK DOWN ON FRAUD BECAUSE ULTIMATELY THESE ARE IMPORTANT RESOURCES, AND EVEN THOUGH IT MIGHT COST SOME ADDITIONAL FUNDS UP FRONT TO TRACK THEM DOWN AND DEAL WITH THOSE TYPES OF ISSUES, OFTENTIMES I THINK IT MIGHT BE WORTH IT AT THE EBBED OF THE DAY.

>> PROFESSOR YELOWITZ.

>> A COUPLE OF THOUGHTS.

FIRST OFF, I THINK MOST PEOPLE WOULD AGREE THAT ANY PROGRAM WHERE TAXPAYERS ARE GIVING SUPPORT SHOULD HAVE INTEGRITY, AND WHAT I MEAN BY INTEGRITY IS THAT PEOPLE WHO SHOULD BE ON THE PROGRAM ARE ABLE TO GET ON IT WITHOUT FORMIDABLE BARRIERS, THAT'S SOMETHING THAT DUSTINSOME OF THIS HIS WRITINGS HAS CERTAINLY EMPHASIZED BUT AS WELL A PROGRAM WITH INTEGRITY MEANS THAT PEOPLE WHO SHOULDN'T BE ON THE PROGRAM AREN'T ON THE PROGRAM.

THERE'S VERY LITTLE DISPUTE ABOUT THE STATEMENTS JUST MADE.

WITH RESPECT TO HOUSE BILL 7, ACTUALLY I LEARNED INDIRECTLY THROUGH A FRIEND OF HOURS THAT SOME OF MY WORK FROM 2017 WAS ACTUALLY INVOLVED IN FORMULATING HOUSE BILL 7.

SO WHAT I DID IN 2017, THERE ARE GOVERNMENT SURVEYS THAT ARE OUT THERE THAT WILL ASK RESPONDENTS, FOR EXAMPLE, IF THEY'RE ON MEDICAID, ASK THEM QUESTIONS ABOUT THEIR INCOME AND SO FORTH, AND SO DID I SOME TABULATIONS, AND I LOOKED AT THE YEARS 2013 AND 2014.

2014 BEING THE FIRST YEAR AFTER THE AFFORDABLE CARE PRESERVES REGARDING MEDICAID WERE PASSED.

I FOUND THAT UNSURPRISINGLY THERE WERE A LOT OF POUR MORE PEOPLE ON MEDICAID AFTER YOU EXPANDED THE PROGRAM BUT BY MY ESTIMATE DEPENDING HOW YOU SLICED AND DICED THERE MAY BE BE 300,000 PEOPLE WHO SHOULDN'T BE ON THE PROGRAM WHOSE INCOMES WERE TOO HIGH.

THIS IS SURVEY DATA.

IT HAS ALL SORTS OF FRAILTIES TO IT.

ABOUT IT WROTE MY PAPER THEY OFFICE OF ATTORNEY GENERAL DID A MUCH MORE FORENSIC INVESTIGATION OF 120 APPLICANTS AND BASICALLY EXTRAPOLATED OUT AND WHAT THEY ESTIMATED WA ESSENTIALLY THERE ABOUT WITH 35,000 POTENTIALLY INELIGIBLE PEOPLE IN AT LEAST THE INITIAL YEARS OF EX PAnd MEDICAID.

AND SO WHAT I WOULD VIEW IS THAT WHAT HOUSE BILL 7 IS DOING IS TRYING TO PROVIDE WHAT I WOULD CALL MORE INTEGRITY, AND WHAT I WOULD THINK ABOUT THAT IS PRESUMABLY THAT SHOULD COME WITH BOTH RESOURCES TO SHEPHERD THE PEOPLE WHO LEGITIMATELY SHOULD BE ON THE PROGRAM THROUGH THE PROGRAM BUT ALSO MAKING SURE PEOPLE THAT SHOULDN'T AREN'T ON THE PROGRAM.

