Insurance price spikes threaten supportive housing programs

Summary

Marketplace Episode Summary: Insurance Price Spikes Threaten Supportive Housing Programs

Release Date: November 28, 2024
Host: Kai Ryssdal
Podcast: Marketplace

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1. Buy Now Pay Later (BNPL) Surge During Holiday Season

As the holiday shopping season kicks off, Buy Now Pay Later (BNPL) options have seen a significant surge. According to data from Adobe, an unprecedented $18.5 billion in purchases are expected to utilize BNPL this year, marking an 11% increase from the previous year.

Key Points:

• BNPL Overview: BNPL allows consumers to split purchases into interest-free installments, typically paid bi-weekly.
• Digital Momentum: Vivek Pandya, Lead Insights Analyst at Adobe, highlights BNPL's integration into digital shopping platforms, stating, "Buy Now Pay later options have become more common wherever people have a digital shopping cart" (02:08).
• Usage Trends: Initially used for large purchases like televisions and mattresses, BNPL is now also being employed for essential items such as groceries (02:32).
• Consumer Behavior: Approximately 75% of BNPL transactions occur on mobile devices, facilitating impulsive buying decisions. Trevor Forbes of TSG notes, "Mobile shopping really facilitates a lot of impulse buying" (02:52).

Potential Risks:

• Financial Strain: Lisa Gill from Consumer Reports warns, "That non-payment can wind up on your credit report, and non-payments start to really ding that credit score pretty hard" (03:22).
• Overextension: Multiple BNPL loans across different providers can lead to what Gill describes as a "financial kerfuffle" (03:48).

2. Wage Growth vs. Inflation: The Household Financial Struggle

Despite the easing of inflation rates, wage growth has not uniformly kept pace, leaving many households in a precarious financial position.

Key Points:

• Inflation Trends: Inflation rates have cooled, with price increases down to 2.3% annually, while wages saw an average hourly increase of 4% year-over-year in October (04:04).
• Lagging Wages: Julia Pollock from ZipRecruiter emphasizes that "most workers are lagging behind where they would have been if pre-pandemic trends had continued" (05:26).
• Income Disparity: Frank Fiorelli of payroll processor Paychecks notes that small business employees often receive smaller pay bumps compared to the national average (05:36).
• Credit Challenges: Bankrate reports that 50% of credit card holders carry debt month-to-month with an average interest rate of over 20%, and some face rates in the mid-30s (06:13).

Implications:

• Consumer Behavior: High costs of living are pushing consumers, especially low and middle-income earners, to rely more on credit cards and BNPL, exacerbating debt levels.
• Future Outlook: Despite current challenges, there is optimism as almost one in four employers on ZipRecruiter plan significant wage increases of 5% or more heading into 2025 (07:00).

3. Navigating Salary Negotiations: Nikki Massey's Story

In a deeply personal segment, Marketplace host Marie Magres shares the story of Nikki Massey, a senior manager who confronted the realities of wage transparency and negotiation.

Key Points:

• Discovery of Underpayment: During a remote HR presentation, Nikki discovered her salary was at the bottom of her position's range, prompting feelings of betrayal and undervaluation (08:24).
• Negotiation Journey: Despite initial fears, Nikki negotiated her salary, ultimately securing a 40% increase without a formal promotion (12:17).
• Personal Impact: This salary bump allowed Nikki to improve her family's quality of life, including taking her daughters on their first vacation in years and addressing significant home repairs (12:51).
• Lessons Learned: Nikki emphasizes the importance of recognizing one's worth and advocating for fair compensation, sharing, "There's not as big of a risk in taking a chance and just asking for what you want" (13:18).

Broader Context:

• Gender Pay Gap: The episode highlights systemic issues, noting that Black women, on average, earn 66 cents for every dollar earned by white men, as per the latest census data (11:07).

4. Insurance Premium Spikes Threaten Supportive Housing Programs

The episode's focal point addresses the escalating insurance premiums that jeopardize the sustainability of permanent supportive housing (PSH) programs.

