Vermont GOP leaders blast $15 minimum wage as unaffordable for businesses

Michael Bielawski/TNR

$15 TOO HIGH: Republican leaders held a news conference to get out the message that a $15 minimum wage will hurt employers and employees in Vermont. Rep. Jim Harrison, R-Chittenden, takes his turn at the podium.

MONTPELIER – Less than 24 hours after the Senate Economic Development Committee approved a $15 minimum wage proposal, Republican leaders on Wednesday held a news conference to declare that the party is united against the bill.

House Minority Leader Don Turner, R-Milton, led the charge, surrounded by colleagues Sen. Joe Benning, R-Caledonia; Rep. Jim Harrison, R-Chittenden; Rep. Patricia McCoy, R-Poultney; and Rep. Brian Keefe, R-Manchester, among others.

“We stand united to protect the most vulnerable Vermonters,” Turner said. “I want to be clear this bill will not only hurt our state businesses but workers as well.”

Citing statistics from an October study by economist Tom Kavet, Turner said raising the minimum wage to $15 will lead to the loss of 2,830 jobs annually. “This doesn’t even consider our per-hour reductions, price hikes, business closures, labor automation and reduction in benefits,” Turner said.

Approved by Senate committee members in a 4-1 vote Tuesday, S.40 would raise Vermont’s current minimum wage of $10.50 an hour to $15 by the year 2024.

Other Republicans offered concerns on why a $15 wage is bad policy. Keefe, a member of the study committee that examined the idea last summer, said the measure is inflexible.

“I also lived in Manchester, where there are a lot of small businesses and a lot of entrepreneurs, and I hear from them about the impact this might have on their businesses, and how there’s no flexibility in this current proposal for companies that may offer benefits or flexible time and other things that are valuable to employees,” he said.

He added that he’s also concerned about parents who receive a childcare subsidy and might hit the benefits cliff if the wage is increased.

“There are several thousand parents with children who would lose ground economically, and that was clearly documented by the study group,” he said.

Benning, who spoke the most on the issue, acknowledged that some might wonder how a senator representing an economically challenged district could oppose a $15 minimum.

“That is always a legitimate concern, but primarily in my neck of the woods, the bigger concern [is] do we have jobs there available for us to begin with,” he said.

Benning handed out charts and graphs illustrating the gap in economic trends between Chittenden County and the rest of the state.

“If you are an owner of a coffee kiosk on Church Street in Burlington, you can average anywhere from 500 to 800 people an hour coming by your coffee kiosk. And if you are selling a cup of coffee for $3 a shot, you might very well be able to pay your employees $15 an hour.”

But foot-traffic in a rural part of Vermont can be just few dozen per day, he added.

“You can understand immediately why there might be a different impact in the Northeast Kingdom than is happening over in Chittenden County,” he said.

Benning said Vermont, which has the sixth highest minimum wage in the nation, is hurting itself economically along the Connecticut River border.

“Those of us who are from the Connecticut River Valley understand every day why it is there is such a strong economy in Colebrook, New Hampshire, as opposed to Bloomfield, Vermont, as Lancaster, New Hampshire, as opposed to Guildhall, or over in Keene as opposed to Brattleboro.”

He cited other cross-border towns that are doing stronger economically than their Vermont counterparts, and suggested that the media has done very little to report on the difference.

“I would implore these news organizations to take a drive down one side of the Connecticut River and then come back up the other side … and ask the question that is apparently not being asked by proponents of legislation such as this.”

McCoy cited other problems, including studies that show how people currently making close to $15 an hour will demand that their wages increase as well, adding further strain on employers.

“We don’t even know what the financial impact of this will be,” she said. “How will this impact K-12 education, or our higher education institutions, or our nonprofits, designated agencies and other nongovernmental organizations? The cost will be dramatic, and in many cases unbearable.”

Harrison reiterated that everyone wants higher wages, just not by legislative mandate.

