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Editorial: Bottom line on minimum wage

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Posted on April 19, 2018 |
By Angelo Lynn



Bill H.302 — currently within the jurisdiction of the House Committee on General, Housing & Military Affairs — calls for raising the state’s minimum wage from the current $10.50 per hour to $15 per hour by 2026. A similar bill, S.40, passed the Senate back in mid-February. Even if supporters pass the House bill, and compromise legislation is reached with the Senate in time to send a bill to Gov. Scott’s desk, the governor has misgivings about the initiative and has said in the past that he would veto the legislation.

It’s a topic of concern raised locally at this week’s Legislative Breakfast and poses this fundamental question that each of us should contemplate: Will an increase in the minimum wage hurt more than it helps?

Some business advocates suggest an increase in the minimum wage to $15 per hour would be detrimental to Vermont’s business community. Proponents counter that gradually raising the minimum wage from $10.50 per hour today to $15 per hour by the year 2024 is still not enough to live on and escape the harmful effects of living a life of poverty.

Here are four important considerations:

• Vermont’s younger demographic is leaving the state in part because better higher-paying jobs are being offered elsewhere. If Vermont is to compete for that labor market — and we desperately need to be competitive — we need to up our ante. Higher wages in the long run will help retain Vermont’s native sons and daughters.

• Businesses, if they’re honest, will tell you they can’t find good help in the current marketplace for less than the prevailing minimum wage or much higher, and $15 by 2024 will seem low, just as $10.50 per hour seems low today. The bigger problem is that by hiking the minimum wage, it hikes up the wages of the tiers above that as well, putting an additional burden on businesses. Exceptions to business sizes (business under a certain number of employees), exempting summer jobs or seasonal work could possibly be a way to mitigate the hardships, while not impacting the wages of residents working full time, year around at firms that can afford the increase.

• The benefits of a higher minimum wage is that nearly 100 percent would be spent locally on necessary expenses, which boosts the economy. What’s shocking today is that the minimum wage, which decades ago represented a starting wage for teenagers and those just entering the workforce, applies to far too many Vermonters. The average age of those earning the minimum wage in Vermont is now 38, while almost half — 45 percent — are 40 or older. And more than one in five of those adults are parents. And that’s today at $10.50 per hour — about $22,000 for a 40-hour per week job, which is fall short of a poverty wage.

• The consequences of families living in poverty can be many: drug addiction, poor health, welfare and homelessness and on and on; all the results of living a life of despair and without hope. Helping families work their way out of poverty benefits the state’s fiscal wellbeing.

The goal to strive toward is creating an economy where an adult working full time can meet their basic needs on that income — that’s a living wage. By 2024, it’s doubtful that even $15 an hour would meet that threshold, but it’s a step in the right direction and it lays the foundation for an economy that will attract jobs to the state, and people eager to take them. 

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