Key Points:

• Impact of Claims: Supportive housing providers, such as Episcopal Community Services, are experiencing soaring insurance costs due to frequent claims from minor accidents like stove fires and water damage (20:47).
• Premium Increases: Over the past year, premiums for these organizations have surged by 34%, while others in the sector have seen their premiums more than double (21:05).
• Industry Challenges: Karen Collins from the American Property Casualty Insurance Association attributes these hikes to a combination of increased claims related to PSH and broader industry issues like natural disasters and rising rebuilding costs (21:02).

Consequences:

• Operational Strain: Elevated insurance costs are forcing organizations to deplete operating reserves, threatening the very existence of supportive housing models (21:28).
• Limited Flexibility: Unlike traditional landlords, supportive housing providers cannot pass increased costs onto tenants due to rent caps and subsidies, leaving them financially vulnerable (21:57).

Potential Solutions:

• Public Backstops: Proposals include implementing public insurance backstops akin to federal flood insurance to mitigate risk (22:00).
• Proactive Measures: Organizations are redesigning buildings with preventive features and conducting monthly inspections to reduce incidents and associated claims (22:32).

Conclusion: Beth Stokes of Episcopal Community Services underscores the urgency, stating, "Insurance costs are now an existential threat" to the sustainability of supportive housing programs (21:28).

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Additional Highlights

• Small Business Insights: Amber and Mallory Pollock of Backwards Distilling in Casper, Wyoming, discuss the challenges of rising costs and potential new pricing structures due to looming tariffs on packaging materials (23:33).

• Global Policy Update: Australia has enacted legislation to ban social media for children under 16, aiming to protect their mental health. However, the enforcement mechanisms remain unclear, with platforms given a year to comply or face hefty fines (27:21).

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Takeaways

This episode of Marketplace delves into the intricate balance between consumer behavior, wage dynamics, and the operational challenges faced by supportive housing programs. The rise of BNPL reflects changing consumer credit habits amidst financial strain, while wage growth remains a critical factor in household economic stability. Nikki Massey's personal narrative underscores the broader issues of wage transparency and negotiation, particularly for marginalized workers. Most prominently, the insurance premium surge threatens the viability of essential supportive housing services, highlighting the need for systemic solutions to sustain these vital programs.

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For more detailed stories and economic insights, listen to the full episode of Marketplace wherever you get your podcasts.

Transcript

[Justin Vineyards]

This Marketplace podcast is supported by Justin Vineyards and Winery. Since 1981, Justin has been producing world class Bordeaux style wines from Paso Robles on California's Central coast. As the pioneer of Paso, Justin wines are what put Paso Robles on the winemaking map. With a rich history of accolades, Justin produces exceptional wines and is proud to be America's number one luxury Cabernet. Whether you're a first time wine drinker or a wine aficionado, Justin has a wine for every celebration and occasion. Looking for special wine to serve at your holiday table? Visit justinwine.com.

[Marie Magres]

You know, today may be Thanksgiving, but tomorrow you could say kicks off a different kind of feast. One where the deals come quick and some of the payments come later. From American Public Media, this is Marketplace Foreign. I'm Marie Magres in for Kai Rysdal. It is Thursday, 28th November. Happy Thanksgiving. Good to have you along. Now it's safe to say many consumers, maybe yourself included, will wake up from their Thanksgiving food comas with a simple mission in mind. Snag as many deals as possible with Black Friday tomorrow we officially start the holiday shopping season and according to data From Adobe, about $18.5 billion of our purchases this year. Let me say that again, 18.5 billion are expected to be made using Buy Now Pay Later. That's a new record, up more than 11% from last year. Typically buy now pay later or BNPL. It lets shoppers split their purchases into installments so you pay about every two weeks and depending on the plan, it's typically interest free. Here's Marketplace's Stephanie Hughes with a closer look.

[Stephanie Hughes]

An earlier version of Buy Now Pay later layaway. You know, Pay now slowly Receive later.

[Marie Magres]

In a way, the concept of Buy Now Pay later has been around for decades, but it's now having a digital moment.

