Lawmakers push 2015 minimum wage boost
By Neal P. Goswami
VERMONT PRESS BUREAU | April 02,2014
MONTPELIER — A House panel voted Tuesday to raise the minimum wage to $10.10 per hour and is looking to do it next year rather than phase it in over three years as Gov. Peter Shumlin has requested.
Raising the minimum wage has gained steam in the Legislature since Shumlin and other New England governors attended an event last month with President Barack Obama calling for a $10.10 rate.
Shumlin, however, wants the increase from Vermont’s current $8.73 rate to come in three increments over three years.
The House General, Housing and Military Affairs Committee charted its own course Tuesday, voting to raise the wage beginning Jan. 1, 2015.
Annual cost-of-living increases will kick in beginning Jan. 1, 2016. Those increases will be the lower of 5 percent or the national consumer price index increase.
The panel’s two Republicans, Rep. Warren Van Wyck of Ferrisburgh and Rep. Brian Savage of Swanton, voted “no.”
The committee began the session considering a jump to $12.50 per hour, based on a bill introduced by lead sponsor Rep. Paul Poirier, I-Barre.
But Shumlin’s support for the $10.10 wage sought by the president took hold in the State House. The bill advanced by the committee Tuesday includes a study due in January 2016 on the impacts of raising the rate to a “livable wage.”
Several committee members cited a report by Tom Kavet, the Legislature’s economist, showing the jump to $10.10 “would probably have negligible, if any, negative aggregate economic consequences and could be an important component in advancing some of the lowest-income workers towards a livable income.”
The report, as Van Wyck noted to the committee, also found that raising the minimum wage could cost the state 250 jobs.
Connecticut has already moved to raise its minimum wage, and Massachusetts is in the legislative process to do the same. Van Wyck warned that unless New Hampshire, which has a $7.25 per hour rate, does the same, Vermont could see a negative impact.
“Unless there’s some sort of regional lifting of the minimum wage this could, perhaps, turn out to be a jobs bill for New Hampshire,” he said.
Both Van Wyck and Savage indicated they would have likely opposed the bill even if it had Shumlin’s three-year phased jump to $10.10.
“It’s too much of a jump, even in 2017,” Savage said.
Van Wyck said the wage increase will likely “increase teenage unemployment” and drive up the cost of goods and services that Vermonters buy.
“As wages go up, prices are going to go up also,” he said. “I think some of the effects of the higher wage are going to be offset by the fact that everything’s going to be a bit more also. Like any of these things, there’s going to be winners and losers.”
But most committee members saw more of an upside to boosting pay for the state’s low-income workers.
“We know that Vermonters can’t earn enough money in 40 hours to pay their rent,” she said. “People have to work like 89 hours per week just to live,” said Rep. Cynthia Weed, P/D-Enosburg Falls.
Advocates said they were happy to see an immediate jump to $10.10.
“Raising the minimum wage to $10.10 next year means a pay raise for 20,000 hard-working Vermonters,” said Dan Barlow, public policy manager for Vermont Businesses for Social Responsibility.
“We’re pretty sure that they are going to immediately invest that money back into the Vermont economy, buying Vermont goods and services, to the tune of about $30 million in economic activity,” he said. “So, we think this was a good first step.”
James Haslam, executive director of the Vermont Workers’ Center, also said the $10.10 rate is a step in the right direction. Still, consideration of an even higher wage as originally proposed in the House has been thwarted by pressure from the state’s business lobby, he said.
Shumlin spokeswoman Sue Allen, in an email, said the governor was reserving judgment as lawmakers continue to work on the bill.
“The Governor believes this is a good discussion to have, and he appreciates the House’s work on the issue. Gov. Shumlin believes his original proposal continues to have merit, but will let the Legislature do its work because almost everyone agrees that Vermonters working hard for minimum wage deserve a better chance at prosperity,” Allen wrote.