“An edict from Montpelier doesn’t do it,” he said. “Ninety percent of Vermont businesses employ less than 20 employees — these are the bread and butter of what makes Vermont Vermont.”

Harrison said that competition for labor should drive up wages in a more sustainable way, and Turner noted that the state has very low unemployment right now (2.9 percent), and some of this wage competition may already be having a positive impact.

Michael Bielawski is a reporter for True North Reports. Send him news tips at bielawski82@yahoo.com and follow him on Twitter @TrueNorthMikeB.

Image courtesy of Michael Bielawski/TNR

10 thoughts on “Vermont GOP leaders blast $15 minimum wage as unaffordable for businesses

  1. Oh boy. While I agree that a minimum wage increase is ridiculous, as is any wage legislation (except maybe to cap CEO’s drain on shareholders and employees), the Republican response. as always, mixes truly valid critique with needless nonsense.

    e.g.
    1] the loss of child care subsidy – anyone who takes a loss for this reason will merely cut their hours to a beneficial level.
    2] please don’t talk about what makes Vermont Vermont unless it’s to describe the absolute Hell produced by the commie/socialistic/progressive/Liberal/Democrats.
    3] do not point to the low unemployment rate as a positive sign; it is merely corroboration that combining all the welfare benies allows one to live a life of comfortable leisure.

    I’m sure there’s more nonsense in there but I’m an old guy and wear out quickly.

  2. There are other associated costs that will increase commensurate with a minimum wage that have, heretofore, not been considered.

    Workman’s Compensation Insurance costs will rise to reflect the higher wages.
    General Liability Insurances will rise with increased sales figures – because prices will rise too.
    In fact, all business costs assessed on increased sales numbers will increase.
    FICA taxes will increase…even while the current income tax cuts are in effect.
    Unemployment Insurance premiums will increase to reflect the higher wages.
    Disability Insurance premiums will increase.
    Health Insurance costs will increase.
    In Vermont, even property taxes will increase on all of those earning less than $90,000/year.
    Social welfare subsidies will have to increase.

    And while these costs will increase in relation to the higher minimum wage alone, a cohort assigned to less than 5% of the workforce, the resulting increases that occur as the next tier of workers, those already earning $15/hr., demand their commensurate wage increases (equal pay for equal work – right), will also move higher. And as labor market equilibrium adjusts on up through all of the wage scales, these costs will increase exponentially, rendering the minimum wage increase to $15/hr completely ineffective, if not outright detrimental to those its intended to help…even if there are no layoffs.

    And then everyone will wonder why the cost of living continues to increase faster than the government can increase the minimum wage and our self-serving legislators will recommend yet another minimum wage increase.

    Caveat emptor when the dog you’re about to buy is chasing its tail.

    • Very interesting factual disclosure. Another point to be addressed:

      Given that a $15 per hr max realized, these people if in a upper Federal or State Income tax bracket, their increases will / might be taxed and if not able to file the complex tax forms (seek a CPA / PA) these factors will reduce their hourly wage. What did they gain? Lib politicians won’t disclose this info, but “feel good” about it.

      They might be better off given their current status. Tax brackets are a secret tax increase.

      I was self-employed 26 years, engineering with two patents. Many days I got about 3-4 hours sleep., on the road many many times, leaving at 4 am. When Polaroid, GE, Pitney Bowes, Martin Marieta, IBM and many others that demand my presents, it’s you better jump. Then you had 30 to 90 days to get paid after delivery. Might have to borrow money to pay the $15 per hour. I fought the taxing people tooth and nail.

      Absolutely no common sense and I’ll be damn if I’d let a politician dictate to me what I’m going to do with my company (that I totally financed, built, inventoried, hired and put up with employee BS.) while Libs sit on their asses and dictate policy / laws. Even coming to VT from out of state-Flatlanders. I could write a book.