[Stephanie Hughes]

Vivek Pandya is lead Insights analyst for Adobe. Pandya says Buy Now Pay later options have become more common. Wherever people have a digital shopping cart, Buy Now Pay later is there. Also, with inflation, the items in those carts have gotten more expensive.

[Marie Magres]

You have some consumers who've been in a more strained financial position and they need to lean on BNPL to get what they need.

[Stephanie Hughes]

Pandia says consumers often use Buy Now Pay later for the big stuff. Think a television or a mattress. But in the past couple of years, he's seen people using it to buy the necessary stuff. Think groceries. Also, about 3/4 of buy Now Pay later spending takes place on a mobile device, which means it's easy to hit buy.

[Trevor Forbes]

Mobile shopping really facilitates a lot of impulse buying.

[Stephanie Hughes]

Also, at a time of still high.

[Marie Magres]

Interest rates, I think the 0% interest spread across two months is pretty attractive, right?

[Stephanie Hughes]

Trevor Forbes is with TSG, a payments analytics firm.

[Lisa Gill]

Being able to split it up as.

[Mitchell Hartman]

You get your check, you can make.

[Justin Vineyards]

That deposit towards that purchase without having.

[Marie Magres]

To do it all at once.

[Stephanie Hughes]

There can be problems that come with using Buy Now Pay later, like say you don't have enough money to pay later. Lisa Gill is with Consumer Reports.

[Julia Pollack]

That non payment can wind up on your credit report, and non payments start to really ding that credit score pretty hard.

[Stephanie Hughes]

On the flip side, Gill says some consumers use Buy Now Pay later, make that first payment and then never receive what they thought they bought, while others have trouble returning it.

[Julia Pollack]

So they were still paying on merchandise.

[Nikki Massey]

That they had never received or that they were extremely unhappy with. And that is where it gets into like, ugh.

[Stephanie Hughes]

Gill says it's also possible to take out a bunch of Buy now pay later loans at the same time with different companies. And she says the more loans people have, the more likely they are to get overextended and wind up in what she calls a financial kerfuffle. I'm Stephanie Hughes for Marketplace.

[Marie Magres]

Wall street was closed for the holiday, so we'll take a different spin. Details, numbers coming up. You know, inflation is likely one of the reasons more shoppers than ever are expected to use Buy Now Pay later this season. Or I should say not really inflation, but rather its lasting impact because inflation is cooling and the rate of price increases is gradually coming down. Wages, though, are a bit of a happier story. In October, average hourly earnings were up 4% year over year. Prices, meanwhile, rose by an annual rate of 2.3%. So what's this all mean for people's household finances heading into the holidays? Marketplace's Mitchell Hartman has that one.

[Trevor Forbes]

Back in 2022, inflation peaked at 9% and wage gains fell way behind, eroding the purchasing power of most workers, says Julia Pollack at ZipRecruiter.

[Amber Pollock]

But since then, pay has been catching up and wages have now been rising.

[Trevor Forbes]

Faster than inflation for about a year and a half.

[Marie Magres]

Still, Pollack says most workers are lagging.

[Amber Pollock]

Behind where they would have been if pre pandemic trends had continued because prices.

[Trevor Forbes]

Are still so much higher than they were before the pandemic. Meanwhile, if you work for a small business, you've likely been getting smaller pay bumps than the average American worker. Frank Fiorelli tracks wage inflation for payroll processor paychecks.

[Marie Magres]

It's definitely come down from last year where we were seeing some pretty robust growth. You know, it moved under the 3% rate a couple months ago and then.

[Mallory Pollock]

It popped back up.

[Marie Magres]

So a little bit of a uptick.

[Trevor Forbes]

All in all, says Ted Rossman at Bankrate, when it comes to workers purchasing.

[Lisa Gill]

Power, even though the job market's been good, they're not feeling great about things.

[Trevor Forbes]

That's especially true of low and middle income wage earners, says Rossman. Many of them are overwhelmed by high prices for everyday living expenses, using credit cards to make ends meet, then falling behind. Bankrate reports half of credit card holders carry debt over from month to month at an average interest rate just over 20%.

[Marie Magres]

But some people are paying 2530 store credit cards.

