Even Some Progressive Businesses Wary Of $15 Minimum Wage

Oct 4, 2017

A group of lawmakers has begun laying the political ground work for an increase in Vermont’s minimum wage. But legislators are struggling to find support in the business community for a plan that would take it all the way to $15 an hour.

Getting to a $15 minimum wage has become a rallying cry for the Democratic Party base in Vermont. A number of state lawmakers are gearing up for the legislative push needed to make it happen.

On Monday, they invited some business owners to the Statehouse to gauge their interest in the plan. Stanley Borofsky, who employs 93 people at his department stores in Brattleboro, New Hampshire and Massachusetts, did not mince words.

“It’s very, very difficult to run a business when government is giving you all kinds of laws that are creating situations,” Borofsky said. “We’ve got freight coming in, we’ve got health insurance coming in, we’ve got Master [Card] charges coming in. We’ve got all kinds of issues, all kinds of issues. We’re having a tough enough time staying in business.”

Vermont’s minimum wage will hit $10.50 next year, seventh highest in the nation. Borofsky says upping it to $15 an hour by 2021, as one legislative proposal calls for, could sink retailers like him.

"We've got all kinds of issues, all kinds of issues. We're having a tough enough time staying in business." — Stanley Borofsky, business owner

Borofsky delivered his remarks to the Legislature’s Minimum Wage Study Committee on behalf of the Vermont Retail and Grocers Association. Opposition from that particular trade association isn’t terribly surprising. Neither is the pushback from groups like the Vermont Chamber of Commerce, and the National Federation of Independent Businesses.

But the proposal is also meeting with skepticism from groups that have traditionally played a key role in advancing socially progressive labor practices.

Randy George, co-owner of Red Hen Baking Company in Middlesex, told lawmakers that he’d “love nothing more than to pay people $15 to $20 an hour.”

“And I actually do in many cases,” George said.

George sits on the leadership committee at Main Street Alliance. The group led the push for paid sick days a few years ago, and is now urging lawmakers to adopt a mandatory paid family and medical leave policy for all employers in Vermont.

To be clear, George and the Main Street Alliance say they support some kind of an increase in the minimum wage.

But George says pushing it to $15 an hour could strain his company’s financial ledger, especially since many of his workers arrive with little to no baking experience.

"There was a lot of nervousness in the business community over an increase of that size even over a couple of years." — Daniel Barlow, Vermont Businesses for Social Responsibility

“We’re essentially doing workforce training, and that’s costly,” George said.

It isn’t the only socially progressive trade association that’s expressing concerns. Daniel Barlow, public policy manager at Vermont Businesses for Social Responsibility, says his organization supports a minimum wage increase.

“But there was a lot of nervousness in the business community over an increase of that size even over a couple of years,” Barlow said.

Barlow echoed a sentiment voiced by Main Street Alliance: focusing solely on hourly wage discounts the other costly elements of an employee’s compensation package. Barlow says his member businesses pay, on average, $15,000 a year per employee toward health benefits.

“And that translates to a $7.25 cent per hour wage,” Barlow said. “That has to be a dynamic in this conversation, is the impact of the employer sponsored health insurance industry on suppressing wages in Vermont.”

And that means lawmakers seeking support for $15 an hour next year may have to look long and hard for businesses to back them up.

That doesn’t mean they won’t be under pressure to make it happen though. Ann Zimmerman was also at the committee meeting this week.

“I would like to speak as a person who has had to survive as a single parent in the Brattleboro area, in Windham County, raising kids and paying rent as an hourly paid employee,” Zimmerman said.

Zimmerman said raising those kids, and paying that rent, is an almost impossible task on existing minimum wage levels.

“There were definitely times when we were really, really close to not keeping our little ship afloat, and I don’t really know how to convey the stress of that if you’ve never done it,” Zimmerman said.

Raise the Wage, a coalition of advocacy groups, will be pushing lawmakers hard to alleviate that stress by increasing the minimum wage the to $15 an hour. The Minimum Wage Study Committee is considering a number of plans that would raise the wage from anywhere to $12.50 an hour to $15 on hour, over various time periods.

Isaac Grimm, political engagement director at Rights and Democracy, one of the groups leading the Raise the Wage campaign, told lawmakers it’s their “duty” to advance minimum wage legislation next year.

This post was edited at 10:10 a.m. on 10/5/17 to correct the misspelling of Stanley Borofsky's name.