MONTPELIER – Minimum-wage workers will see an increase in their earnings on Friday.
On Jan. 1, the state hourly minimum wage will rise 45 cents to $9.60 an hour, part of a series of incremental steps that will raise the wage to $10.50 in 2018.
In 2014, lawmakers passed legislation to raise the state minimum wage over a four-year period. At the time, the state minimum wage was $8.73 an hour.
Gov. Peter Shumlin, who signed the legislation into law in June 2014, spoke of the effect the change will have on workers and the economy.
“I was proud to sign this law and I am pleased to see the minimum wage rise once again next year,” Shumlin said. “Giving a boost to hard-working Vermonters is not only the right thing to do; it is also good for our economy as a whole.”
It is unclear how many workers in the state will be affected by the change. The state Department of Labor does not require employers to report what they pay their employees.
However, research conducted by the Department of Labor in partnership with the U.S. Bureau of Labor Statistics outlines which professions will see the greatest impact by the wage increase.
Among the workers who will benefit from the change will be fast-food workers, cashiers, child care workers and people who work in retail.
The current federal minimum wage, which was set in 2009, remains at $7.25 an hour. Vermont is among 14 states that will see increase in their state minimum wages in 2016. Currently, 29 states have minimum wages that are higher than the federal minimum wage.
Dan Barlow, public policy manager for Vermont Businesses for Social Responsibility – which supported the legislation to raise the state minimum wage – spoke of the impact the wage increase will have on workers in the state.
“When you raise the minimum wage to $10 an hour, it means 20,000 Vermonters get a wage increase, and this comes at a time when we’ve seen wage stagnation for decades,” Barlow said.
Barlow noted the vast majority of minimum-wage earners defy the stereotype of teenagers working the drive-through window at a fast-food restaurant. According to Barlow, 80 percent of people making minimum wage are over the age of 22, and 60 percent are over the age of 30.
Still, the increase doesn’t go far enough, Barlow said.
“We would prefer to see a living wage,” Barlow said. “We know a minimum wage doesn’t cover household bills.”
Keith Brunner, communications coordinator for the Vermont Workers’ Center, concurred with Barlow.
“I suspect that working Vermonters will see this as a welcome increase, but we see this as $9.60 is not enough to support a family,” Brunner said.
The Vermont Workers’ Center is one of many organizations across the country that is calling for a minimum wage of $15 an hour. During his presidential campaign, U.S. Sen. Bernie Sanders, I-Vt., has repeatedly called for a $15-an-hour minimum wage.
Jim Harrison, president of the Vermont Retail and Grocers Association, said he doesn’t expect the latest wage increase – in and of itself – will have a significantly negative impact on employers.
“Employers have to respond to the marketplace, and with low unemployment in the state, they have to do everything they can to attract workers,” Harrison said.
However, Harrison warned that the minimum-wage increase, combined with pending legislation to require employers to offer paid sick leave and paid family leave, could have a negative effect on the state’s economy.
“We need to be sensitive to any costs that we add to employers, because ultimately that impacts the cost of doing business, the attractiveness of doing business in Vermont and the cost of items being produced,” Harrison said.