Raising the minimum wage?

Workers and businesses split
By Erin Mansfield, VTDigger
Workers say raising the minimum wage will help them spend money at local businesses, but local businesses say paying workers more will cause them to raise prices.
Those were the competing messages of witnesses who spoke at a public hearing on the minimum wage Thursday, Feb. 9, hosted by the House Committee on General, Housing, and Military Affairs.
The committee has been considering two bills, H.64 and H.93, which would incrementally raise the minimum wage to $15 an hour either by 2020 or 2022, respectively.
The bill calling for the five-year time frame has more than 50 sponsors, who are almost all Democrats. Gov. Phil Scott has made clear he opposes raising Vermont’s minimum wage at a rate faster than inflation.
Betsy Bishop, the chief executive officer for the Vermont Chamber of Commerce, says raising the minimum wage again would break a deal she and other business interests made with Gov. Peter Shumlin, former House Speaker Shap Smith, and former Senate President Pro Tem John Campbell in 2014.
As part of that agreement, according to Bishop, the Vermont Chamber of Commerce agreed to support raising the minimum wage to $10.50 by 2018, as long as leaders in the Legislature did not try to pass paid sick leave or raise the minimum wage again after 2018.
The minimum wage will be $10.50 in 2018. Paid sick leave has also become law; and more than 50 Democrats in the Legislature are supporting an increased minimum wage.
“We would prefer to see the Legislature allow the current law to be enacted, letting the rate increase annually with inflation after the scheduled increase next year to $10.50 an hour,” Bishop said in a statement. “This has been the plan for several years and changing that strategy now introduces uncertainty to already struggling businesses.”
On Thursday, Mark Vandenberg, the owner of Sun & Ski Inn and Suites in Stowe, which belongs to the Vermont Chamber of Commerce, opposed raising the minimum wage. He said the raise would “obliterate” local businesses that work with profit margins of $150,000 or less. He said businesses would see their bottom lines shrink “across the board,” and the smaller businesses will be hurt the most.
Mark Frier, owner of the Reservoir Restaurant and Tap Room in Waterbury, also opposes the increase. He said restaurant owners want wages to go up, but don’t know how much it will cost them. Frier pointed to tipped employees—especially servers—who are paid half the minimum wage from the employer and get the rest of their pay from customers. He said some are making $30 an hour, and raising the tipped wage would increase that.
Frier said the restaurants would raise menu prices to pay for the increase in the tipped wage, and those increased menu prices would give servers an additional raise because they are tipped based on the prices.
But restaurant workers say they need a raise, and the U.S. Department of Labor says raising the minimum wage will not hurt restaurants or cause job losses.
Emma Schoenberg, 24 of Montpelier, said she’s worked for minimum wage in the past. It was only when she started earning a higher wage that she was able to save money and pursue her aspirations.
“Here in Vermont, if we are going to continue to have conversations about business-friendly economics and affordability, we must remember that the worker is the base of all business, and I would say, not the business,” Schoenberg said.
Paula Schramm, a retiree from Enosburg Falls, said she can’t live off the payments she gets from Social Security so she works part time. When she got a raise from $10 an hour to $14 an hour, Schramm said she started shopping more at local businesses.
“I was so happy to be able to just spend some money there and get some things,” Schramm said. “So it is true that when you … can meet your bills and afford to live, everything that you make extra gets spent locally and does help increase the economy, does help the local economy.”
When they introduced the bill, Democrats estimated that 85,000 people would see a raise if Vermont’s minimum wage were raised. “That will be 85,000 more people spending money in their local economies,” Schramm said.
Mike Lantagne, a history teacher at Rice Memorial High School in South Burlington, also testified in favor of raising the minimum wage. Lantagne said historically the debates over child labor laws, hourly limits on workweeks, safety regulations, and whether to establish a minimum wage have all been similar—one side argued about human dignity; the other side warned about imperiling businesses.
“If we look at history, we’ve always been faced with what we know and then what we’re afraid of,” Lantagne said. He asked lawmakers to consider the stories of Vermonters who are having trouble surviving.
“What we know are the situations people are living in right now in Vermont because we don’t have a $15 an hour minimum wage and we’re not working toward it,” he said. “What we don’t know are these mysteries of what will happen in terms of ‘will some jobs have to be cut’ and things like that.”
“We face that same dilemma over and over again in history, and I ask you just to consider that as we consider the current question,” Lantagne said.