[Lisa Gill]

A lot of those are in the mid-30s. I mean, it's crazy.

[Marie Magres]

These are rates we used to think.

[Lisa Gill]

Of for deep subprime borrowers, but now it's become increasingly common.

[Trevor Forbes]

There is some light on the paycheck horizon, though. Julia Pollock at ZipRecruiter says heading into 2025, a majority of employers posting jobs on the site are boosting wages.

[Amber Pollock]

Almost one in four employers say they're planning significant increases of 5% or more. So it looks as though wage growth is back on track.

[Trevor Forbes]

The incoming Trump administration is a bit of a wild card, though. Mass deportations could lead to labor shortages driving wages higher. Those higher wages, plus steep new tariffs on imports, could push prices higher as well. I'm Mitchell Hartman for Marketplace.

[Marie Magres]

So let's go from macro thinking big picture about wages to the very micro. I host a Marketplace podcast called this Is Uncomfortable, and I recently talked with a woman named Nikki Massey. When Nikki got offered a job many years ago, she didn't really question the salary, which isn't unusual. 40% of employed adults who did not ask for more pay said they were satisfied with what they were offered. That's according to Pew. But what if you found out later that maybe you could have been making more money all along? Nikki described that moment to me.

[Mallory Pollock]

I was in my home office and the human resources department decided to do a presentation.

[Marie Magres]

Nikki, who's in her late 40s, was working as a senior manager for a nonprofit in D.C. during this remote presentation, she remembers HR sharing a chart of her company's salary ranges. And that's when she saw her salary, $75,000 corresponding to the very bottom of her position's range.

[Mallory Pollock]

It was a punch in the gut moment. I was just like, am I not doing a great job? Is this like a vote in their confidence in me? Like, what does this Even mean that, you know, I make the absolute rock bottom that I can make for this position.

[Marie Magres]

And what was the highest amount?

[Mallory Pollock]

I believe the highest amount was like, maybe 110 or 112 or something like that.

[Marie Magres]

It didn't make sense to Nikki. She'd worked at this company for 12 years and had been in that position for the last three, and management often praised her work. She wasn't sure who to turn to for advice. Her mom, who'd passed away, was the only person in her life who had a professional job.

[Mallory Pollock]

I have people to talk it through about how I felt about it. I didn't have people to talk it through and say, okay, well, here's maybe.

[Marie Magres]

What you should do next, like, strategically. Yeah, okay, so then the meeting ends, and then what do you do?

[Mallory Pollock]

I don't like causing a stink about things, but it was just like, I might have to cause a stink about this.

[Marie Magres]

Nikki's always felt fortunate to make a decent salary, but she's a single mom who helped put her two daughters through college. She hadn't taken a proper vacation in years. There was a giant hole in her kitchen ceiling, and she owed the government more than $65,000 in student debt. She set up a meeting with her boss, made the case for why she deserves a higher salary, and then she waited. Meanwhile, as time passed, she could feel her frustration hardening.

[Mallory Pollock]

I know this sounds cheesy, but I just didn't think that that sort of thing would ever happen to me or that I would deal with that. And up to that point, I'd had sort of an idyllic view of the organization. I was like, we are family. We're family. And I was like, you know, that was like, sort of my very real cue of like, you know, your job is not your family. Your job is not your friends. And I think that that felt like a little bit of a betrayal to me.

[Marie Magres]

And when you say that you thought you would never have to deal with that, what do you mean by that?

[Mallory Pollock]

I think that I thought that I was in a privileged position for a woman of color because, you know, here I am. I have this. You know, I have this college degree. I have a nice salary job. And I thought that, you know, I'd risen above all of that. Now I'm going to be successful, and it's just like, you know, just not that scenario.

[Marie Magres]

We can't confirm what other factors might have been at play for Nikki, but. But we know black women, on average, experience one of the largest pay gaps when compared to their male counterparts. Last year, according to the census, black women working full time earned 66 cents for every dollar made by white men. Not long after talking with her boss, Nikki got a promotion. But with no salary increase, she did manage to negotiate a bump. And then about a year later, she got another promotion.

