by Hilary Niles vtdigger.org The House on Wednesday committed to raising pay for the state’s lowest income earners by $1.37 an hour January 1, 2015, after defeating an amendment to spread the increase gradually over three years. The phase-in, which was supported by the Shumlin administration, failed by a 30-vote margin, 87-57. The Senate takes up the bill this morning.
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About 20,000 Vermonters are projected to earn less than $10.00 per hour in 2015, according to legislative economist Tom Kavet. Their paychecks would grow by about $30 million under the proposal, Kavet predicts.
H552 will now go to the Senate. The bill will need to move quickly in the upper chamber to make the Legislature’s timeline of wrapping up the spring session in early May.
Senator Kevin Mullin, R-Rutland. File photo by Hilary Niles/VTDigger.org
Senator Kevin Mullin, R-Rutland, chair of the Senate Committee on Economic Development, Housing and General Affairs, said his committee would be asking many of the same questions that had been debated in the House.
“Some of the questions that I’ve flagged (are), what happens with the Earned Income Tax Credit, what happens with state benefits programs, things like that,” Mullin said. “We’re concerned that we don’t want to kick somebody off a cliff so that they’re actually going to end up in a worse position.”
Mullin’s committee started discussing H552 this week, and will take testimony about the House-passed bill from business groups starting at 9 am Thursday morning.
“Today, approximately 22,000 Vermonters are currently making less than $10.00 an hour," House Speaker Shap Smith said in a statement. "A Vermonter working full time and making the minimum wage cannot afford health care, housing or food without government subsidies. The Vermont House of Representatives’ vote today moves the state closer to a livable wage and means that Vermonters will be more likely to be able to meet their most basic needs,” said Speaker of the House Shap Smith. “Over the long-term, this bill will generate $30 million in income that goes straight to the pockets of working Vermonters. We can’t have a strong economy without a strong working class.”
Representative Helen Head, Chair of the General, Housing, & Military Affairs Committee said, “This bill is an effective step in helping Vermont’s low-income workers support their families and will enable people to put that money back into the state economy by spending at local businesses. This new pay rate will help address many of the problems facing working Vermonters, and will also help create more discretionary income, bolstering the state’s economy.”
Resistance to the bill in the House was fairly split along party lines. Most of the argument on the House floor revolved around the speed with which the minimum wage should be raised. No one argued that the state’s current minimum wage of $8.73 per hour is “livable.”
“I don’t think this bill is about what we ought to do. I think what we ought to do is clear,” said Rep. Anne Donahue, R-Northfield. “I think it’s about how and when.”
Rep. Helen Head, D-South Burlington, looks on skeptically as colleagues urge her committee to consider slowing down an increase to the minimum wage. Photo by Hilary Niles/VTDigger
Donahue worried that moving the state minimum wage too far ahead of neighboring states would handicap Vermont businesses.
Vermont’s current minimum wage of $8.73 is the highest in New England, with Connecticut close behind at $8.70. Massachusetts and Rhode Island are both at $8, while Maine is $7.50. New Hampshire currently goes by the federal minimum wage of $7.25.
Reps. Michael Marcotte, R/D-Newport, and Matthew Trieber, D-Bellows Falls, said the raise to $10.10 per hour is good, but not if it’s done too quickly.
The two proposed a “phased-in” raise, aligned with Gov. Peter Shumlin’s preference to step up to $10.10 per hour by 2017. They said the time was necessary, in part, to study the impacts of the raise on social service assistance and work force training programs.
But a one-time jump to $10.10 per hour, effective Jan. 1, prevailed. Tipped employees also may see their minimum wage rise.
As the bill stands, one study by the Legislature’s Joint Fiscal Office would broadly examine the impact of moving to a livable wage closer to $12.50 per hour. Another study — by the Agency of Commerce and Community Development, the Department of Labor and the Agency of Human Services — would analyze the impact a $10.10 minimum wage would have on public assistance programs.
Supporters relied heavily on a preliminary report by Kavet and former JFO staffer Deb Brighton. They predicted only a negligible negative impact for the state overall. They said advantages outweigh potential downsides.
“We find that a minimum wage increase to $10.00 would probably have negligible, if any, negative aggregate economic consequences and could be an important component in advancing some of the lowest income workers towards a livable income,” Kavet and Brighton wrote.
