MIDDLESEX — Gov. Peter Shumlin signed a minimum wage bill into law Monday morning that will make Vermont’s standard one of the most generous in the nation when it takes full effect in 2018.
Shumlin addressed supporters and signed H.522, as legislators, supporters and business owners looked on at a ceremony outside the Red Hen Baking Co. in Middlesex.
The new law, which was passed by the House last session, will raise the minimum wage to $10.50 by 2018, and increase the wage for tipped employees to half of that. The increases will be phased in over four years; $9.15 on Jan. 1; $9.60 in 2016; $10 in 2017 and $10.50 by 2018. Vermont currently has the third-highest minimum wage in the country at $8.73 and the highest in New England. The federal minimum is $7.25 an hour.
Shumlin applauded lawmakers, highlighting their commitment to “working together in a bipartisan fashion to say to Vermonters, ‘you worked hard, we believe you should get a fair wage at the end of the day.’”
The Vermont Legislature considered six minimum wage formulas before settling on the version signed Monday.
According to a report generated for the Joint Fiscal Committee, about 20,000 Vermont workers will earn less than $10 an hour in 2015. The study also found that such an increase would have no substantial negative impact on small business owners or the state’s economy.
Officials say the legislation will disproportionately benefit women, who claim 55 percent of jobs that pay below $10 an hour. This legislation will help shrink the wage gap, Shumlin said. Workers in retail and service industries cover more than half of employees who will benefit from the law and 88 percent of minimum wage workers are over age 20.
“The minimum wage in Vermont is all about maximizing opportunity for working Vermonters,” said Chris Curtis, the director of Vermont Legal Aid and co-leader of the Pathways from Poverty Council. “I see every day in my practice at Vermont Legal Aid the tradeoffs that families are having to make. Low-income families are having to choose between housing, utilities, medication, fuel, all of those tradeoffs. This legislation is going to make a difference in the lives of ordinary Vermonters and help them to get ahead.”
Shumlin blamed the “do-nothing” Congress in Washington for its failure to increase the federal minimum wage.
“I don’t think that there’s an American who believes that in the greatest economy in the world and in the greatest democracy in the world that it’s fair to work for 7 dollars and 25 cents an hour,” he said. “… work hard, and come home at the end of the week having to live in poverty.”
Red Hen Baking Co. co-owner Randy George said the company has always paid its employees well above the state’s minimum.
“Anyone who has to buy groceries and keep a roof over their heads for themselves or a family know that these are foolish numbers,” George said. “For myself as a business owner, if I want to attract skilled people and keep them, we have to exceed that.”
Curtis said the work isn’t finished.
“There’s more we need to do and it has everything to do with addressing the benefits cliff issue and building more supports and more financial supports,” he said. “The goal is financial stability for low-income Vermonters.”
Curtis was referring to the potential for certain lost state benefits for workers whose minimum wage raise bumps them off eligibility.
Does the bill spell success?
He paused. “In terms of addressing poverty in Vermont, it’s a start. It’s a strong start.”