[Mallory Pollock]

It wasn't. I didn't think, oh, you guys like me. You really like me. It was more like, this is probably what I should have been making the whole time.

[Marie Magres]

Even in the middle of all these promotions, she still felt like there was a lack of transparency, no recognition that she might have been underpaid.

[Mallory Pollock]

The trust that I had in the organization was kind of gone. I don't trust that I'm going to advance here the way that I would want to or need to. I think I want to start looking for another job.

[Marie Magres]

Nikki applied for a position at another nonprofit to be the director of fundraising and marketing. She landed an interview, and at the end of it, they asked her, what's your salary expectation?

[Mallory Pollock]

I did have to practice that because it was like every time I said it, I would stutter. So I said it very confidently. I said, my salary expectation is 1:18. And do you know what she said to me?

[Marie Magres]

What did she say?

[Mallory Pollock]

She said, great, we're gonna pay you 127.

[Marie Magres]

No.

[Mallory Pollock]

And I was just like, oh, my gosh.

[Marie Magres]

What? And then you're like, no, no, just kidding. 150.

[Mallory Pollock]

Well, part of me was wondering, like, why? If you knew that, why. Why? Why did you ask me that question?

[Marie Magres]

Trying to name her salary felt like a question on a test she didn't know how to study for. Nikki's been working at this new job for the last two years, making more money than she could have ever imagined. She took her daughters on their first true vacation in years and plans to fix that hole in her kitchen ceiling. As your children are getting started in their careers, what do you hope to tell them about how to think of their own value in the workplace?

[Mallory Pollock]

There's sort of this propensity that I have, and I feel like other people have this propensity to just, in general, lowball yourself or feel like you have to be the absolute expert at something before you can demand your worth from someone. Something there's not as big of a risk in taking a chance and just asking for what you want, as I seem to have perceived there being my whole life.

[Marie Magres]

Sometimes Nikki wonders if she could be making even more money today if she'd started negotiating earlier in life. Who knows? But she's set on helping her daughters, passing down the kind of wisdom she wishes someone would have shared with her. If you want to hear more stories about life and how money messes with it, be sure to check out the Marketplace podcast that I host. It's called this is Uncomfortable. You can listen wherever you get your podcasts.

[Nikki Massey]

Coming up, I think I would like to see less gray hair on my head.

[Marie Magres]

Wouldn't we all? But first, let's do the numbers. US Markets were closed today for the Thanksgiving holiday. Tomorrow, Black Friday, the markets will have a shortened trading day. The great getaway started early, of course, with millions driving and flying flying to get to their destination. Just short of 80 million of us will drive 50 miles or more. According to AAA, they'll pay an average of $3.07 for a gallon of regular. Last year it was three and a quarter gallon. In New York, where I'm currently hosting, the average is $3.16. Yesterday, TSA Screened More Than 2,700,000 Travelers TSA is expecting to screen more than 18 million travelers for the period between Tuesday and next Monday. That's an increase of 6% from last year. In Europe, Britain's FTSE was flat and Germany's DAX increased nearly a percent. You're listening to Marketplace.

[Justin Vineyards]

This Marketplace podcast is supported by Remarkable what if Paper Were Given Digital Powers? Introducing Remarkable Paper Pro the Ultimate Paper Tablet Remarkable Paper Pro is a premium digital notebook with the feel of paper for note taking, organizing and reviewing documents. Keep all your notes and documents on a slim and stylish device that's thinner than your smartphone. One place for all your important work. Get the digital tools you need like cloud sync, undo, copy paste and handwriting conversion without the distractions found on other devices. Remarkable Paper Pro features a distraction free design and an intuitive interface built from the ground up around focus and thinking. Go for weeks on a single charge thanks to an upgraded battery made using recycled cobalt and keep working when the lights go out. With the new front light, it's the ultimate paper tablet. Get yours [e-mail] youm turn to Marketplace.

[Lisa Gill]

For up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day. So please contribute what you can [e-mail] donate.

