Poverty has a corrosive effect on our families, our communities and schools, and on our Vermont state budget. I believe that along with climate change, poverty is the biggest challenge we face as a state. Our state budget increases in mental health, substance abuse prevention, food and housing assistance programs, education, health and corrections are in large measure a result of poverty’s impacts. Many of the economic issues we will address this biennium will, I hope, deal with reducing poverty. Whether that is increasing the minimum wage, passing a paid family leave bill, or creating more affordable housing – all will help improve life for our lowest income Vermonters.
This past week, the Senate passed an increase in the minimum wage to $15 per hour by 2024 – over 5 years. In order to hold harmless those families impacted negatively by the increase to their wages, we increased the childcare subsidy. Instead of moving to “one wage” for all workers, we left the tipped minimum wage – at half the minimum wage – and are asking for a study of both tipped and sub-minimum wage or student wages. 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.
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 increased by 10 percent since 1979. By contrast, high-wage workers have seen their wages increase over 49 percent in the same time period. Vermont’s minimum wage is still considerably lower than our livable wage. In enacting the original federal minimum wage, President Roosevelt meant for it to be the minimum amount people needed to live on. No one in Vermont can live on the minimum wage now – so people work two or three jobs to earn enough to live on. Windsor County has the second highest housing cost in Vermont. On average, you’d have to earn about $20.65 an hour – our current minimum wage is $10.78 an hour – to afford a two-bedroom apartment in Windsor County. 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.
We have listened to our businesses and recognize that for many this increase poses a challenge. We therefore chose a five-year phase in. Because our unemployment is low, many employers are currently paying well over minimum wage. It is estimated that over 66,000 jobs will be positively impacted with an estimated job loss of less than 1,000. Vermonters will see income gains of $200 million and Vermont will see additional state revenues of about $18 million.
Our Senate President Pro Tem Tim Ashe has charged each Senate committee to get out into Vermont and have a “field trip” in our subject area. So, the Senate Economic Development, Housing and General Affairs Committee “took to the road” last week and went to Bradford’s “The Space on Main” – a new co-working maker space. About 50 people came from all over Vermont to share ways in which they are breathing new economic life into our downtowns and sparking economic development in our rural state. It was very exciting to hear about their projects – from developing incubator hubs to rehabilitating housing to fostering entrepreneurship through education/training and partnering with higher education, creating maker spaces, providing technical assistance, hosting the digital economy and remote workers, and building Live-Work Communities.
Matt Dunne, former Windsor County senator and founder of the Center on Rural Innovation in Hartland, www.ruralinnovation.us, and the Black River Innovation Campus in Springfield, set the stage for the morning by describing the challenges rural Vermont is facing since this last great recession. Rural Vermont has lost population since 2008 – and is steadily losing its entrepreneurs, capital, and workforce. Large student debt means many college graduates are choosing to work in urban areas. Automation is putting many rural jobs at risk and the opiate crisis is especially tough in rural Vermont. And too many of our communities still do not have access to high-speed internet.
But rural Vermont has many attractive assets that we hope will create economic and social opportunities for our historic downtowns and village centers – providing the density that is essential to development. The housing is affordable, the historic manufacturing buildings are large and available, and in many places the internet infrastructure is high capacity. Springfield has the highest gigabyte capacity in the state. We can better leverage our schools, state colleges, law school, hospitals, and other institutions to foster innovation and build vibrant economic opportunities.
Many of the people testifying agreed that for our 21st century rural economy to thrive, Vermont urgently needs to make strategic investments in high-speed fiber internet, workforce training, apprenticeships, remote workers and education, recruitment, trailing spouses, affordable and market housing, downtowns and village centers, “seed” grants, Live-Work redevelopment, the digital economy, and student debt-forgiveness. Vermont has a rich history of innovation and entrepreneurship. Now, we need to leverage our ingenuity and assets to revitalize our rural economy.
I appreciate hearing from you. I can be reached by email at firstname.lastname@example.org or by phone at the Statehouse 802-828-2228 or at home 802-457-4627. To get more information on the Vermont Legislature, and the bills that have been proposed and passed, visit www.legislature.vermont.gov.
Sen. Alison Clarkson