Reps pan wage bill
MONTPELIER- Deerfield Valley representatives Laura Sibilia and John Gannon called the debate and passage of a $15 minimum wage bill on Tuesday a “stunt.”
Senate bill S.90 passed by a narrow margin, with 77 representatives voting in favor, and 69 voting against. The bill, which would raise the minimum wage from its current $10.50 to $15 by 2024, will be sent back to the Senate for approval of changes made in the House, but it appears destined for the governor’s desk. Gov. Phil Scott, however, has promised to veto the measure.
Under the plan, Vermont’s minimum wage would increase by 60 to 90 cents in annual increments until it reaches $15 in 2024. The current minimum wage, which is pegged to the consumer price index, is projected to rise to $12.16 by 2024.
Proponents of the bill say a $15 minimum wage would raise more than 65,000 Vermont workers out of poverty, who, by exercising their new spending power, would stimulate the economy. Sibilia, who has worked on economic development issues for more than a decade, says the theory may be valid as a generality. “The argument can be made that raising the minimum wage raises the GDP, but only if you’re bringing in money from away. What we have in the Deerfield Valley is a lot of mom-and-pop businesses. We know there are times when a lot of business owners are not drawing their own paycheck to keep their businesses open.”
Gannon says raising the minimum wage may reduce poverty and stimulate economic activity without significant side effects in areas with a more healthy and diverse economy. But he says he’s concerned about the impact on rural areas. “We see the number of empty buildings in Wilmington,” he says. “Burlington has recovered from the recession, the rest of the state has not. We’re still seeing a financial struggle in rural areas, and increasing the minimum wage will make things worse.”
The current legislative session is winding down, perhaps to adjourn this week. Both Gannon and Sibilia referred to the last-minute push for passage of the bill as a political stunt. “It’s silly season here,” Sibilia said. “The governor has been clear that he will veto the bill. And there are not going to be enough votes to override his veto.”
Sibilia says the bill advanced as part of “an agreement between the House and Senate that I’m not privy to.” She says the deal removed a roadblock for another bill that was up for discussion this week, the paid family leave bill. But the backing behind the bill, she says, is part of a national effort to attack poverty and income inequality.
“This is a national policy push that’s passing in small places,” Sibilia said. “I understand there’s wealth disparity, but Vermont is a small economy, and this ($15 minimum wage bill) is not solving our problem in the valley. It’s not solving the problem in Windham County, where I work. And it’s not solving the problem in rural Vermont.”
Gannon also acknowledges that there’s both a shortage of workers, and depressed wages in the valley. He says the valley’s economy is still recovering from Tropical Storm Irene, and the recession. But he says there are more effective ways to target poverty, without focusing the burden on employers. “I do think we need to increase wages, but there are other tools to do that,” he said. H.911 would increase the percentage that Vermont contributes to the earned income tax benefit, which is a better tool to take people out of poverty because it’s directly tied to overall income and how many children you have. It targets the increased credit to those who are struggling the most.”
Gannon cites as examples a high school student from a wealthy family working a minimum wage job, and a parent working a minimum wage job. “Minimum wage doesn’t discriminate; the earned income credit targets people living in poverty.”
Gannon points out that raising the minimum wage would not benefit about half of Vermonters in poverty – including those dependent on Social Security benefits. “About half of the people living below the poverty line in this state have no wage income,” Gannon says.
“Vermont has two economies; the Chittenden economy, and the rest of the state,” Gannon said, “a fact the bill did not take into account. I find it troubling.”