[Julia Pollack]

There are over 1.5 million nonprofit organizations in the US and millions more around the world. How do you know which ones can make the biggest impact with your donation? GiveWell was founded to help donors with that exact question. They pour over independent studies and charity data to help donors direct their funds to evidence backed organizations that are saving and improving lives. GiveWell wants as many donors as possible to make informed decisions about high impact giving. You can find all their research and recommendations on their site for free. You can make tax deductible donations to their recommended funds and charities and GiveWell doesn't take a cut. If you've never used GiveWell to donate, you can have your donation match up to $100 before the end of the year or as long as matching funds last. To claim your match, go to givewell.org and pick podcast and enter Marketplace at the checkout. Make sure they know that you heard about GiveWell from Marketplace to get your donation matched again. That's givewell.org to donate or find out more.

[Marie Magres]

This is Marketplace. I'm Rima Reis to tackle homelessness, political leaders across the country have touted a seemingly simple build homes for people who don't have them. Better yet, put those homes in places where unhoused folks are already living in cities close to public transportation and services. But here's the thing. More and more insurers are seeing those properties as too risky. Not because of potentially catastrophic storms or wildfires, but because of who lives there and the urban neighborhoods where they're located. KQED's Aaron Baldessari has that story.

[Mitchell Hartman]

Two years ago, Solomon Bukenya's hands were so swollen he could hardly move his fingers. So one day, when he was alone and needed to press a small button on the side of his prosthetic leg to remove it, he says he had no choice but to call 911.

[Amber Pollock]

They came and told him, I can't press this button. Please can you pre sit for me? And that's all I wanted to do. Imagine calling 911 for only that small thing.

[Mitchell Hartman]

Bukenya, now 65 years old, had been homeless since about 2007, living in cars and on the street. His health was deteriorating. I was so weak, my hands, my.

[Amber Pollock]

Joints, I couldn't walk.

[Mitchell Hartman]

But early last year, he got permanent housing in downtown San Francisco, where he gets health care and free meals.

[Amber Pollock]

I'm feeling more stronger. I'm like 20, 25 year old, the way I feel in my body.

[Mitchell Hartman]

Research shows this kind of housing, known in the field as permanent supportive housing, leads not only to positive changes for residents, but to taxpayer savings too. Travis Hamilton is with Episcopal Community Services, which owns and operates Bucenya's building. It's so much more affordable in comparison to incarceration or long term housing, hospitalization or literally the cost of one emergency room visit. The success of this model is a big reason it's grown across the country. The number of these supportive apartments have more than doubled over the past decade to over 660,000 units in 2023. But with the new buildings comes new insurance claims, evidence of which was on display at the apartment complex where Brukenia lives. So unfortunately there was some water damage and we do have our elevators out. Currently, Hamilton says it can take time for people who've lived outside for a decade or more to re acclimate to apartment life. Folks take medication or are sleepy, not feeling well.

[Marie Magres]

Leave the stove burner on, which can cause fires.

[Mitchell Hartman]

It might only be a small stove fire, but water from sprinklers wreaks havoc. And each accident is even minor ones can cause tens of thousands of dollars in damages. Beth Stokes is the executive director of Episcopal Community Services.

[Marie Magres]

We've had six fires over the past two years alone.

[Mitchell Hartman]

We have had over seven floods as a result. Stokes says insurance premiums for her organization increased 34% over the past year, a mercy compared to other housing providers who've seen premiums more than double, forcing them to dip into operating reserves. Stokes says it's gotten so bad that insurance costs are now an existential threat.

[Marie Magres]

Because a lot of us are deeply concerned at what we're carrying on our books. We're all very concerned about the sustainability of the model.

[Mitchell Hartman]

Karen Collins with the American Property Casualty Insurance association says the rise in claims for this kind of housing is piling up on top of other challenges in the industry right now. Hurricanes and wildfires, higher rebuilding costs.

[Amber Pollock]

All of these combined have resulted in.

[Marie Magres]

Very significant losses in the last few years.

[Stephanie Hughes]

And so we are seeing premiums having.