Because low-income workers are more likely to spend their raises, Rep. Jean O’Sullivan, D-Burlington, said the bill boils down to more of an economic argument than a philosophical one. The money workers earn will go straight back into the state’s economy, she argued.
Many lawmakers urged their colleagues to vote for the raise on moral grounds.
“Low-income Vermonters cannot pay their own rent,” said Rep. Cynthia Weed, P/D-Enosburg Falls. She calculated that, at the current minimum wage of $8.73 per hour, someone would have to work 89 hours per week, without a week off, to afford an average housing cost of $1,007 per month.
However, several lawmakers testified against the bill because, as Donahue said, it would do more damage than good. Higher wages could make people less eligible for public assistance, and they’d end up losing more in benefits than they would gain with the raise, some said.
Concerns
Although Marcotte and Trieber’s proposal to spread out the raise over three years failed, their suggestion to add the agency study of public assistance impacts was voted into the bill.
Citing the same Kavet report promoted by supporters, Marcotte highlighted the situation of a single parent with one child who receives public assistance. That family’s overall financial health actually wanes when the parent earns more than $9.62 per hour. The combined wages and benefits catch back up only when the parent makes $20.43 per hour.
Single parents with one child are not the predominant recipients of public assistance, Department for Children and Families Commissioner Dave Yacavone said in an interview Tuesday afternoon.
Yacavone said more than half of families receiving benefits are single parents with two children whose finances would not dip despite a sudden wage hike.
O’Sullivan acknowledged that about 5,000 families, such as those cited by Marcotte, may lose financial ground under H.552. Based on the economic report findings, she estimated their aggregate losses would be roughly $7 million of combined state and federal money.
“I am sure that AHS can figure out how to hold this subset of Vermonters harmless,” O’Sullivan said. “I’m sure they can figure it out.”
Yacavone is not so sure, however. He said the state’s hands are largely tied because the vast majority of assistance programs are federally funded and therefore bound to federal eligibility requirements.
“So, I couldn’t come in and doctor it, or ameliorate it because the federal government sets that,” Yacavone said.
Aside from worries about the social service “slope” that leaves beneficiaries worse off, traditional concerns also surfaced about the impact of a minimum wage hike on business.
In their economic report, Kavet and Brighton predicted the minimum wage raise may cost about 250 jobs statewide, or less than 1 percent of the state’s total employment.
House Minority Leader Rep. Don Turner, R-Milton, echoed concerns raised by Rep. Robert Bouchard, R-Colchester, about mandating a minimum wage increase just before implementing single-payer health care.
The Vermont Legislative
Bill Tracking System
Rollcall Vote Detail
2013 - 2014 Legislative Session
H.552: An act relating to raising the Vermont minimum wage
Date
Question
Total
Yes
Total
No
Total
Absent
Pass/
Fail
Jrn.
Page
04/08/2014
Shall the bill be amended as proposed by the committee on General, Housing and Military Affairs, as further amended?
87
57
4
Pass
Member
Vote
Ancel of Calais
Yea
Bartholomew of Hartland
Yea
Batchelor of Derby
Nay
Beyor of Highgate
Nay
Bissonnette of Winooski
Yea
Botzow of Pownal
Yea
Bouchard of Colchester
Nay
Branagan of Georgia
Nay
Brennan of Colchester
Nay
Browning of Arlington
Nay
Burditt of West Rutland
Nay
