MONTPELIER — The Vermont Senate on Friday advanced a bill that would raise the state’s minimum wage to $15 an hour by 2024, and is nearly identical to legislation that passed last year but failed to become law after it was vetoed by Gov. Phil Scott.
For the past two years, raising the minimum wage to $15 an hour has been a top priority among Democrats in the Statehouse who say that hiking base pay for workers would help low-income Vermonters who have struggled with stagnant pay for years. The Joint Fiscal Office estimates that in 2024, when the $15 per hour wage would take effect, 66,000 Vermonters would see higher wages.
Sen. Michael Sirotkin, D-Chittenden, the bill’s lead sponsor, said that the measure would help Vermont combat income inequality. “In my mind … it is hard to imagine a more concrete, meaningful, effective fix than updating our minimum wage,” he said.
In a vote of 19-8, with all six Senate Republicans voting against it, the minimum wage bill now inches closer to the House. The dissenting Democrats were Sens. Bobby Starr and John Rodgers, both of Essex/Orleans. Addison County Sens. Bray and Hardy voted in favor.
Republicans, including the governor, and some moderate Democrats have opposed the measure over concerns that a mandated increase in the wage would unfairly burden small business owners and reduce benefits for working Vermonters.
They say that a higher minimum would likely encourage Vermont businesses to cut jobs and increase the price of goods and services to offset the cost of paying their employees higher wages. In areas near New Hampshire, which follows the federal minimum wage of $7.25, they worry that business and jobs will move across the border.
Sen. Randy Brock, R-Franklin, who voted against the legislation on Friday, said that while the bill aims to help low-income Vermonters, it would end up hurting them because small businesses would not be able to shoulder the additional costs.
“It’s got to come from someplace,” he said, referring to money businesses would have to pay their employees. “It’s got to come from someplace in our economy and typically it comes from price increases, or finding savings through job losses or automation.”
The Joint Fiscal Office estimates that in 2024, with a $15 per hour minimum wage, there would be about 900 fewer full- and part-time jobs in the state economy.
Throughout the country, economists are divided over how higher minimum wages impact state economies in the long term.
While some say it puts more money into the economy and people’s pockets, others say it leads businesses to transition to hiring fewer employees and increasing the cost of goods.
But, as Vermont considers adopting a minimum $15 wage, many other states have already done so.
Neighboring states like New York and Massachusetts have already signed laws that would phase the higher pay rate in over time, and just this week Illinois’ governor signed a $15 minimum wage bill into law.
With momentum to increase the minimum growing around the country, Sirotkin said he thinks it’s possible the governor will change his mind.
“This seems to be not a radical idea anymore and states are doing it and it’s getting somewhat easier to get there because of inflation, so maybe he’ll reconsider,” the senator said.
Rebecca Kelley, a spokesperson for the governor, said Scott could support a minimum wage increase if the proposal included provisions to prevent adverse economic impacts of such a hike.
He is particularly concerned about job losses, the cost to small businesses, and the reduction in benefits workers could see as a result of earning higher wages.
As in last year’s legislation, S.23, the bill the Senate approved Friday includes a provision to ensure low-income Vermonters don’t lose access to child care benefits as a result of earning higher wages.
Democrats acknowledge that with higher earnings, low-income residents will likely lose access to other benefits, like fuel assistance, and food stamps. But they believe that a higher wage will be more valuable for low-wage earners than the lost benefits.
“I would rather reduce benefits and empower Vermonters to feel proud and work with the wage they earn,” Sen. Alison Clarkson, D-Windsor, said on the Senate floor.
The minimum wage bill is expected to pass in the Senate on a second vote next week, and then heads to the House, where support for the measure will likely be less resounding.
Last year, in a preliminary vote, the minimum wage bill passed 77-69, revealing that many moderate Democrats in the chamber weren’t supportive of the legislation.
If Scott vetoed the bill once again, it’s unclear whether lawmakers in the House could muster the 100 votes needed to override it.