Minimum Wage Increase Moves To Vermont Senate

Apr 10, 2014

Vermont Statehouse
Credit WAMC/Pat Bradley

The Vermont House on Wednesday gave final approval to an increase in the state’s minimum wage to $10.10 per hour from the current $8.73, to take effect in January. But Governor Peter Shumlin prefers moving to $10.10 in stages by 2017.

House bill 552 passed on Wednesday and now moves to the state Senate for consideration.
Vermont currently pays the third highest minimum wage in the country, but legislators want to aggressively increase the wage closer to a so-called livable wage.
Thursday morning a coalition of faith, labor and community groups met at the Statehouse to urge the Senate to approve the $10.10 minimum wage with an implementation in January. Vermont Workers’ Center Executive Director James Haslam says the coalition wants the momentum to continue into the Senate’s deliberations.  “There’s a lot of support for it in the Senate. There’s also some opposition. Some people thinking that we should wait two or three years before we get to $10.10. But we went into this legislative session with a bill in the Senate that would have moved the minimum wage to $12.00 an hour in 2015. So we’re optimistic that the Senate will move forward with at least what the House has done.”

Haslam notes that the legislative debate has highlighted not just the minimum wage, but livable wage issues.  “People are struggling in today’s economy to make their basic needs. About a third of our jobs in this state pay poverty wages, pay less than it costs to actually live, less than a livable wage. And this increase in 2015 is a meaningful step in actually getting to a place where we can have livable wages for everyone.”

The Vermont NEA is among the groups supporting the effort to fast track a minimum wage increase. Spokesman Darren Allen says they are a union that believes in justice for workers. “One of the great, great eyesores of the American experience is the pathetic level of our minimum wage. It is one of the lowest in the industrialized world. It is not enough for somebody working full-time to earn a living to support a family. Or even to support one person. There is no reason to wait until 2017. And $10.10 barely gets it close to what it was back when it was first instituted. The minimum wage has not kept pace with inflation. And it certainly hasn’t kept pace with the compensation for the CEO’s who are railing against it.”

Vermont Governor Peter Shumlin declined to say on Wednesday whether he would sign a bill calling for $10.10 in January of 2015. The governor has said he prefers incremental increases to $10.10 per hour by 2017.  Lake Champlain Regional Chamber of Commerce Vice President for Public Affairs Cathy Davis says business members are concerned about the immediacy of the increase passed by the House.  “A lot of businesses operate on very slim margins. Retailers can sometimes operate on a one to two percent margin. An increase to $10.10 could for some businesses represent their profit. And so it doesn’t give them the time to plan for increasing sales or making changes. We don’t want to see businesses having to cut staff or lay-off people.  Which is why we’re supporting the phased-in increase because it gives businesses time to adjust and insures that these extra dollars are getting into the employees’ pockets.”

Economist and Vermont Economy Newsletter Editor Art Woolf says less than 5 percent of workers across the country earn the minimum wage, and he believes the individual impacts must be assessed rather than viewing the minimum wage as a broad brush to solve a problem.  “For those people who get an increase because the Legislature has passed a new law, obviously it’s going to be good for them. And then we have to look at what about the people who lose their jobs or have their hours reduced, because that’s what the employer has to do in order to pay for those workers who are getting the new higher minimum wage. And what about those workers, or potential workers, who would have been hired? So we have to really look at it from an individual level.”

Vermont’s current minimum wage is $8.73. If the Senate passes and the governor approves the January $10.10 increase, Vermont would be the first state with a minimum wage higher than $10.