      Damn, the pendulum better swing back to reality. Slaves to Montpelier and the US Gov. Very little reward for the business person. Sweat, tears and the main theme is “I did it, or I tried”. There was some rewards. Hard to take a vacation though.

      • “From each according to his ability, to each according to his need.”

        Unfortunately, those who buy into this philosophy, including Marx and Engels, have never carefully considered how society determines one’s ‘ability’ and ‘need’ or they’ve learned to profit from the dysfunction by either gaming the system or skimming their legislative and administrative fees from the prescribed transfer of wealth – no matter how misdirected and corrupt the political process becomes. Economist Thomas Sowell best articulated this move toward ‘Cosmic Justice’ as follows.

        “The question is not whether undeserved misfortunes shall be addressed. The question is whether they will be addressed politically, rather than the numerous other ways in which they have been, are being, and will be addressed, usually without high costs, counterproductive results, and dangers to the whole fabric of society that the politicizing of such misfortunes has produced repeatedly in countries around the world.”

        Oh, when will they ever learn?

        Oh, when will WE ever learn?

  3. Such a dumb idea. As if prices won’t rise to make $15 worth what $3 is today. Kinda like daylight savings time, cut it off at one end, paste it to the other–but it doesn’t actually change the hours of sunlight.
    BTW Keene is a nice place, and I worked the best job of my life there for 10 years. Brattleboro is too crowded. Very few well-paying private-sector jobs there, or people with skills for them anyway.
    There should be no minimum wage. Take it or leave it. When work is scarce, any income is better than nothing, and there is an incentive to acquire and improve skills.

  4. A forced minimum wage of $15 is shifting the cost of supporting low wage earners to small businesses and consumers.

    Most small businesses owners don’t get rich, usually work many more than 40 hours per week and value each job according to its value to the business.

    Are State programs to train / re-train workers for different / higher paying jobs not available? Are low wage earners not participating in these programs?

  5. There was a story recently about Sen Alison H. Clarkson, Windsor of Woodstock from the Ethan Allen Institute, a brief paragraph. This shows how out of touch her and Lib buddies are. She’s a flatlander lived and educated in the ways of NY & MA. This represents the backbone of NON CARING-UNREALISTIC VT LIBS leading to the destruction of VT. They don’t have a clue, no economic understanding.

    “Since 2013, state representative Clarkson, now Senator, has voted to raise fees and taxes on Vermonters by the astronomical amount of $303.5 million dollars. Vermonters are struggling mightily under this heavy burden”.

    “The voters should know that In February 2015, Ms. Clarkson was shameless in calling for a pay increase for herself of $17 dollars per hour for services done for constituents when the legislature is not in session.”

    Ms. Clarkson’s voting record can be easily found by in the Ethan Allen Institute web site. If I pasted the article site, it might be eliminated. Allso her voting record can be found in the Gov web site-voting records. Yup, another tax / drain on the people. Hell they don’t have to cough up the money for their decisions. If so, they’d seek a pay raise. SICK!

  6. If the Progressives who run this state gave a damn about the rest of us, they would start repealing onerous laws, cutting taxes, and doing their darndest to attract employers. But they detest capitalism and think people are too stupid to survive without the government help. If we became business friendly, we would get higher wages without the state mandating them. It must be that they plan to get more money by taxing the dope they, including Choom Gang Benning and a few others in the GOP, just “legalized.”

  7. This $15 hour pipe dream of liberals , all this will do is shut down small Mom & Pop stores.

    If Vermont was more Business Friendly ( Tax Cuts ) you might get some major players wanting
    to startup in our State . But In today’s business atmosphere ….. It not going to happen .

    I have watched almost all are the major businesses leave our state ……… wake up Montpelier !!

    • Absolutely agree with all the comments made. We have all seen ghost towns where businesses have left. Are we trying to be the first Ghost state? Those of us who employee individuals and pay our taxes are at the tipping point where there is just no more to give! This state has done all it can to stifle entrepreneurs starting new business. It is a shame what my great state has become.

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