Courier Q&A: Minimum Wage?

QUESTION: Many starting wages are already well above Vermont's minimum wage. Is this an indication that Vermont needs to readdress what the minimum wage is, or an indication that the minimum wage is currently not needed? What changes, if any, would you like to see made to Vermont's minimum wage law?

Randy's Answer:

Vermont’s current $12.55 per hour minimum wage is below the wage actually paid to many typically low-wage workers. 

The state’s shortage of workers and an historically low unemployment rate are among the causes.   Companies such as McDonald’s advertise starting wages at some restaurants at $15-$17 per hour depending upon the shift.  Walmart advertises starting wages from $14 to $16 per hour. 

But there is still the question as to whether a higher minimum wage would benefit workers and the Vermont economy even more than these market-driven increases.   Although increases ostensibly put more money in worker’s pockets, there are always counter effects.  Not only in Vermont, but across the country we have seen that higher wages drive higher prices and add to inflation.  That is particularly significant today as we are at a 40 year inflation high.  Many Vermonters, especially seniors who are on fixed incomes, suffer when inflation-driven costs of food, gas and almost all other goods and services eat into their limited incomes. 

Depending upon the type of business, minimum wage increases have caused employers to react by reducing staffing, cutting back hours, shifting work to other states, outsourcing production jobs overseas or, in some cases, going out of business.   We even can see locally how some companies have increased automation to reduce the need for workers in customer-facing businesses ranging from McDonald’s to Maplefield’s, where even now automated cashiering is being installed.  Mandates such as increasing the minimum wage in the current environment risk doing more harm than good.

There is a delicate balance in deciding how to measure the good to workers of a minimum wage increase and the effect on jobs, consumers and the economy.  In the last two years, the General Assembly has passed record legislation designed to help Vermonters not just recover from the pandemic, but to prosper beyond that.  We have put huge sums into economic development, job training, skills development, job creation and investment in infrastructure -  all of which are investments that also create better, higher paying job opportunities for Vermonters.  I am committed next year to continue on that path and doing so in a way that will strengthen our economy and uplift the wages of thousands of our citizens.