Vermont Senate passes tiered minimum wage
MONTPELIER -- On Monday, the Senate approved a four-year, tiered phased-in increase of the minimum wage: $9.15 by Jan. 1, 2015; $9.60 in 2016; $10 in 2017 and $10.50 by 2018.
In Vermont the wage threshold is currently $8.73 per hour. The Shumlin administration proposed a phased-in minimum wage increase over a three-year period, eventually bringing the rate to $10.10. The House proposal raises the minimum wage by $10.10 Jan. 1, 2015.
All of the rates in the various proposals are indexed to inflation.
Attempts to amend the Senate version of the bill failed on Friday and Monday. A minority of senators opposed the idea of any increase.
Debate centered on the impact of the higher rates on small businesses in Vermont versus the notion that multinational corporations like Wal-Mart are paying so little that workers have to rely on taxpayer-funded programs such as foodstamps and Medicaid.
Sen. Jane Kitchel, D-Caledonia, said she has no sympathy for the multinationals, but she "lives in a place where shopping locally means going to New Hampshire." Small stores in her district struggle to turn any kind of profit and an increase in the minimum wage could make it even harder for them to stay afloat. Kitchel said she is concerned about "how to keep our little stores and villages vibrant. Our little stores have come and gone and are operating on a small margin."
Sen. David Zuckerman, P/D-Chittenden, is an organic vegetable farmer who employs up to 12 workers each season. He said the increase in the rates will eat into his small annual profits, but he said more Vermonters would be able to buy his produce "if they had more money in their pockets to buy it."
Others said the minimum wage hike would not provide an economic benefit for their communities. Sens. Joe Benning and Bobby Starr both said the higher rates would put pressure on small, marginal businesses in rural areas. Starr said one business owner he talked to said the new minimum wage would result in higher wages for all his workers and would cost a total of about $3 million a year.
Sen. Peg Flory, R-Rutland, proposed an amendment that would have allowed employers to pay 85 percent of the minimum wage for a 12-week period. The amendment failed. Several senators said the amendment defeated the purpose of raising the minimum wage in the first place.
A proposal from Sen. Michael Sirotkin to raise each of the tiered increases in the minimum wage by a dime also failed.
Sen. Kevin Mullin, R-Rutland, and chair of Senate Economic Development Committee, who forged the compromise legislation (there were a handful of proposals in his committee), said he supported the bill, but his committee is focused on creating high paying jobs.
"To be honest with you, it doesn't matter if it's $8 or $13, it's not enough to live on in a costly state like Vermont we need better jobs," Mullin said.
National studies show that in 1968, the minimum wage, adjusted for inflation, was worth $10.66 per hour.
Earlier this year, President Barack Obama made raising the minimum wage a priority for his administration.