Gov. Peter Shumlin earlier this year jump-started a push to raise the minimum wage. But House lawmakers say his plan doesn’t move fast enough. And the governor and the Legislature could be headed for a showdown on one of the highest profile labor bills of the 2014 session.
Shumlin and members of the Vermont House both want to increase the minimum wage to $10.10 per hour. They part ways, however, when it comes to the timing.
Under the plan put forward by the Democratic governor, the minimum wouldn’t hit $10.10 until 2017. But House lawmakers are poised to pass legislation that would install the higher wage at the beginning of next year.
Shumlin says that’s too soon. “I believe that our proposal gets us where we need to go in a careful enough way so it doesn’t displace jobs as we go there,” Shumlin says.
Some business interests in the state echo Shumlin’s concerns about the House bill’s impact on jobs. Jim Harrison is the director of the Vermont Grocers Association, a trade group that represents about 600 merchants. “To go to $10.10 in one fell swoop in just nine months from now is pretty dramatic and pretty severe and will have repercussions, not only in terms of employment, in terms of hours, but in terms of prices that people pay at stores,” Harrison says.
House Speaker Shap Smith says he thinks the Vermont economy can withstand the pressure of higher wages. Smith says that for many members of his caucus, moving to $10.10 is already a difficult concession. Members of the House had previously introduced at least three minimum wage bills this year, and the least aggressive among them sought to increase wages to $12 per hour.
“It’s always a balancing act, and it seems to me that if you look at other areas that have increased the minimum wage, the effect on employment hasn’t been as severe as some had predicted,” Smith says.
According to an economic analysis commissioned by the Legislature earlier this year, about 22,000 Vermont workers earn less than $10 an hour. Raising the minimum wage to $10 would generate about $30 million in aggregate income gains for those workers, and result in about 250 fewer jobs, according to the analysis.
And it isn’t just teenagers and part-time workers making the low wages. The analysis found that more than half of people making below $10 an hour are their families’ primary breadwinners, and a majority are older than 30.
Shumlin says he’s fully committed to signing into law a minimum wage bill this year. And he says he’ll work to convince legislators to see the wisdom of his approach.
“And that’s the best way, the most responsible way, to raise wages for folks who are working hard but aren’t making enough money,” Shumlin says.
The House bill passed the committee on housing, general and military affairs on Tuesday, and looks to have a clear path to a successful vote on the floor.
