Minimum Wage Hike scheduled to $10.10 on Jan. 1, 2015

Date: April 02, 2014

On March 10, Governor Shumlin held a press conference to announce that he was proposing an increase to Vermont’s minimum wage to $10.10 per hour by 2017; a bill doing just that, H.552 has been introduced in the Vermont House of Representatives.  The press conference occurred about a week after Shumlin and several other New England Governors had attended an event in Connecticut with President Obama promoting a national minimum wage increase.  Shumlin’s proposal would raise the minimum wage about 45 cents annually for three years, starting in January 2015.  According to a report presented to the Legislature in March, more than 16,000 Vermonters earn less than $9 per hour. “I don’t think there’s a Vermonter who believes that it’s OK to make $14,000 a year when you work a 40-hour week, if you’re getting paid the current federal minimum wage,” Shumlin said.  He asked that the Legislature send him a minimum wage bill this session.


Shumlin’s proposal was greeted with mixed reviews from Democrats, Republicans and Progressives.  Several bills have already been introduced that would raise the minimum wage even higher than Shumlin has proposed; one bill would raise it to $12.50 per hour, while under the Progressive ‘Economic Bill of Rights’ the minimum wage would increase to $15 per hour.  Others have said that Vermont’s economy is just barely recovering from the recent recession, so now is not the time to impose a mandatory minimum wage increase on Vermont businesses.  Opponents argue that ‘wage creep’ would be the result of an increased minimum wage.  Businesses would be forced to adjust the pay level of higher income workers to balance the increase received at lower pay tiers.  Many small businesses would be especially hard hit by the increased minimum wage, and the ultimate result would be fewer jobs.


NFIB/VT presented testimony (see below) to the House General Affairs Committee saying; “Since 2007, Vermont’s minimum wage has increased annually with inflation as a result of a compromise reached with the business community.  In 2007, advocates on both sides of the issue wanted to move away from annual debates over this issue.  The compromise also said that in no one year would there be an increase of more than 5%. As you know, Vermont currently has the 3rd highest minimum wage rate ($8.73) in the country (Washington at $9.32 and Oregon at $9.10 are the only states higher).


“Additionally, despite arguments by proponents for an additional increase, Vermont is not an outlier, but rather has been a leader on this issue; 19 states match the federal rate of $7.25, 4 states have rates below the federal rate, 5 states haven’t adopted a minimum wage and one state repealed the state’s minimum wage and left the reference to the federal rate. Three states have scheduled future increases that would exceed Vermont’s current rate; New York to $8.75 on 12/31/14 and to $9.00 on 12/31/15, Connecticut to $9.00 on 1/1/15, and California to $9.00 on 7/1/14 and to $10.00 on 1/1/16.


“An increase to $10.10 (the low end of current proposals), even spread out over time, will surely factor into the future hiring decisions of small business owners across Vermont and will likely make small businesses think about shifting hours and numbers of employees.”


On April 1, 2014 the House Committee on General, Housing and Military Affairs voted 6-2 in favor of an increase of $10.10. 


House Speaker Shap Smith says, “I think that there’s a good chance that we’ll move a minimum wage bill this year. I think we all would love to see a move to support people who are making wages at the lower end of the spectrum.” 


Some questioned whether legislative action on the minimum wage is possible in light of the fact that Legislature is already considering whether to impose a paid sick leave mandate on Vermont employers. Shumlin believes that that the positive economic impact of minimum wage increases is better vetted than that of paid sick leave.  Meanwhile Helen Head, D-South Burlington, the chairwoman of the House General Affairs Committee disagrees with the Governor’s analysis.  “I’m not sure that it is an either or proposition that is how some people have framed it,” said Head. “But I think that many people are understanding that it’s important that we make progress on both of these issues this year.”


NFIB urges you to contact your elected officials on the minimum wage using our Action Alert Center. We've made it fast and easy for you to communicate a message to your legislators and even provide talking points to help you craft your email.

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