Vermont pushes for ‘livable wage,’ but can employers survive it?

By Jon Street | Vermont Watchdog

BURLINGTON, Vt. — State lawmakers are driving a bill that would raise the hourly minimum wage in Vermont to $12.50, but Rep. John Moran says he doesn’t think that’s enough to survive.

“For me personally, I would like to reach what we call a livable wage,” Moran told Vermont Watchdog following a Statehouse news conference Tuesday in Montpelier.

The Democratic representative, who represents Windham and Bennington, said he would support raising the state’s hourly minimum wage to $15, a 41-percent increase over the current $8.73 an hour wage.

“If we raise the wages for everybody then we’re putting more money into the economy, and we’re increasing the income for those business owners who are doing this,” said Moran, who is one of six co-sponsors for the minimum-wage bill.

Another co-sponsor, Rep. Chris Pearson, a member of the Progressive Party from Burlington, pointed out, “The reality is most of the low-wage employers are retail and service sectors and so, while obviously it’s a burden on them, they’re also going to have people who have more money in their pockets.”

“So you have an immediate stimulus for people who have not had any disposable income, and that will benefit the very people it will also present a challenge to,” Pearson said.

But Claire Benedict, owner of Bear Pond Books in downtown Montpelier, said increasing the minimum wage to $12.50, much less to $15, could be “too much” all at once.

“That would be a big jump all at once. I appreciate the sentiment behind it, but I think it might be too fast, too much all at once,” Benedict said. “We might not be able to hire as many people going forward.”

Another owner, whose business is just steps from the Capitol, said while he could afford to pay his employees $12.50 per hour, a further hike to $15 could hurt his business and his customers.

“In order to pay that wage, prices here have to go up. There’s no way around it. I don’t make that much money as the owner,” said Bob Watson, owner of Capitol Grounds Coffee in downtown Montpelier.

Employees, meanwhile, are voicing different concerns over Vermont’s minimum-wage law.

Maja Freeman, who works as a clerk at Salaam Boutique in Montpelier, told Vermont Watchdog, “I could make $12.(5)0 an hour work for me, but once you take taxes out of that it turns into basically $10 an hour or less.”

When asked whether that’s an amount she could live on, Freeman said, “Definitely not in Vermont.”

“We definitely have better benefits here than most places do. Other than that rent is pretty high, you have to drive everywhere, there’s no public transportation, really, in most places so there (are) a lot of other not-so-hidden costs in terms of living in Vermont specifically,” Freeman said.

Deputy Secretary of the Vermont Agency for Commerce and Community Development Lucy Leriche said while it’s unknown what the magic number is in terms of a minimum wage, it’s important for Vermont to stay competitive.

According to the U.S. Department of Labor, Vermont’s minimum wage is the third highest in the country at $8.73, behind Washington ($9.32) and Oregon ($9.10). To that point, Leriche emphasized the importance of balancing the interests of employers with those of employees.

“We support the idea that everyone should be making a living wage, but we need to balance that with employers’ ability to pay those wages and not drive them out of business and create higher unemployment,” she said.

While acknowledging another potential challenge with regard to raising the minimum wage, the deputy secretary noted it’s important to consider the advantages and disadvantages of doing business in Vermont’s neighboring states of New York, New Hampshire and Massachusetts — even nearby Canada.

“There could be mass migration of primarily customers, (and) even businesses, migrating over the border so they can control their labor costs,” Leriche cautioned.

The Vermont Legislature, in an effort to avoid those consequences, has commissioned economist Tom Kavet to conduct an economic impact study, which Moran said he expects will be available by mid-February.

Contact Jon Street at jstreet@watchdog.org and find him on Twitter @JonStreet.

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