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Editorial: Wage hike deserves Senate approval

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Posted on March 31, 2014 |
By Angelo S. Lynn



Gov. Shumlin’s call for an increase in the minimum wage hike to $10.10 an hour by 2017 is not only the right thing to do, it also makes economic sense.

No reasonable person can argue that a lower wage is good for business or the nation’s economy. The economic goal of the nation should be to create and nurture a vibrant and thriving middle class, which includes those at the lower end of the wage scale who see the merits of hard work yield a lifestyle that, at the very least, can put food on the table and shelter overhead.

Moving Vermont’s minimum wage from its current $8.73 per hour to $10.10 over the next three years is gradual enough to allow business owners to adjust to added cost and plan accordingly, while making a significant different to those at the lower end of the wage scale. A worker making minimum wage today with a 40-hour-per week job earns pre-tax wages of $18,158 annually; at $10.10, those pre-tax wages will be $21,008. For a couple, or family, that’s roughly a $6,000 difference. Pump that money into the local economy (and you can be sure all of it would be spent), and that makes a difference, too.

The wage increase would affect about 16,000 Vermonters who earn less than $9 per hour, and another 24,000 wage earners who make up to $10 per hour, according to a report of non-agricultural sectors in 2012.

Some critics complain that businesses could be put at a disadvantage when competing against other states, and that “wage creep” will see wages go up throughout all sectors.

As to the latter concern, Shumlin matter-of-factly says he’s all in favor of “wage creep,” noting it has the same effect of pumping more money into the local economy, which stimulates growth and reduces wage disparity.

As for the first concern, the governor was able to entice fellow New England governors, along with New York, to raise their minimum wages simultaneously. That keeps the playing field level for the New England states and prevents one state from profiting at the expense of the others.

If the proposed legislation passes, wages will go up about $0.45 per hour for the next three years starting in January 2015, then revert back to a standard-of-living inflationary adjustment annually as it is today.

Caveats should be considered for the state’s significant seasonal workforce to ensure that sector of the economy continues to thrive, but otherwise it’s an initiative that’s good for business, good for people, and again puts the state at the forefront of an important issue that resonates with those creating the jobs of tomorrow. It has passed the House; it’s now up to the Senate to approve the measure and send it to the governor for his signature.

Angelo S. Lynn

 

 

 

 

 

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