MONTPELIER — On Thursday, Feb. 15, the Vermont Senate passed a bill during a procedural vote to increase the hourly minimum wage from its current level of 10.50 to 15 dollars by 2024. The proposed bill would increase the wage gradually over the next six years with the first increase scheduled to take place on Jan. 1, 2019.
After passing the bill with a two-thirds majority on Feb. 15 (20 in favor and 10 opposed), lawmakers gave final approval to the bill in a voice-vote on Friday, Feb. 16.
Senate President Pro Tempore, Tim Ashe (D/P-Chittenden), has been an enthusiastic ally of the bill and of Sen. Michael Sirotkin, who first introduced it. “Income inequality is the most pressing public policy issue in our time,” said Ashe, who believes that increasing the minimum wage is currently the best strategy to address the issue. According to Addison Independent, Vermonters are more likely to work minimum wage jobs than in most other New England states.
However, some of those in opposition to it believe that the bill would harm small businesses in Vermont, which would have to adjust to paying higher wages. Senators who opposed the bill raised concerns that adjusting to these higher baseline wages would force small businesses to cut back on their number of employees, reduce their hours or struggle with a lower margin of profit. Some expressed a desire to see wage increases for Vermonters come from skill-set development rather than an increase in the state-enforced minimum.
Other senators were concerned that raising household incomes could cause some families to lose eligibility for aid, or ‘push them off the benefits cliff.’ Yet Ashe explained that the minimum wage study committee, established by Vermont’s Joint Fiscal Office, had carefully considered the issues of the benefits cliff and the impact of the wage increase on businesses. “Those who are in support [of the bill] aren’t unmindful to those small businesses owners who could face challenges,” he said.
Ashe illustrated the benefits of increasing the minimum wage, saying that Vermonters who earn, for example, around 20,000 dollars a year, are more likely to spend that extra dollar and put it back into supporting small businesses than, say a millionaire would be. “Members of the public have generally shown support for raising the minimum wage and understand the social justice issues behind [doing so],” said Ashe. “Although it’s not a guarantee that every dollar we increase minimum wage will go back into supporting small businesses, we believe that broader reduction costs will be enjoyed by all small businesses.”
What is more, Ashe explained, is that minimum wage is scheduled to go up under current law anyway; the bill is simply increasing the suggested level for 2024. He explained that he also supports it because it would help reduce how much taxpayers “have to pick up the tab” and allow businesses to take care of their employees while still remaining competitive. Workers’ compensation and unemployment costs are scheduled to go down around the same time that these wages go up, so that should help in terms of the support that small businesses would see.
Though Ashe says the bill would not reverse demographic trends of workforce decline, he believes it could offer an incentive for workforce participation and support for those who rely on minimum wage paying jobs. “I think, frankly, that people understand that the economy has been good to people at the top and not so good to the bottom and want to change that,” he said.
Lawmakers considered and defeated several proposed amendments to the senate bill. They voted against the inclusion of an amendment, submitted by Sen. Joe Benning, R-Caledonia, that would limit the minimum wage hike to Vermont’s most densely populated region, Chittenden County. Another, proposed by Sen. Peg Flory, R-Rutland, which would let businesses pay less than minimum wage given they provided certain benefits, was also defeated, according to Addison County Independent.
Though the bill passed definitively in the Senate, defeating several amendments, it may face several challenges and cutbacks in the house and when it eventually reaches Governor Phil Scott’s desk.
“While Gov. Scott agrees with the goal to increase wages, and has supported economically responsible increases to the minimum wage in the past,” Rebecca Kelley, spokesperson to the governor, told Addison County Independent, “the approach currently proposed comes with a lot of risk to our economy, businesses and increased costs to consumers.”
“I think that philosophically the governor is opposed to raising the minimum wage at all, but if this bill gets to his desk he will have to choose between a philosophical decision and what is best for Vermont,” said Ashe. “My hope is that the house will take action and that the governor will support the proposed bill as well.”