By Sen. Alison Clarkson
It is unusual for legislators to serve on conference committees in January. Conference committees are formed to iron out the differences between the House and the Senate after both bodies have passed a bill. Most occur in April and May as we are moving towards the end of a session. But, as you’ll remember, the Legislature adjourned at an impasse on two big issues— paid family medical leave and increasing the minimum wage. As a result, I found myself serving on both of these committees of conference in January.
The House and the Senate compromised to pass both bills – both of which enable the lives of tens of thousands of Vermonters. As of Jan. 1 of this year Vermont’s minimum wage rose to $10.96 an hour. The bill we have just sent to the governor raises it to $11.75 in January 2021 and to $12.55 in January 2022. The bill also makes two reports due to the Legislature in January 2021 – one on tipped wages and one on agricultural wages.
By 2022 this increase will affect about 40,000 low-wage earners in Vermont, collectively increasing their incomes by $121 million, with a net gain to Vermont from increased tax revenue of $9.4 million. And while thousands of Vermonters will gain in this equation, it is estimated that approximately 280 will lose their jobs. Growing income inequality in Vermont is a major challenge and an obstacle to economic growth. Low wage workers have seen only stagnant wage growth – as their wages have only increased by 10% since 1979. By contrast, high wage workers have seen their wages increase over 49% in the same time period.
Franklin Delano Roosevelt created the original minimum wage to be the “minimum amount people needed to live on.” Sadly, the minimum wage and the livable wage diverged decades ago. No one in Vermont can live on the minimum wage now – so people work two or three jobs to earn enough to live on.
Unfortunately, even with this increase in the minimum wage, it is still not enough to afford a two bedroom apartment in Windsor County (where you would have to earn $19 an hour). In Vermont, without paying more than 30% of your income on housing, you have to earn $22.78 an hour (working 40 hours a week, 52 weeks a year) to afford a two bedroom apartment.
It is my hope that by raising the minimum wage we will reduce stress on Vermont’s working families so they can earn enough to live sustainably, work fewer jobs and help alleviate the burden public assistance places on our state budget and resources. Many of my colleagues value giving people a hand up and not a hand out. Increasing wages is one of the most effective ways to give people a hand up and improve the quality of life for Vermonters and Vermont families.
My hope is that our paid family medical leave bill will serve to not only benefit all working Vermonters and their families but will also be used to recruit new workforce to Vermont and to retain people already working. We heard from lots of Vermonters that this is a benefit which means a huge amount to them. People need time to care for critically sick children and parents, and they need time to bond with their new babies or newly adopted children. This benefit means Vermonters can take 12 weeks to bond and adjust to new children, and take eight weeks to care for a sick family member. This benefit will be especially valued by low-wage workers who will see this benefit cover 90% of their wages. Yes, it has a price tag of about $29 million paid for by a .2% payroll tax – but unlike Social Security – we’ll be able to use this benefit now, before we are 65 or 70 years old.
Many of us hoped this benefit would include time off for personal care (or TDI, Temporary Disability Insurance). It may in the future. We have asked for a report on including TDI which is due next January. Vermont often moves one step at a time – and in this case I believe our glass is two-thirds full and we will work in the next year or so to fill it to the brim.
I appreciate hearing from you. I can be reached by email: aclarkson@leg.state.vt.us or by phone at the Statehouse (Tues-Fri) 828-2228 or at home (Sat-Mon) 457-4627. To get more information on the Vermont Legislature, and the bills which have been proposed and passed, visit the legislative website: legislature.vermont.gov
Alison Clarkson is a state senator for Windsor County.