ONE OF THE THINGS WHICH I'D WANT TO EMPHASIZE IS SOME OF THE WAYS IN WHICH PEOPLE MIGHT BE ABLE TO QUALIFY FOR MEDICAID, AND I'M LESS FAMILIAR WITH SNAP THAN I AM WITH MEDICAID, IS YOU MIGHT, FOR EXAMPLE, ATTEST TO YOUR INCOME AND FAMILY STRUCTURE, WHICH ESSENTIALLY IS NOT REALLY PROVIDING DOCUMENTATION, AND IF SPIRIT OF WHAT HB 7 WOULD DO IS ANY IN A SENSE PROVIDE MORE DOCUMENTATION.

NOW -- >> MORE FREQUENTLY?

>> MORE FREQUENTLY AND MORE DOCUMENTATION TO WIN WITH.

ATTESTATION WOULD MEAN, I HAVE X DOLLARS, AND AT LEAST THAT STARTS THE PROCESS.

ME QUALIFYING FOR MEDICAID, PERHAPS FOR SNAP AS WELL, AND THEN IF X DOLLARS NOT THE CORRECT AMOUNT, THEN PERHAPS I SHOULDN'T QUALIFY.

AND SO THE WAY I COME AT IT, AT LEAST, IS WE SHOULD HAVE THE RESOURCES TO SHIFT PROCESS APPLICATIONS WITH DOCUMENTATION THAT IN A SENSE MAKES IT SO THAT TAXPAYERS FEEL CONFIDENT THAT THEIR DOLLARS ARE BEING SPENT CORRECTLY ON THE PEOPLE WHO THE PROGRAM IS INTENDED FOR.

AND THIS IS AN AREA WHERE IF YOU WANT TO CALL IT IMPROPER ENROLLMENT OR FRAUD, THOSE ARE CHARGED TERMS AFTER 2020, AUTO BUTT AT LEAST IN MY VIEW WITH RESPECT TO TRANSFER PROGRAMS OR AT LEAST MEDICAID WHICH I HAVE LOOKED AT, IT IS NOT A SPECK OF SAND ON THE BEACH BUT IT'S'LL STEAL A NON-TRIVIAL ISSUE.

ONE THING OR TWO FINAL THINGS ON THAT, THE MEDICAID PROGRAM OVERALL IS ABOUT $660 BILLION, ABOUT A "B," IN FISCAL YEAR 2020.

DO YOU KNOW HOW MUCH IMPROPER PAYMENTS WERE, ACCORDING TO SOME GOVERNMENT REPORTS JOB JUST UNDER THE TRUMP ADMINISTRATION AND THEN BIDEN ADMINISTRATION AS WELL?

FISCAL YEAR 2020, $100 BILLION IN IMPROPER PALPITATIONS.

SO THOSE ARE NOT SMALL SMALL NUMBERS.

$100BILLION STILL MEANS SOMETHING P THAT'S ONE THING.

THE FINAL THING I WOULD WANT TO MENTION IS THAT KENTUCKY'S MEDICAID ENROLLMENT PRIOR TO THE AFFORDABLE CARE ACT WAS ABOUT $600,000 PER MONTH.

ANY IDEA WHAT IT IS NOW?

AND I'M TALKING TO TWO PEOPLE OR MANY PEOPLE IN THIS ROOM WHO ACTUALLY DO KNOW THE NUMBER, BUT IT SHOCKED ME WHEN I ACTUALLY LOOKED AT IT.

ITES $1.5 MILLION.

PFM GOING FROM 600,000 DOLLARS TO $1.5 MILLION.

UNDERSTANDLY YOU WOULD EXPECT THAT EXPANDING THE PROGRAM WOULD INCREASE TAKE-UP, BUT KELL HAS HAD THE LARGEST PERCENTAGE INCREASE OF ANY STATE IN THE COUNTRY.

ONLY NEVADA IS I DID.

>> THAT DOESN'T MEAN THAT SOMETHING NEFARIOUS IS GOING ON.

>> OF COURSE IT DOES NOT AND KENTUCKY IS A POOR STATE.

MAYBE WE WERE HARDER HIT THAN OTHER STATES WITH RESPECT TO THE PANDEMIC, ET CETERA, BUT WHAT IT DOES STOUT ME IS THAT WE DON'T WANT TO DISMISS AS THE SYSTEMS IN PLAYERS INFALLIBLE.

