[T]he Senate on Tuesday approved a new plan to increase the minimum wage to $12.50 an hour by 2021.
The proposal comes after senators rejected a minimum wage bill passed by the House last week, which would have increased the minimum wage to $15 an hour by 2026 at the earliest. Senators argued the House measure didn’t raise the pay for low income workers fast enough.
The new minimum wage plan, tacked onto H.351, a workers’ compensation bill, passed 22-8.
The current minimum wage is $10.78 per hour.
The Senate’s original minimum wage proposal would have increased the wage to $15 an hour by 2024.
But the measure failed to earn the support of Republicans and many moderate Democrats in the House, who had concerns that the fast-paced wage increase could harm small businesses and put stress on the economy if the state sees a recession.
The chair of the Senate Economic Development Committee, Sen. Michael Sirotkin, called the latest minimum wage proposal a “compromise” with House lawmakers.
“It’s not as expansive as the bill we passed before, but it does get money in people’s hands,” said Sirotkin, D-Chittenden.
The House passed a slower phase-in of the $15 wage that would have been tied to the rate of inflation, or the consumer price index.
Under the legislation, the minimum wage would be set each year by multiplying the CPI by a factor of 2.25. At the earliest, the House bill would have raised the wage to $15 an hour by 2026, but under the plan, it’s likely Vermont wouldn’t have seen a $15 minimum wage until years later.
House Speaker Mitzi Johnson, D-South Hero, said Tuesday that she “obviously” preferred the House’s minimum bill over the new Senate plan.
She said that House members want to raise the minimum wage “in a way that small rural businesses can afford” and that doesn’t jeopardize agencies that rely on Medicaid funding.
“Making larger increases for a shorter period of time doesn’t address those two problems,” Johnson said.
Fiscal analysts found last month that for some Medicaid-funded health care workers to see pay hikes in line with the Senate’s first minimum wage proposal, the state would need to spend tens of millions of dollars in the coming years.
Progressive advocates who criticized the House’s minimum wage bill over its slower phase-in say they approve of the new Senate proposal.
Raising the minimum wage to $12.50 an hour could still put the state on track to see a $15 minimum wage by 2024, if lawmakers readjusted wage laws once again in the coming years.
“It keeps the motivation to come back and keep working on it in 2020, which is not going to happen with the House proposal,” said Brenda Siegel, a Democratic candidate for governor in 2018 who has been pushing for a $15 minimum wage in the Statehouse this year.
It’s unclear whether the governor will support the $12.50 minimum wage. Last year, he vetoed the Senate’s proposal to hike the wage to $15 by 2024, and while he has suggested he could be open to more modest wage increase this year, he has not told lawmakers what sort of proposal he could support.
While the Senate passed its new minimum wage bill on Tuesday, the upper chamber continued to hold up a proposal that would establish a paid family leave program in Vermont.
Last week, Sen. Majority Leader Becca Balint, D-Windham, said that members of Senate Democratic Caucus would not support moving the paid leave bill unless they were confident that Vermonters were also getting a pay raise.
Johnson said that her sense is that the Senate wants to see that the House is “still getting somewhere they can live with on minimum wage” before they pass the paid family leave bill.
“I think right now the conversation is about minimum wage and trying to find a place that we can all find an agreement on” she said.
But she added that she feels confident the two chambers will also be able to reach agreement on paid family leave in the coming days.
“I feel like we can get to a place pretty quickly on paid family leave,” she said.
