Vermont’s minimum wage is rising by 18 cents at the end of the year, after lawmakers this past legislative session failed to pass a bill that would have set Vermont on a course for a more aggressive increase.
Vermont’s Department of Labor announced Monday that the state’s minimum wage, which is currently set at $10.78, will rise 18 cents to $10.96. The increase will go into effect Jan. 1, 2020.
Facing a veto threat from Gov. Phil Scott, lawmakers struggled earlier this year to agree on a bill that would reach a $15 minimum wage in the next few years, and set sharper increases in the interim.
A Senate backed proposal would have raised the minimum wage to $11.75 next year, on the way to $15 by 2024. A more moderate proposal from the House Appropriations Committee would have raised the wage to $11.20 next year, with an indefinite path to $15.
Ultimately, Democrats who control both chambers failed to strike a deal and didn’t get a bill to Scott, who opposed the Senate version and declined to weigh in on the House compromise.
As it stands, Vermont’s minimum wage rises annually with inflation, determined by the Consumer Price Index, which increased 1.7% in 2019. (The House version would have remained tied to CPI, increasing the minimum wage by 2.25 x inflation).
Sen. Becca Balint, D-Windham, the Senate majority leader, said the status quo meant families relying on minimum wage earners simply can’t afford to live in Vermont.
She said members of the House and Senate have been using the off-season to discuss how to best work together to move legislation forward.
“We’re going to start the session with a new energy and resolve so that we can collectively, as two chambers, offer this package to Vermont workers,” Balint said.
There was broad agreement among Democrats and Progressives in the Statehouse that the current metric for setting the minimum wage is insufficient. The main point of contention was how quickly to accelerate the annual wage increase, and whether to build in brakes if the economy heads south.
The Legislature’s Joint Fiscal Office found that the livable wage in Vermont in 2018 was $13.34 per hour. Liveable wage is defined as “the hourly wage required for a full-time worker to pay for one-half of the basic needs budget for a two-person household, with no children, and employer-sponsored health insurance.”
If the current calculation for setting the minimum wage remains in place, Vermont would not hit $15 until sometime after 2040.
Rep. James Harrison, R-Chittenden, is aligned with the governor in his belief that market forces should drive annual wage increases, and his fear that an accelerated increase to $15 could hurt small businesses and cause them to hire fewer workers.
Harrison said gradual increases to Vermont’s minimum wage through inflation rates are more in tune with economic realities.
“We all want higher wages,” Harrison said, “we just disagree about how to get there.”
Even if a bill to raise Vermont’s minimum wage to $15 is passed this coming session, it will have to be approved by Scott — unless House leaders can summon the votes for a veto override.
Rebecca Kelley, Scott’s communications director, has previously told VTDigger the governor could support a minimum wage increase if it also included mechanisms to prevent adverse economic impacts of a wage hike.
Balint said she’s confident Scott can be swayed.
“Part of his focus has been on the affordability of Vermont and that he’s concerned that it’s not affordable,” she said. “Well there’s a very straightforward approach to putting more money in people’s pockets, and that is increasing the minimum wage.”