AND SO I VIEW EACH HB 7 AS TRYING TO PROVIDE MORE INTEGRITY AND I THINK IF WE ERR ON THE SIDE BARBECUE IT IS TRULY IS AN IMPORTANT ISSUE OF ERRING ON WHETHER WE GO BEING TOO LAX IN DOCUMENTATION AND SO FORTH OR -- IN WHICH CASE PEOPLE MIGHT GET ON WHO DON'T DESERVE IT, VERSUS KIND OF THE OTHER END, WHICH WOULD BE BEING TOO HARSH IN MAKING THE BARRIERS TOO HARD.

>> CURIOUS ABOUT YOUR PERSPECTIVE ON THAT.

>> WELL, SO IN PUBLIC ASSISTANCE PROGRAMS, WE LIKE TO THINK OF IT AS HAVING A THREE-LEGGED STOOL.

SO YOU HAVE ADEQUACY, YOU HAVE AVAILABILITY, AND YOU HAVE ACCOUNTABLE OR INTEGRITY.

AND I THINK THAT HE'S RIGHT, WE DO NEED TO MAKE SURE WE'RE BALANCING THOSE ADEQUATELY.

I WOULD ARGUE THAT WE DO BY AND LARGE.

AGAIN, I THINK THAT THERE IS A REAL IMPORTANT ROLE THAT MEDICAID PLAYS, AND AGAIN, IT ENSURES THAT THAT MOST FOLKS CAN GET THE CHAIR THAT'S NEED WHEN THEY NEED IT HAD.

MEDICARE COVERS ABOUT HALF THE BIRTHS IN KENTUCKY, COVERS 70% OF NURSING HOME RESIDENTS.

IT COVERS A LARGE SHARE OF WORKING AGE ADULTS WHO ARE CURRENTLY WORKING.

THERE'S ABOUT 500,000 KIDS WHO USE IT.

AND SO WHEN WE ENSURE THAT THAT HEALTH CARE IS AVAILABLE TO FOLKS, WHAT WE'RE REALLY DOING IS INVESTING IN OUR FOLKS.

SO WHEN THERE WAS A LARGE SWELL IN EUGENIA IN MEDICAID, I REALLY SAW THAT AS A GOOD THING BECAUSE I THINK IT'S A GOOD THING.

ABOUT 300,000 FOLKS LOST WORK IN KENTUCKY, AND YOU SAW A PRETTY PROPORTIONATE INCREASE IN THE NUMBER OF FOLKS WHO CAME ONTO MEDICAID DURING THAT TIME.

NOW, I DO THINK MEDICAID'S NUMBERS ARE CURRENTLY HIGHER THAN THEY PROBABLY WILL END UP BEING BECAUSE THERE'S A MORATORIUM ON LETTING PEOPLE OFF OF MEDICAID DURING THE PUBLIC HEALTH EMERGENCY.

THE STATE IS DOING A LOT OF WORK RIGHT NOW TO GET THAT PROCESS READY OF FILTERING THROUGH WHO SHOULD BE ON THE PROGRAM AND WHO NEEDS TO GO FIND COVERAGE ELSEWHERE.

AND THAT I THINK IS GOING TO BE SORT OF A TRUCKIE BUMP AS WE MOVE FORWARD.

THERE'S A A TRICKY BUMP.

THERE'S A LOT OF POTENTIAL FOR FOLKS TO LOSE COVERAGE COMPLETELY WHICH IS SOMETHING WE DON'T WANT.

SO I THINK WHEN IT COMES TO THE THREE-LEGS STOOL, WE'VE BEEN FOCUSING A LOT ON SORT OF ADEQUACY AND AVAILABILITY DURING THE PANDEMIC.

ACCOUNTABILITY IS SOMETHING THAT WE'VE ALWAYS PAID ATTENTION TO AND SOMETHING THAT I THINK IS STATE IS WORKING REALLY HARD ON RIGHT NOW.

>> PROFESSOR FOSL, I DO WANT TO DRAW ATTENTION AGAIN TO WHAT HE WAS TALKING ABOUT THAT PRIOR TO THE MEDICAID EXPANSION IT'S $600,000 AND NOW IT'S $1.5 MILLION.

IS THAT NOT ALARMING IN SOME WAY TO YOU?

>> NOT ON THE FACE OFIT.

