1. What is the minimum wage in Vermont?
the federal minimum wage?
3. Are there other states with higher minimum wages?
4. What is a COLA?
5. Isn't it mostly just young people starting out who aren't earning livable wages?
6. I never thought the minimum wage was supposed to be a livable wage.
7. Increasing the minimum wage will be good for businesses.
8. Plus, it's fair.
9. Increasing the minimum wage will be good for taxpayers.
10. Won't increasing the minimum wage make it harder for Vermont businesses to compete with New Hampshire and other border states?
What is the minimum wage in Vermont?
Currently the minimum wage in Vermont is $8.06
an hour ($16,765 /yr.) in 2009. The Vermont minimum wage increases every Jan
1st based on a cost-of-living adjustment (COLA) using the national CPI-U
(Consumer Price Index-Urban) figure. Nationally, the minimum wage
is $7.25 an hour ($15,080
/yr.) in 2009. The minimum wage is important even to those earning considerably
above it. Because the minimum wage sets a limit on how low wages can go
for most people, it also sets the starting point for where wages move
up from. Since the minimum wage is so low, it helps keep wages in
general lower -even for those of us earning in the $8 to $9 an hour
the wage had just kept pace with inflation since 1969 when it was a
$1.60 an hour, minimum wage would be approximately $10.00 an hour in 2009. However, because it has not, the extremely low minimum wage is helping to pull wages down for everyone.
What is the federal minimum
On July 24th,
2007 the federal minimum wage increased to $5.85, the first increase in
10 years. The Fair Minimum Wage Act of 2007, signed into law on May 25th,
2007, increases the federal minimum wage from $5.15 to $7.25 by 2009.
Are there other states with higher minimum wages?
Several states have higher minimum wages than Vermont. Vermont's rate
is the third highest rate in the country as of January 2009. Many
state legislatures are currently debating increases to their state
minimum wage rates. For states with a minimum wage lower then the
federal they adhere to the federal wage. As of July 24th, 2009 the
federal minimum wage increased to $7.25 therefore any state with a
minimum wage lower will automatically be increased. For the most up to date list of state rates go to: http://www.dol.gov/esa/minwage/america.htm
(F) - State does
not have its own minimum wage laws, but adheres to federal minimum wage
requirements. (1) Applies to
employers with an annual sales volume of more than $625,000. The federal
minimum wage applies to employers with annual sales of $625,000 or less. (2) Without
benefits. (3) With benefits.(4) Applies to
employers with an annual sales volume of $267,000 or more. The federal
minimum wage applies to employers with annual sales less than $267,000 and
14 & 15 year olds.
What is a COLA?
cost of living adjustment (COLA) is a tool used to increase wages based
on inflation. The Consumer Price Index (CPI) is used to adjust dollar
values for inflation. There are several ways to calculate a COLA for
the minimum wage rate. Some states, such as Washington, base their COLA
for the minimum wage rate on changes in the Consumer Price Index for
Union Wage Earners and Clerical Workers (CPI-W). In other cases, such
as the Federal Poverty Measure, an alternative CPI is used to calculate
annual increases. There are currently minimum wage COLA's in Vermont,
Oregon, Washington, and Florida.
Isn't it mostly just young people starting out who aren't earning livable wages?
is a favorite argument of businesses- the only people earning the
minimum wages or low wage in general are teenagers living with their
parents. But it just isn't true. According to the phase 8 of the
Vermont Job Gap study, Sixty-one percent (61%) of all year round full
time workers in Vermont who earned less than $15,000 ($7.20/hr) in 1999
were over 29 years old. Over 10,000 full time workers over 29 earned less than $15,000 per year.
I never thought the minimum wage was supposed to be a livable wage.
originally passed as part of the Fair Labor Standards Act in 1937, the
minimum wage was supposed to be enough for one working parent to
support a family of four. President Franklin Delano Roosevelt declared,
"No business which depends for its existence on paying less than living
wages to its workers has any right to continue in this country. By
living wages I mean more than a bare subsistence level-I mean the wages
of decent living."
Won't increasing the minimum wage lead to inflation with prices going up and mean that people end up no better off than before?
is no good evidence one way or the other that increasing the minimum
wage will lead to increase inflation. There are examples over the last
thirty years when wage hikes did not spur inflation and other times
when inflation occurred with no wage hikes.
any event, what does it tell us that we are always hearing from
politicians, business organizations and the media about the possible
inflationary effects of increasing wages at the low end of pay scale
but no concern is mentioned about the effects of the enormous
concentration of wealth by the richest Americans, or the obscene speed
at which pay for corporate executives is increasing.
average annual compensation of a CEO of a large company in 1998 was
$10.6 million, 419 times what the average worker makes, according to
the organization United for a Fair Economy. That ratio has risen from
49 times to 1 in 1980. Had workers' pay risen at the same rate, the
average worker would earn $110,000 today, not the $29,000 that an
average worker makes. Had the minimum wage increased at the same rate
as CEO pay, it would be $22.08 today, according to the Institute for
Policy Studies. (Washington Post, 8/30/99)
bottom line is that inflation is constantly on the rise, whether
workers get a wage increase or not. Blaming inflation on those who make
the least is nothing short of shameless. Since the last time the
minimum wage was raised nationally in 1996 the economy has created 3.9
million new jobs and inflation has fallen from 2.7% to 1.9%--its lowest
level in a generation. According to John Schmitt, an economist with the
Economic Policy Institute in Washington, D.C., "The fact is that we
have seen and will continue to experience price increases in cities and
nationwide that have little or nothing to do with the minimum wage. In
reality, proposed efforts to raise the wages of America's lowest paid
workers will help wages catch up with price increases that are
happening independent of wage fluctuation."
Increasing the minimum wage will be good for businesses.
all know that when we have more money we will spend more. This will
work with a minimum wage increase too. Higher wages will mean more
discretionary income that people can choose what to do with. So while
businesses will have to pay that higher wage, they will get their money
back in increased business. This money will circulate in the economy
and multiply, leading to increased economic growth for everyone.
Plus, it's fair.
now businesses paying a livable wage because they believe it's the
right thing to do have to compete with businesses that don't. This will
put all businesses on a level playing field and allow businesses to
compete on the basis of the quality of their products and service.
Increasing the minimum wage will be good for taxpayers.
people are paid below a living wage, they are forced to receive public
assistance or go without necessities. This helps drive up taxes for
everyone. If businesses paying a living wage directly to employees, it
could mean lower taxes for everyone.
Won't increasing the minimum wage make it harder for Vermont businesses to compete with New Hampshire and other border states?
A 1992 study by Princeton University economists examined changes in
employment at 410 fast food restaurants on the border area of New
Jersey and Pennsylvania before and after New Jersey increased its'
minimum wage from $4.25 to $5.05-a 18.8% increase. Their study found no
significant differences in employment in these businesses after New
Jersey raised the minimum wage.
there will be a Job Gap Study that determines livable wage amounts for
Maine and New Hampshire, and will provide us with much more information
on this issue. Preliminary results show that Maine's livable wage
levels are comparable to Vermont's. Perhaps, instead of competing among
the northern New England states, we could work to pass minimum wage
rates that are similar across the region.