By Rob Roper
The Legislature started out this session with the intention of passing a mandatory $15 minimum wage in Vermont. Their assumption is that businesses can afford to absorb the added burden in their budgets with no problems. The measure seems to be hitting some snags as it appears, ironically, the state’s own budget limitations are unable to absorb the higher wage.
So, here is a modest proposal for an alternative: pass a law mandating that workers earning less than $15 an hour make ends meet within their household budgets at the current minimum wage of $10.78. Just mandate that they buy more food, shelter, heat, etc. with the resources they have.
What? That’s absurd, you say. How can the government force people to stretch a budget further given no new resources? If workers could simply raise their standard of living on $10.78 they would already be doing so! Well, it is absurd. But no more absurd than insisting employers buy more payroll with money they don’t have.
The reality is that businesses are like people. Some are wealthy and thriving, and some are poor and struggling. All have to live within their budgets. To mandate that poor, struggling businesses — businesses that we hope will overcome their challenges to become wealthy and thriving — spend money they don’t have is futile, even counterproductive.
Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.
Re: “$10.78 doesn’t buy much heat or shelter.”
No, it doesn’t. And it doesn’t buy a Ferrari either. But it’s a start for those who live at home or who would otherwise be condemned to permanent public assistance when businesses are forced to restrict hiring because of the arbitrary increase in labor costs.
According to economist Thomas Sowell, 97% of those in the bottom 20% of wage earners at any given time migrated to higher wage groups within 8 years.
Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less.
Of those paid an hourly wage, never-married workers, who tend to be young, were more likely (4 percent) than married workers (1 percent) to earn the federal minimum wage or less.
NH has a growing workforce, higher wages and lower taxes than Vermont while also having one of the lowest minimum wage rates in the country. Vermont’s minimum wage is the 6th highest.
Keep this in mind too.
Bernie Sanders and the other socialist advocates pointing to Sweden and other Nordic countries as models for their mischaracterized governance recommendations, never explain that Sweden and the other Nordic countries don’t have minimum wage legislation.
$10.78 doesn’t buy much heat or shelter.
Not in Vermont. The Legislature makes sure of that.