I MEAN, ON THE FACE OF IT, I THINK IT'S GREAT.

I THINK THAT KENTUCKY NEEDED, AND IT WAS A WONDERFUL THING THAT WE EXPANDED MEDICAL COVERAGE FOR CITIZENS.

I DO AGREE, HOWEVER, WITH MY COLLEAGUES THAT A RIGOROUS SYSTEM OF ACCOUNTABILITY ACCOUNTABILITY IS IMPORTANT.

IT'S IMPORTANT NOT JUST FOR PRINCIPLES OF FAIRNESS REALLY BUT ALSO EVEN APPLICABLE REASONS.

THE.

IF YOU WANT PEOPLE TO HAVE APPLICABLE BUY-IN TO THESE PROGRAMS, THEY HAVE TO BE ADMINISTERED PROPERLY, AND I THINK HEIGHTENED SCRUTINY OF RECIPIENTS CAN CONTRIBUTE TO THAT.

WE ALSO HAVE TO MAKE SURE, THOUGH, THAT THE CRITIC ARE CRITICIZING THIS IN GOOD FAITH BECAUSE IT'S A KIND OF TIME-WORN STRATEGY TO UNDERMINE PUBLIC ASSISTANCE PROGRAMS BY CLAIMING THAT THEY'RE RIDDLED WITH FRAUD, SO THERE'S ALSO -- YOU YOU HAVE TO TAKE THE CRITICS WITH A GRAIN OF SALT TOO.

I WOULD ALSO ADD AS A POLITIC, WHILE I SUPPORT HEIGHTENED SCRUTINY OF RECIPIENTS OF PROGRAMS THAT ARE DESIGNED TO HELP THOSE WITH LOWER INCOMES, WE HAVE TO MAKE SURE AS WELL THAT ALL THE PUBLIC ASSISTANCE PROGRAMS, AND THEY HAVE BEEN MASSIVE SINCE THE PANDEMIC FOR EMPLOYERS AND COMPANIES AND WEALTHY PEOPLE, HAVE BEEN ADMINISTERED CORRECTLY, TOO, BECAUSE IF WE WANT APPLICABLE BUY-IN THERE, WE HAVE TO MAKE SURE THAT THAT MONEY HASN'T BEEN SQUANDERED.

THE AMOUNT OF MONEY THAT WENT TO THE AIRLINES, FOR EXAMPLE WITH IS COMPARABLE TO THE AMOUNT THAT IS GONE TO UKRAINE, AND WE WANT TO MAKE SURE IT JUST WASN'T USED FOR STOCK BUYBACKS, HIGHER SALARIES FOR EXECUTIVES, CASH REVERSE, THINGS LIKE THAT, BUT BUT THAT IT REALLY WENT INTO MAINTAINING EMPLOYMENT AND PROGRAMS WITHIN THE COMPANIES FOR EMPLOYEES.

SO THERE'S TWO SIDES TO IT.

PEOPLE FOCUS A LOT ON FRAUD AMONG THE POOR, BUT WE HAVE TO MAKE SURE THAT THERE'S NOT FRAUD AMONG THE POWERFUL AND THE WEALTHY TOO.

>> IS THAT A CONCERN YOURS?

FAIR ENOUGH?

>> ALL PROGRAMS SHOULD HAVE INTEGRITY.

I AGREE WITH THAT 100%.

>> CHARLES?

>> ABSOLUTELY.

YEAH, THAT'S A KEY COMPONENT OF US HAVING GOOD CASEY ANTHONY IN OUR ENTIRE PUBLIC SYSTEM.

GOOD CASE.

TO MAKE SURE THOSE THINGS ARE HAPPENING.

WHEN IT COMES TO CORPORATIONS AND BUSINESSES, I THINK IF YOU TALK TO A LOT OF THEIR DEPARTMENTS THAT HANDLE AUDITING, THEY CAN TELL YOU THAT THEY DEAL WITH SOME PRETTY RIGOROUS RULES WHEN IT COMES TO RECEIVING ANY SORT OF BE WITH SAY, TAX INCENTIVE TYPE PROGRAM, BUT ABSOLUTELY WE NEED TO HAVE INTEGRITY WITHIN ALL THESE DIFFERENT TYPES PROGRAMS.

