Eric Davis: Lawmakers fail on minimum wage

The story of this year’s legislative session was written last Friday afternoon in Montpelier. Unable to come up with a veto-proof majority that could pass minimum wage and family leave bills through both the House and the Senate and then override Gov. Scott’s expected vetoes, House leadership decided to end the session and adjourn until January. With the House gone home, senators who wanted to keep negotiating had nowhere to turn for a partner.
The House leadership’s decision may not be well received by some progressive activists, the core of the Vermont Democratic party’s base. They would have preferred passing some legislation, even if there were not the votes to override gubernatorial vetoes. For progressives, making the 2020 gubernatorial campaign into a referendum on Scott’s refusal to endorse a $15 minimum wage and a mandatory paid family leave program could have been a good political move.
After last Friday’s events, can the House leadership redeem itself with the progressives next year? Will some Vermont progressives decide to devote their attention, time and donations for the 2020 election cycle to presidential and congressional candidates in other states, rather than the Vermont Democratic Party?
Meanwhile, the Vermonters left behind by the Legislature’s messy adjournment are those working at the minimum wage. The minimum wage in Vermont is now $10.78 per hour. With no minimum wage bill passed this year, those workers will receive only a cost-of-living increase for 2020. For the 12 months ending in April, the Consumer Price Index increased by 2 percent. If that trend continues, it would translate to a Vermont minimum wage of $11.00 per hour starting in January.
Research compiled by the Legislature’s Joint Fiscal Office (JFO) indicates that the purchasing power of the minimum wage in Vermont has declined over the past 50 years. In 1968, the Vermont minimum wage was $1.60 an hour. In today’s dollars, that would be the equivalent of $11.36 per hour, 5 percent more than today’s minimum wage.
Over the last half-century, Vermont’s minimum wage has increased by 0.8 percent per year, adjusted for inflation. In the same period, including multiple highs and lows in the business cycle, the American economy as a whole grew by 1.5 percent per year, and the per capita income of all Vermonters grew by 2.1 percent per year. Because the minimum wage has grown more slowly than the overall economy, Vermonters earning the minimum wage have fallen farther behind their fellow workers each year.
Between 25,000 and 30,000 Vermonters are currently working in jobs that pay the minimum wage. These jobs include those at small retail establishments, gasoline stations and convenience stores, fast-food restaurants and other food service establishments where employees do not receive tips, and parts of the health care and social services sector, in particular long-term care.
Minimum-wage workers are not primarily young and single. Over 40 percent of those Vermonters earning the minimum wage are the head of a family, either a couple or a single-parent family. Most minimum-wage workers in Vermont are middle-aged or older, with only 31 percent of them younger than 30. Close to two-thirds of the minimum-wage and low-wage workers in Vermont (those earning $15 per hour or less) are the primary earners in their households.
A person working full-time at the Vermont minimum wage would earn $22,422 annually. JFO research from 2017 determined that the “basic needs budget” (housing, food, clothing, transportation, child care and health insurance) for a single-parent family with one child was about $50,000 in most of Vermont, but closer to $60,000 in Chittenden County. While programs such as Vermont Health Connect subsidies, Dr. Dynasaur, and 3SquaresVT can make up some of the difference between minimum wage earnings and a basic needs budget, there is still a large gap to be filled for the lowest-income working Vermonters.
Eric L. Davis is professor emeritus of political science at Middlebury College.

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