Senate picks up minimum wage bill

A proposal to increase Vermont’s minimum wage to $10.10 per hour on Jan. 1 passed the House on a voice vote Wednesday and will now move to the Senate.

House Speaker Shap Smith, D-Morrisville, praised the legislation in a joint news release with Rep. Helen Head, D-South Burlington, Wednesday afternoon. Head chairs the House Committee on General Services, Housing and Military Affairs — the de facto labor committee in that chamber.

Shayne Spence, outreach and development coordinator for the Ethan Allen Institute, testified against raising the minimum wage. Photo by Hilary Niles/VTDigger

Shayne Spence, outreach and development coordinator for the Ethan Allen Institute, testified against raising the minimum wage. Photo by Hilary Niles/VTDigger

“A Vermonter working full time and making the minimum wage cannot afford health care, housing or food without government subsidies,” Smith said. “The Vermont House of Representatives’ vote today moves the state closer to a livable wage and means that Vermonters will be more likely to be able to meet their most basic needs.”

It’s estimated the $1.37 an hour raise would add about $30 million to paychecks for roughly 20,000 Vermonters currently working for less than $10.00 per hour.

“This bill is an effective step in helping Vermont’s low-income workers support their families and will enable people to put that money back into the state economy by spending at local businesses,” Head said.

As it stands, H.552 would quicken the pace of Gov. Peter Shumlin’s spring initiative to raise the state’s minimum wage to $10.10 over the course of three years. On the other end of the spectrum, some lawmakers have proposed raising it to $12.50 or more.

A state survey of basic needs in Vermont pegs the “livable” wage at roughly $12.48 per hour.

Vermont’s current minimum wage of $8.73 is the highest in New England, with Connecticut close behind at $8.70. Massachusetts and Rhode Island are both at $8, while Maine is $7.50. New Hampshire currently goes by the federal minimum wage of $7.25.

The increase passed with little fanfare in the House, but only after hours of prior debate about the impact a nearly 16 percent increase would have on the state’s economy — particularly low-income workers receiving public assistance and businesses competing across state lines.

The concern for low-income workers is whether the raise would be enough to make up for benefits they would lose as a result of earning more money. The increased labor costs concerns businesses, particularly if companies in neighboring states don’t have to pay the same rate.

Just before the House vote, Rep. Carolyn Branagan, R-Georgia, floated the idea of raising bank franchise taxes to fund an increase in the state Earned Income Tax Credit low-wage workers are eligible to receive. Branagan said the franchise tax had not been raised since 1997.

She withdrew her amendment as soon as she explained it, though. She said after the vote that she knew it wouldn’t have a chance, but she wanted to introduce a different approach to solving problems for low-wage workers.

Sen. Kevin Mullin, R-Rutland. File photo by Hilary Niles/VTDigger.org

Sen. Kevin Mullin, R-Rutland. File photo by Hilary Niles/VTDigger.org

Sen. Kevin Mullin, R-Rutland, chair of the Senate Committee on Economic Development, Housing and General Affairs, said his committee would be asking many of the same questions that had been debated in the House.

“Some of the questions that I’ve flagged (are), what happens with the Earned Income Tax Credit, what happens with state benefits programs, things like that,” Mullin said. “We’re concerned that we don’t want to kick somebody off a cliff so that they’re actually going to end up in a worse position.”

Mullin’s committee started discussing H.552 this week, and will take testimony about the House-passed bill from business groups starting at 9 a.m. Thursday morning.

Hilary Niles

Comments

  1. Walter Cooper :

    “New Hampshire currently goes by the federal minimum wage of $7.25.”

    How many viable service businesses sit within 15 miles of the CT River. Not many.

    Vermont is not an island. I am all for living wages but we must be mindful of further increasing the “gradients” between us and our neighboring states. In West Lebanon on the weekends, it’s mostly green license plates.

  2. Walter Carpenter :

    “Vermont is not an island. I am all for living wages but we must be mindful of further increasing the “gradients” between us and our neighboring states.”

    So workers here must stay in poverty because of “gradients” between us and NH?

    • J. Scott Cameron :

      Workers will not escape poverty due to any act of the government.

      • Thomas F. Clougher :

        How can businesses purport to talk for their employees? That is akin to a “company union” and is illegal. If a worker says, “I need more to live on,” a employer cannot say, “I know better.”
        If a worker does not have management status, he cannot be asked to run the company.

  3. Stephen Pilcher :

    If we are worried about declining population in the State as a whole and student enrollment, than instead of decrying “gradients” between us and neighboring states with regards to wages we should be celebrating them. By paying workers in Vermont a higher wage we are encouraging more families to more to Vermont. This would create a virtuous cycle of increasing enrollment, declining per pupil spending and less taxes making Vermont more attractive. Besides it is the right thing to do.

    • J. Scott Cameron :

      Yeah, right. I’m going to move to Vermont so that I can make $10.10 and hour rather than $9.00 somewhere else? Big whoop.

      However, I will move to Vermont to get that free single payer health care you’re going to put into play soon. Thanks a bunch!

      • Thomas F. Clougher :

        Three years to get to $10.10? The real goal is closer to $15.00 an hour. $10.10 is already a compromise and should not be further compromised. $15.00 vs. $9.00 might be a bigger attraction to move. For workers, certainly. For lawyers, it’s still chump change.

  4. John McClaughry :

    Forgive me for reciting this from my commentary published here on March 18: “Minimum wage advocates continually assume a moral tone – forcing employers to pay more is “the right thing to do”. The inescapable flaw in that argument is that the workers earning the new $13.20 minimum wage will not be the same workers who are now earning $8.73. Sure, an economically insupportable $4 an hour wage increase will make the survivors richer and happier – but at the same time many of their onetime fellow workers won’t have those jobs any more – and are almost certainly likely to increase, not decrease, dependence on government programs.
    Who are these workers priced out of the labor market? They are the least skilled, least productive, least experienced, least English- speaking, and least white. That’s the point tirelessly made by two economic professors who grew up black and poor, Thomas Sowell (Stanford) and Walter Williams (George Mason).
    Sowell has called the minimum wage “economic insanity and social callousness masquerading as compassion.” Williams has documented how the Federal minimum wage was designed by Big Labor in the 1930s to tilt the scales against black workers competing for “white jobs”.

  5. Thomas F. Clougher :

    Perhaps labor from Mexico won’t be so attractive if they are paid a decent wage. Slave labor was always more attractive, but it destroyed jobs for many groups. Will the poor lose “benefits”? Why should public benefits subsidize free market companies. Walmart competes unfairly with Albertson’s and Kroger in paying slave wages to their wage slaves vs. negotiated union pay levels.

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