Burke of Brattleboro
Yea
Buxton of Tunbridge
Absent
Campion of Bennington
Yea
Canfield of Fair Haven
Nay
Carr of Brandon
Yea
Christie of Hartford
Nay
Clarkson of Woodstock
Yea
Cole of Burlington
Yea
Condon of Colchester
Nay
Connor of Fairfield
Yea
Conquest of Newbury
Nay*
Consejo of Sheldon
Nay
Copeland-Hanzas of Bradford
Yea
Corcoran of Bennington
Nay
Cross of Winooski
Yea
Cupoli of Rutland City
Nay
Dakin of Chester
Yea
Davis of Washington
Yea*
Deen of Westminster
Yea
Devereux of Mount Holly
Nay
Dickinson of St. Albans Town
Nay
Donaghy of Poultney
Nay
Donahue of Northfield
Nay
Donovan of Burlington
Yea
Ellis of Waterbury
Yea
Emmons of Springfield
Yea
Evans of Essex
Yea
Fagan of Rutland City
Nay
Fay of St. Johnsbury
Yea*
Feltus of Lyndon
Nay
Fisher of Lincoln
Yea
Frank of Underhill
Yea
French of Randolph
Yea
Gage of Rutland City
Nay
Gallivan of Chittenden
Yea
Goodwin of Weston
Nay
Grad of Moretown
Yea
Greshin of Warren
Nay
Haas of Rochester
Yea
Head of South Burlington
Yea
Heath of Westford
Yea
Hebert of Vernon
Nay
Helm of Fair Haven
Nay
Higley of Lowell
Nay
Hooper of Montpelier
Yea
Hoyt of Norwich
Yea
Hubert of Milton
Nay
Huntley of Cavendish
Nay
Jerman of Essex
Yea
Jewett of Ripton
Yea
Johnson of Canaan
Nay
Johnson of South Hero
Yea
Juskiewicz of Cambridge
Nay
Keenan of St. Albans City
Yea
Kilmartin of Newport City
Nay
Kitzmiller of Montpelier
Yea
Klein of East Montpelier
Absent
Koch of Barre Town
Nay
Komline of Dorset
Nay
Krebs of South Hero
Nay
Krowinski of Burlington
Yea
Kupersmith of South Burlington
Absent
Lanpher of Vergennes
Yea
Larocque of Barnet
Nay
Lawrence of Lyndon
Nay
Lenes of Shelburne
Yea
Lewis of Berlin
Nay
Lippert of Hinesburg
Yea
Macaig of Williston
Yea
Malcolm of Pawlet
Yea
Manwaring of Wilmington
Yea
Marcotte of Coventry
Nay
Marek of Newfane
Yea
Martin of Springfield
Yea
Martin of Wolcott
Yea
Masland of Thetford
Yea
McCarthy of St. Albans City
Yea
McCormack of Burlington
Yea
McCullough of Williston
Yea
McFaun of Barre Town
Yea
Michelsen of Hardwick
Yea
Miller of Shaftsbury
Yea
Mitchell of Fairfax
Nay
Mook of Bennington
Yea
Moran of Wardsboro
Yea
Morrissey of Bennington
Nay
Mrowicki of Putney
Yea
Myers of Essex
Nay*
Nuovo of Middlebury
Yea
O'Brien of Richmond
Yea
O'Sullivan of Burlington
Yea
Partridge of Windham
Yea
Pearce of Richford
Nay
Pearson of Burlington
Yea
Peltz of Woodbury
Yea
Poirier of Barre City
Yea
Potter of Clarendon
Yea
Pugh of South Burlington
Yea
Quimby of Concord
Nay
Rachelson of Burlington
Yea
Ralston of Middlebury
Yea
Ram of Burlington
Yea
Russell of Rutland City
Yea*
Ryerson of Randolph
Yea
Savage of Swanton
Nay*
Scheuermann of Stowe
Nay
Sharpe of Bristol
Yea
Shaw of Derby
Nay
Shaw of Pittsford
Nay*
Smith of Morristown
Not Voting
Smith of New Haven
Nay
South of St. Johnsbury
Nay
Spengler of Colchester
Yea*
Stevens of Shoreham
Nay
Stevens of Waterbury
Yea*
Strong of Albany
Nay
Stuart of Brattleboro
Yea
Sweaney of Windsor
Yea
Terenzini of Rutland Town
Nay*
Till of Jericho
Yea*
Toleno of Brattleboro
Yea
Toll of Danville
Yea
Townsend of South Burlington
Yea
Trieber of Rockingham
Nay
Turner of Milton
Nay
Van Wyck of Ferrisburgh
Nay
Vowinkel of Hartford
Yea
Waite-Simpson of Essex
Yea
Webb of Shelburne
Yea
Weed of Enosburgh
Yea
Wilson of Manchester
Yea
Winters of Williamstown
Nay
Wizowaty of Burlington
Absent
Woodward of Johnson
Yea
Wright of Burlington
Nay*
Yantachka of Charlotte
Yea
Young of Glover
Yea
Zagar of Barnard
Yea
* Member explained vote on floor. See the House Journal for the date in question.
House Vote on Minimum Wage Bill H552 April 8, 2014
TOSEEHOUSEACTIONONAPRIL8, 2014, INCUDINGACTIONONH552 CLICKHERE
HOUSE BILL 552
Tim McQuiston of Vermont Business Magazine contributed to this report.