By Keith Whitcomb Jr. keith.whitcomb @rutlandherald.com
MONTPELIER — The leader of the state Senate says he hopes to have a bill raising Vermont’s minimum wage on the governor’s desk by February. But there is work to be done.
Senate President Pro Tempore Tim Ashe, D/P-Chittenden County, said Monday he expects S.23, the bill that would raise the minimum wage to around $12.20 over a two-year period, likely will be taken up by lawmakers immediately when it reconvenes today.
Minimum wage bills introduced last session made it as far as a joint House and Senate committee attempting to iron out differences. Ashe said that’s likely where the process will resume.
Three members of the Senate and three members of the House will convene in committee again straight away to address what’s been left outstanding, he said.
Among them, the dates and actual dollar amounts that need to be tweaked, he said, given the bill was drafted with the intention it would pass during last year’s session — the first year in the two-year biennium.
Lawmakers had wanted to know what the impact of such an increase would be on the state’s budget, namely for mental health and other health care services, Ashe said, adding that most of the workers in those sectors are making above the proposed new minimum wage, but not all.
The Legislature expects to see reports on these questions before discussions resume.
Beyond those factors, much of the debate and revision was completed in the session that ended in May. Ashe said the Senate had wanted an increase to $15 over five years, but members in the House were concerned about going that far out. The compromise, at the time, was to raise the wage over a shorter period and see where things stood.
Concerns
Erin Sigrist, president of the Vermont Retail and Grocers Association, said this week the proposed increase may not be welcome news for medium- to small-sized retailers in low-population rural areas.
“The issue we need to keep in mind is that not every retailer is within a large population center, so (for) those rural retailers, or even those fairly new startup retailers, who have been in business for five, six or seven years who are still holding onto loan debt and trying to manage growing their businesses, paying rent or the mortgage, energy bills, credit card fees, etcetera … it’s a finite amount of revenue coming in and it makes it difficult for them to pay higher wages based on their competitors,” said Sigrist.
There’s also the “benefits cliff” to consider, where an increase might be harmful to certain workers, disqualifying them from receiving benefits but not paying enough to compensate for the loss of those benefits.
Ashe said lawmakers have been hearing that the “benefits cliff” can affect child care, specifically, and lawmakers have taken measures to address that.
Sigrist argues there is more to consider.
“The legislature has discussed increasing the child care benefit, that would reduce the number of people being impacted by the benefits cliff, and I think that’s another piece we need to talk about,” Sigrist said. “Simply throwing money at the problem isn’t going to fix it. We really should be figuring out how to create public and private partnerships that allow these entry-level employees to gain additional skills so that they can continue to move up.”
Sigrist added: “The number of members that tell me, ‘I offered one of my employees a management position,’ or ‘I offered another employee an opportunity to make more money, and move up with more responsibility and they come back the next day and say: I can’t take it because I’m going to lose my benefits.’ That benefits cliff really holds people back, and if we can’t fix the cliff, we’re not going to fix the problem.”
Sigrist said the argument that a rise in the minimum wage will give people more spending power, as well as offset costs with higher sales is frustrating to hear for retailers who are concerned their business’ volume won’t increase regardless of how much people have to spend.
“I’m not saying we don’t want it, but it’s got to come from somewhere, and the small businesses mostly impacted are going to be retailers and retailers don’t have an extra $250 million to give out,” Sigrist said. “We’re not an island, and there’s (Amazon) … so it’s not as simple as saying, ‘Let’s throw more money at it,’ because the money has to come from somewhere.”
Governor
What Republican Gov. Phil Scott will do with the bill remains to be seen.
“Governor Scott wants to see wages rise and he’s supported measures, like what’s in place now, that tie increases to economic indicators,” said Rebecca Kelley, Scott’s spokesperson. “But his concerns with a mandated increase are that it would result in increased costs for consumers, fewer hours and job losses, all negating the intended benefit.”
She went on: “These concerns have previously been reinforced by the Legislature’s own economist. And, as the Legislature discussed last year, you also have to consider costs of addressing pay compression.”
Kelley said given that there were multiple options debated by lawmakers last year, with no final agreement between the House and Senate, the governor wasn’t willing to speculate on what lawmakers might produce in this session.
“The governor will view any proposal through the lens of these concerns,” Kelley said.
House Speaker Mitzi Johnson did not return calls for comment on Monday.
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