copyright the Chronicle April 9, 2014
by Paul Lefebvre
MONTPELIER — Vermont is going to increase its hourly minimum wage.
Vermont legislators generally agreed that it was the right and ethical thing to do.
But when, and by how much, is still hanging in the air.
Under a House bill that won preliminary approval Tuesday, next year on January 1, 2015, a minimum wage worker could see his or her weekly pay check jump by roughly $40.
That’s the result of an increase in the minimum wage going from $8.73 to $10.10 an hour.
“Forty dollars in your pocket is not a theory,” said Representative Tom Stevens of Waterbury, speaking in the urgent tone of legislators who wanted to make a change.
A member of the House Committee on Housing, General and Military Affairs, which brought the bill onto the floor after taking several weeks of testimony, Representatives Stevens offered that assessment just after supporters of the bill beat back a challenge that would have phased in the increase over a three-year period.
Offered by Burlington Representative Kurt Wright, the amendment would phase in an increase beginning in 2015 when the minimum would go to $9.19 an hour, climbing to $10.10 by January 2017.
Annual increases in both the original bill and the amendment would be set at 5 percent, or to increases in the Consumer Price Index.
The bill, which passed Tuesday by a healthy margin of 88 to 57 votes, is expected to win a third House vote before passing over to the Senate.
What still remains uncertain is whether the Senate will follow the House’s lead by allowing the increase to take effect next year — or go along with a more gradual implementation, which was recommended earlier by Governor Peter Shumlin.
In introducing the bill, Representative Jean O’Sullivan of Chittenden said a recent study by the legislative Joint Fiscal Office (JFO) estimated that, without an increase, there would 30,000 jobs in 2015 paying less than $10 an hour.
She said what the bill was offering was “an honest to God raise for hard-working Vermonters.
According to the JFO study, if the bill passes, annual income gains to low wage workers would be about $30-million. And that, Ms. O’Sullivan said, is money that would be plowed back into the economy from purchases of food, clothes and other basics.
While the study predicted the raise would have a negligible impact on the economy, roughly 250 workers could lose their jobs.
In introducing his amendment, Representative Wright said he was “speaking to the concerns of small businesses” that would be hardest hit if the raise went in all at once. His amendment won bipartisan support with the addition of a study that would use the three-year implementation to assess impacts on jobs and benefits.
The idea for a more extensive study than offered by the original bill was spearheaded by Representative Michael Marcotte of Coventry. In an interview before the floor debate, he said he was concerned that some low wage earners could lose benefits if the raise went through in one swoop.
One of his study’s purposes was to show how government subsidy programs should be adjusted for a “low-wage worker who is a single parent with one child.”
“I don’t want to see these people get hurt,” he said.
Representative Marcotte also argued that a study would help the state’s small businesses. He noted that some federal training grants require businesses to pay 200 percent of the minimum wage to qualify for the funds. And an hourly wage pegged at $20.20 would be impossible for many small businesses, he said.
Representative Sam Young of Glover was one of the Democrats who signed on to the Wright amendment. During an interview he characterized the $10.10 increase as a significant jump, and said small businesses would need some breathing room to adjust.
Speaking for the amendment during the floor debate, Mr. Young said while in Orleans County he thought he was liberal. But since coming to Montpelier, he had become a moderate.
The idea of linking an impact study with a phased in raise struck some as a winnable compromise.
Representative Paul Ralston told his Republican colleagues during a caucus that they were facing a rare opportunity in which they could be both pro labor and pro business. What they had to do, he said, was line up behind the Wright amendment.
But that tactic fell apart on the floor when Representative Chris Pearson won a procedural motion to split the amendment in two.
He said he wanted a study “without delaying getting the workers up to $10.10 an hour.”
He said the buying power of low-wage earners is shrinking, and that he wants to see the money go into their pockets.
Mr. Pearson, a Burlington Progressive, said the pay he got for being a legislator for roughly four months a year would just about equal the annual earnings a minimum wage worker made, working 40 hours a week.
Representative Ron Hubert of Milton, a retailer, argued that if the raise went into effect in January, it would cost him $38,000 a year.
But the motion to split the amendment won handily on a roll call vote, and all that was left was the issue of when the raise should go into effect.
Representative Marcotte argued that his study would have no effect if it were not linked to a phased in, three-year raise. But the majority in the House decided otherwise.
They easily defeated the Wright amendment, and opened the door for a final vote putting a minimum wage of $10.10 into play by the first the year.
The bill carried by nearly 30 votes. Among the representatives from Essex and Orleans counties, only Mr. Young voted for the measure.
contact Paul Lefebvre at [email protected]