>> ♪ TWO MINUTES WE HAVE REMAINING 1 DO YOU HAVE ANY HOPEFUL SENTIMENT THAT YOU CAN PASS ALONG TO VIEWERS WHO ARE CONCERNED ABOUT THEIR WAGES BEING MAYBE GROWING BUT STILL NOT KEEPING PACE WITH INFLATION AND THE COST OF PUTTING GAS IN THE TANK AND PUTTING FOOD ON THE TABLE?

ANYMENT NIPPLE.

>> GAS PRICES HAVE BEEN FALLING FOR ABOUT 40 DAYS IN A ROW.

THEY'RE 70 CENTS OFF THEIR PEAK IN JUNE.

SO I THINK THAT'S IMPROVING.

I THINK THERE'S A LOT OF CONCERN RIGHT NOW WITH RUSSIA BECAUSE WE KNOW THAT GAGS IS A GLOBAL MARKET AND SO THERE'S A LOT OF CONCERN.

I THINK ABOUT WHAT'S GOING TO HAPPEN THIS WINTER AND WHAT MIGHT HAPPEN AS THE WAR IN UKRAINE PROGRESSION.

BUT SO FAR THINGS SEEM TO BE HEADING IN THE RIGHT DIRECTION.

YOU KNOW, I THINK THE OTHER REALLY AMAZING THING IS THAT THROUGH ALL OF THIS, DEMAND HASN'T REALLY FALLEN, WHICH IS REALLY GOOD.

THAT'S GOOD NEWS FOR PEOPLE ABLE TO STAY THE ON JOB.

JOB GROWTH HAS BEEN REALLY STRONG THROUGHOUT THE TIME.

IT MAY BE TAPERING A LITTLE BIT BUT IT'S STILL MOVING THE RIGHT DIRECTION.

AND WAGE GROWTH IS ALSO TEMPERING BUT IT'S STILL MOVING IN A POSITIVE DIRECTION.

SO THE HOPE IS THAT, AS GAS PRICES AND FOOD PRICES IMPROVE, THAT INFLATION WILL COME BACK DOWN, BUT, YOU KNOW, IT'S SORT OF ANYBODY'S GUESS RIGHT NOW, AND I THINK IT'S REALLY DIFFICULT FOR THE FEDERAL RESERVE TO RESPOND AND THE U.S. TO WHAT HAS BEEN A GLOBAL INFLATION CRISIS.

MY CONCERN RIGHT NOW SORT OF MOVING INTO NEXT YEAR IS WHAT HAPPENS IF WE DO HIT A RECESSION.

ONE PROGRAM THAT WE DIDN'T TALK MUCH ABOUT AT ALL TONIGHT IS UNEMPLOYMENT INSURANCE, AND I KNOW HOUSE BILL 4 REALLY MADE SOME RADICAL CHANGES, SOME REALLY DEEP CUTS TO UNEMPLOYMENT INSURANCE.

WE TYPICALLY HAVE 26 WEEKS.

RIGHT NOW WE'RE GOING TO HAVE AS LIMB AS 12 AND FOR SOME FOLKS IT COULD BE 6 WEEKS IF THEY DON'T FIND A JOB IN TIME.

THAT'S GOING TO LEAVE US UNPREPARED TO BE ABLE TO RESPOND TO A DOWNTURN.

IT'S GOING THREE HAVE US UNPREPARED TO DO THINGS LIKE STABLIZE THE HOUSING MARKET AND KEEP PEOPLE ON THE JOB.

>> REAL HAVE TO LEAVE IT THERE BUT I THINK THAT'S A TOPIC WORTH REVISITING SOME TIME VERY SOON.

THANK YOU, AND SORRY TO GIVE HIM THE LAST WORD ON THAT.

WE HAVE YOU'VE-TO-HAVE BACK TO HAVE ANOTHER REBUTTAL THANK YOU FOR JOINING US.

EL WE HOPE THAT YOU WILL TUNE IN FOR many-night NIGHT AT 6:30 EASTERN, 5:30 CENTRAL FOR "KENTUCKY EDITION."

TAKE GOOD COMPARE AND I WILL SEE YOU TOMORROW NIGHT.