House gives first nod to minimum wage hike
By Neal P. Goswami
VERMONT PRESS BUREAU | April 09,2014
MONTPELIER — The Vermont House gave preliminary approval Tuesday to legislation that would raise the state’s minimum wage to $10.10 an hour, after defeating a bid to gradually move toward that mark over a three-year period.
The outcome of the series of votes Tuesday goes against the expressed wishes of Gov. Peter Shumlin, who has called for the increase to be phased in over three years. He has been touting that plan since attending an event early last month in Connecticut with President Barack Obama and other New England governors.
The chamber voted 88-57 to approve the wage increase beginning Jan. 1, which would make Vermont the first state to crack the $10 mark.
Republican Rep. Kurt Wright of Burlington introduced an amendment to adopt Shumlin’s three-year plan and slow down the increase.
“It is basically what the governor has proposed,” Wright told the chamber. “It is basically speaking to the concern of small businesses across the state.”
He argued that better training for low-income workers, as opposed to boosting their pay, will help them secure better-paying jobs.
“We need to have low-wage earners with better job training so they go on to better jobs,” Wright said.
That notion was brushed aside by Democratic Rep. John Moran of Wardsboro. He said 60 percent of those making less than $10 an hour work in retail, tourism, health and social services and other service industries.
“Even if a few people did move up the economic ladder, we still have to fill positions in those industries. There is no way that people moving up will alleviate the lack of income for those people making under $10 an hour,” Moran said.
The House split up Wright’s amendment and voted separately to approve a study on the impact of the wage increase, but rejected the three-year approach on an 83-63 vote. The issue left the Democrats’ supermajority fractured, however, with a number of Democrats splitting from leadership.
Rep. Jean O’Sullivan, a Burlington Democrat, in reporting the underlying bill on the floor for the House General Affairs Committee, said about 20,000 Vermonters are earning less than $10 an hour. Many of them are working more than one job to make ends meet, she said, as 31,000 jobs pay below that mark.
Citing a report by Tom Kavet, an economist for the Legislature, O’Sullivan said the immediate jump to a $10.10 minimum wage would have “a negligible” impact on the state and result in a loss of fewer than 250 jobs or equivalent work hours.
Meanwhile, the amount earned by the state’s lowest-paid workers would be boosted by about $30 million, she said, stimulating the economy.
“It goes directly back into the Vermont economy,” O’Sullivan said. “This is a population that is still not at a living wage. They need to spend every single cent.”
Democratic Rep. Paul Ralston of Middlebury said he wants to raise the minimum wage, calling it “the moral thing to do.” But he said it should be done in a gradual manner. And he disputed the infusion of $30 million into the Vermont economy.
“Of course, that’s not true. We’re going to take $30 million from one part of the economy and put it into another part of the economy. Now, that may be the moral thing to do, but that isn’t new money,” said Ralston, who voted in favor of the underlying bill after Wright’s amendment failed.
Other House members, both Republicans and Democrats, also urged a more moderate approach to the increase. They argued the sudden jump would be an undue burden on small businesses.
“It perpetuates the image of Vermont as being against businesses, as being anti-business,” Wright said.
Rep. Chip Conquest, D-Wells River, urged his colleagues to consider how small businesses would be impacted.
“We’ve got to give businesses a chance to adjust to this,” he said. “The businesses in my area are doing OK, some of them are hanging on, but every one in my area is going to need some time to adjust to this.”
Others, including Waterbury Rep. Tom Stevens, a Democrat, argued passionately for boosting the minimum wage immediately. It will mean more groceries, gas and other necessities for the state’s poorest, he said.
“That’s what we’ll do with an extra $40 in our pocket,” he said. “It’s not a theory. Forty dollars in your pocket isn’t a theory — it’s food, it’s sustenance.”
Maryland’s Legislature gave final approval Monday to legislation that will eventually raise that state’s minimum wage to $10.10 by July 2018.
Connecticut already passed legislation to raise its wage to $10.10 on Jan. 1, 2017.
And both chambers in the Massachusetts Legislature have voted to raise the minimum wage — to $10.50 over the next two years in the House and to $11 over three years in the Senate.
Despite the Vermont House vote, the minimum wage bump may be forced to slow down when the legislation hits the Senate. Democratic Majority Leader Philip Baruth said a majority of senators favor slowing the increase.
The governor said Tuesday he is confident any differences in House and Senate versions will be reconciled “in the last few hours” of the legislative session.