[Mitchell Hartman]

To increase across the entire US Unlike other landlords who might pass costs onto tenants, supportive housing providers can't. Rents are capped and subsidized by taxpayers. State insurance commissions are only just beginning to study this problem. Solutions could include a public backstop similar to federal flood insurance, or just more funding. At Episcopal Community Services, Hamilton says they're already doing what they can by designing buildings with features to prevent damage.

[Marie Magres]

We learned this from a painful lesson.

[Mitchell Hartman]

At another permit supportive housing site that timers and stoves are really important. There are extra drains in the bathroom so water doesn't seep to floors Below and monthly house inspections. If it looks like a resident needs help, Hamilton says there's support. Hey, what happened? How can we help you prevent these in the future? Because preventing that next fire or flood might mean keeping the doors open In San Francisco, I'm Erin Baldessari for Marketplace.

[Marie Magres]

It's that time of the year when friends and family gather to eat, play games, reminisce about the good old days and yeah, maybe talk about what's on their minds. What if though, this is something you do pretty much every day because you run a business with your family? We decided to check back in with Amber and Mallory Pollock, co owners of Backwards Distilling company in Casper, Wyoming at one of their busiest times of the year.

[Amber Pollock]

It's been a good year for us overall. Most of the data coming out from sales data recently is indicating that there's some pulling back happening in the alcohol industry, particularly on the off premise side of things with people buying, you know, off of liquor store shelves. However, our tasting room sales and everything that we do here on site has been going really well. Cost have been a challenge. We've really tried to hold our prices to try to remain as competitive as we can. But you know, we've got a proposition of tariffs on the horizon again which last time that happened that affected glass, cardboard, aluminum, sort of a lot of the things that, that we do package in. And I don't think we have a lot of room to further absorb those increases. And so it's likely that we will have to consider a new pricing structure in the near future. I don't know if Mallory has anything to add.

[Nikki Massey]

I think I would like to see less gray hair on my head. But something tells me that being part of a small family business will not allow for that.

[Amber Pollock]

Yeah, I don't think it's reversible. We are 10 years in business.

[Nikki Massey]

This week, this Friday we're doing like a retro menu. We're throwing it back to some drinks that were on our menu years ago and I just have these like, ah, this memory of like, oh my gosh, that drink was so hard to make and it was so, it was so cumbersome. I kind of joke, you know, with staff like, oh yeah, that frozen drink that took you three seconds to make. We used to make those by hand, one by one by one with like an individual little blender and now it's just, you know, a big production of it. So I think that one is wild for me to see just on a micro level.

[Amber Pollock]

Yeah, I think too when we opened we had One product. It was one bottle. We made vodka. So every drink on the menu was vodka. And that was the only thing we were selling. But I counted it up the other day for a presentation I was giving. And we have put more than 30 products to the market now to go from just a single product that we were making to have launched all of these different entries into the market. It's really wild. I was going through my phone today and through my social media trying to reach out to folks who have supported us over the years to let them know that we're celebrating 10 years and to thank them for whatever it was that they contributed to our success. So it was really a very interesting kind of retrospective look at it. And many of them were or are still regulars, right?

[Marie Magres]

Yes.

[Nikki Massey]

We have seen relationships come and go. We've seen first dates turn into engagements. We've had engagements here. You know, we joke like when couples split, who's gonna get backwards in the divorce? And I think it's very, very special to me to be able to witness that and see just how far we've come over the past 10 years.

[Marie Magres]

That's Amber and Mallory Pollock, co owners of Backwards Distilling company over in Casper, Wyoming. This final note on the way out. Australia just became the first country to ban social media for children, specifically those under 16. Lawmakers say the legislation is to help protect their mental health. You might be wondering, okay, but how exactly will it be enforced? The legislation does not make that clear. But platforms like TikTok, Instagram, Snapchat and the likes, they'll have a year to meet the requirements. Otherwise, the law says they'll be liable for fines of up to $33 million. John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Peacher and Stephanie Sieg are the Marketplace editing staff. Amir Babawi is the managing editor and I'm Rima Grajs. We'll be back tomorrow. This is apm.

[Lisa Gill]

You turn to Marketplace for up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day. So please contribute what you can [e-mail] donate.