Editor’s note: This commentary is by Rachel Kauppila, who is the job developer at Vermont Works for Women and a leader with Vermont Interfaith Action.
[V]ermont Works for Women helps women and girls recognize their potential as well as explore, pursue and excel in work that leads to economic independence and security for themselves and their families. Economic independence means earning a wage that is high enough to support one’s family without state assistance. The current minimum wage, $10.50/hour, is not high enough for women and girls to reach economic independence.
I work specifically in the Step In to Work program and I help find jobs for women with employment barriers, most of whom live in poverty. In Vermont, the poverty rate for families headed by single women is 37.5 percent – nine times the poverty rate of married couples, and indeed most of our participants are single mothers, dependent on state assistance – housing assistance, 3SquaresVT, Reach Up cash assistance, Child Care Financial Assistance Program and Medicaid.
These programs are administered by different agencies who don’t always coordinate with each other. When someone gets a job, they must report their income individually to each of these separate agencies and all benefits go down due to an increase in income. This is the benefits cliff. The reality is that when some women go from not working to working, their net income ends up going down because the benefits they lose surpass the wages they earn when making a minimum wage of $10.50/hour. For some women, it does not make financial sense to work – they will literally be better off financially if they do not work.
One of my participants, Sarah, recently returned to work after having her second child. While she was on maternity leave her partner got a raise, and now with her added part-time income her family is headed straight off the benefits cliff. They no longer receive housing assistance and their food stamps will go down to zero as of Jan. 1. Thankfully, they won’t lose their child care subsidy until it’s up for renewal later next year, however when that happens Sarah expects that they will no longer qualify for any subsidy at all and she will have to quit her job to take care of her children because they will no longer be able to afford child care. Or she will have to find a full-time job that makes well above minimum wage, because a full-time job with minimum wage wouldn’t be enough for her family to make ends meet.
In fact, in Vermont, 43 percent of women who work full time do not make enough to cover basic living expenses due to the low wages they are earning. However, if the job pays closer to a living wage, $15 an hour rather than $10 an hour, working begins to make financial sense. Often with a $15/hour wage, the amount they would make would offset the benefits they would lose. A $15 minimum wage would allow the women I work with to successfully get off state assistance, and maybe even start saving so they aren’t living paycheck to paycheck anymore. It might even allow them to create an emergency fund, so when the car breaks down, or they must put up a security deposit for a new apartment, they don’t become destitute.
Vermont Works for Women supports a $15 minimum wage – moving toward a livable wage – so that women can successfully get off state assistance and become economically independent, financially secure, contributing members to our communities.
