House Vote Sets Stage For High-Stakes Negotiation Over Vermont's Minimum Wage

May 15, 2019

House lawmakers gave preliminary approval Wednesday to legislation that would boost the minimum wage in Vermont, but Senate Democrats say the increase isn’t sufficient to improve the economic standing of low-wage workers in the state.

The disagreement between House and Senate Democrats sets the stage for a late-session showdown over the fate of one of their party’s signature issues. And while some Democrats continue to hold out hope for a minimum-wage compromise that would win the support of Republican Gov. Phil Scott, it’s still unclear whether he’ll use his veto pen to undo whatever Democrats manage to get across the legislative finish line.

The law that governs the minimum wage in Vermont first came into being in the 1950s.

During a marathon floor debate in the Vermont House of Representatives on Wednesday, Stannard Rep. Chip Troiano quoted a passage from that inaugural statute: “It is the declared public policy of the state of Vermont that … wages need to be sufficient to provide adequate maintenance to protect Vermonters’ health,” Troiano said.

Troiano said that law defines health as “the amount of assets or income required to maintain a family unit.” And according to him and many other Democrats and Progressives serving in the Legislature, Vermont’s existing minimum wage doesn’t come close to allowing for that kind of domestic maintenance.

“A furnace or appliance repair, a car repair or needed medical assistance, can send a low-wage working family into an economic tailspin,” Troiano said.

"Some of the things that we heard were, 'This is happening too quickly.' Or, 'How do we make sure that we're giving businesses a chance to adjust?'" — Rockingham Rep. Matt Trieber

While Democrats are largely in agreement over the need to raise Vermont’s minimum wage, consensus on how much it should go up has been hard to come by.

Earlier this year, the Vermont Senate passed legislation that would increase the minimum wage to $15 an hour by 2024.

Rockingham Rep. Matt Trieber said Wednesday that $15 by 2024 is an admirable goal. But he said it’s generated anxiety among many of his House colleagues.

“Some of the things that we heard were, ‘This is happening too quickly.' Or, 'How do we make sure that we’re giving businesses a chance to adjust?'” Trieber said.

So on Wednesday, House lawmakers instead gave preliminary approval to a bill that’s projected to get the minimum wage to $15 by 2026. It ties the minimum wage increase to an inflationary index (the minimum wage, under the House-passed legislation, would go up annually by 2.25-times the consumer price index). That means if the economy dives in the coming years, it could actually take longer to hit the $15 figure.

For many House Democrats, it’s a pragmatic compromise that gives hope that this year’s minimum wage bill might actually make it into law.

Earlier this year, the Vermont Senate passed legislation that would increase the minimum wage to $15 an hour by 2024. On Wednesday, House lawmakers gave preliminary approval to a bill that's projected to get the minimum wage to $15 by 2026 — it ties the minimum wage increase to an inflationary index.

Last year, the Vermont Legislature passed a bill that would have raised the minimum wage to $15 an hour by 2024. Republican Gov. Phil Scott vetoed it, and lawmakers were unable to override.

Scott though has intimated in recent weeks that he’s open to a less aggressive minimum wage increase.

Charlotte Rep. Michael Yantachka said he prefers the $15 by 2024. But when one House lawmaker introduced an amendment Wednesday that would have done just that, Yantachka — along with a majority of his Democratic colleagues — voted 'no.'

“And based on what we’re hearing from the governor, adopting this amendment will likely prevent any increase in the minimum wage from becoming law,” Yantachka said.

The governor, however, isn’t the only force that House Democrats have to reckon with. The Senate will need to sign off on the House plan in order for it to become law — and Senate Majority Leader Becca Balint indicated Wednesday that that isn’t going to happen.

“I can’t express enough to you how we do not like the [House] approach,” Balint said. “We feel like the timeline is too long. We feel like pegging it to the CPI [consumer price index] is much too modest an increase. And it’s very hard for us to imagine going back to our constituents saying that essentially, like, ‘You’re getting a quarter more an hour.’”

At $10.78 an hour, Vermont already has the eighth-highest state minimum wage in the country. Many House Republicans said Wednesday that Vermont businesses don’t have the capacity to absorb higher payroll costs.

Faced with the prospect of paying higher wages, House Minority Leader Pattie McCoy said many companies will make decisions that backfire on the low-wage employees that Democrats say they’re trying to help.

“Some people are going to lose their jobs, or they’re going to lessen their hours, because businesses can’t afford it,” McCoy said.

"Some people are going to lose their jobs, or they're going to lessen their hours, because businesses can't afford it." — House Minority Leader Pattie McCoy

McCoy said if the free market can bear higher wages, then workers will get them.

“My feeling is, if a business can’t find somebody to work at a particular wage, they will increase the wage until someone wants that job at that wage,” McCoy said. “No one’s precluding any business from hiring someone at $15 an hour right now.”

The governor’s office has been sending mixed signals in recent weeks over Scott’s stance on the minimum wage issue. Administration officials have said the Republican governor is open to signing a less aggressive minimum wage bill than the one passed by Senate lawmakers in February.

Last week, however, Scott said he’s concerned about the economic impacts of even a more modest wage increase.

“Get outside of Chittenden County, and get to the rural areas of the state where they are literally across the river from New Hampshire, and they’re competing,” Scott said. “And I believe that this would put businesses at a disadvantage.”

Scott’s decision on whatever Democrats send him will be consequential. The minimum wage legislation approved by the House Wednesday passed by a vote of 90-53, which means Democrats and Progressives — at this point at least — don’t have the numbers to override a gubernatorial veto.

Scott said low unemployment rates in Vermont are beginning to solve the wage issue on their own.

“We have companies looking for people, and when they compete for people, wages generally go up, and that’s what we’re seeing,” Scott said.

According to the Montpelier-based Public Assets Institute, however, median household income fell slightly between 2007 and 2017, the last year for which U.S. Census data is available. And with more than 66,000 Vermonters making at or near the minimum wage now, Democrats say it’s incumbent upon the Legislature to ensure they get a raise.