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Raising Minimum Wage (S.67) to deal with higher livable wage, inflation also introduced.
by Timothy Page
The Vermont State Senate last week passed significant health insurance legislation and made several key appointments to state boards and committees.
Two major health insurance bills cleared the chamber. S.30, which updates and reorganizes health insurance statutes, and H.35, which separates the individual and small group health insurance markets, both passed their final readings. The Senate also approved S.9, a bill aimed at improving after-hours access to sexual assault protection orders.
In legislative appointments, Senators Joseph Major (Windsor), Robert Norris (Franklin), and Nader Hashim (Windham) were elected to serve two-year terms on the Judicial Nominating Board. The JNB has the important task of selecting candidates for judicial appointments, to be ratified by the rest of the Senate. Hashim and Norris are chair and vice-chair respectively of Senate Judiciary. Major, a freshman Democrat from Windsor County, is vice-chair of Senate Agriculture and sits on the Institutions Committee.
The Senate also named several members to various state committees, including Senator Brennan to the Governor’s Snowmobile Council and Senators Brock, Clarkson, Hashim, and Vyhovsky to the Legislative Committee on Judicial Rules.
Also, Kerrick Johnson of Middlesex was confirmed 30-0 as the new Commissioner of the Department of Public Service.
Several new bills were introduced, including legislation to increase the state minimum wage based on the livable wage (S.67), a proposal to repeal the Affordable Heat Act (S.68), and a bill establishing an age-appropriate design code (S.69). The Senate also received H.118 from the House, which aims to expand the scope of hate-motivated crimes.
The chamber is preparing for a joint assembly with the House on February 20 to elect a Sergeant at Arms and three trustees of the University of Vermont and State Agricultural College. A special resolution was adopted to streamline the trustee election process through a plurality vote system, a method that has proven more efficient than majority voting in past elections.
Daily sessions began with moments of silence in lieu of devotions, with the exception of Tuesday, when the Reverend Katelyn Macrae of Richmond led the devotional exercises.
The Senate also recognized the service of the latest class of legislative pages: Peter Burkholder of Barnard, Salvador Doyle of Montpelier, Lucy Hakim of Shelburne, Daphne Krohn of South Burlington, Dean Roy of Stowe, Hayley Sherman of East Montpelier, and Henry Smith of Shelburne.
The Senate will reconvene after the Presidents’ Day weekend break, with both chambers having agreed to adjourn on Friday, February 14, until Tuesday, February 18.
Article written with data from the Senate Journals.
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Categories: State House Spotlight
Legislation to increase the State minimum wage, based on a ‘livable wage’ (whatever that is), has been shown, over and again, to have the opposite effect from its intended purpose. Not only does it create a disincentive to hire untrained people, or those just entering the labor pool, the inflationary result of arbitrary wage increases devalues the dollars paid by increasing inflation at a higher rate than the rate of the increased minimum wage.
The more tangible effect of arbitrarily increasing the minimum wage is that it increases income tax revenues, benefiting the people pretending to have our best interests at heart. Naïvely, I once believed these minimum wage advocates didn’t know better. But I was wrong.
Another side effect will likely be requests for fewer work hours by minimum wage earners so they do not go over the income “cliff” and lose their state benefits. Of course, that is aside from the increased costs of goods and services to cover the additional labor expenses . . .
Bill: Keep in mind that the single expense of paying Minimum Wage Earners (MWEs) is not where the inflationary pressure comes from. It’s the ripple effect throughout the labor force from the MW increase.
MWE Smith is hired to do a job. Compared to other workers, he is likely to be less productive, require more training, and so forth. So, when MWE Smith gets a raise, let’s say from $14/hr. to $16/hr., what does his colleague, Worker B, (who is already earning $16/hr. because he is already trained and more productive) say?
Well, of course, Worker B says, “Where is my 14% wage increase?” So Worker B receives a raise to $18.30/hr.. Then Worker C, who already earns $18.30/hr., because he’s that much better trained and more productive than Worker B, says ‘Hey, I want $21/hr.’. And so it goes… right up the wage scale.
If anyone doesn’t believe this is the nature of employment compensation, just listen to your teacher’s union folks the next time they exercise their ‘collective bargaining’ strategies.
Also keep in mind that only about 1% of the workforce is in the MWE category. So, when the remaining 99% of the higher paid workforce receives their proportionately higher compensation, the aggregate cost of labor across the board rises exponentially. Not to mention the ancillary costs of insurance, retirement benefits, and FICA matching taxes.
Meanwhile, MWE Smith received a mere $2/hr. raise. And because the money supply into the economy is now exponentially higher, increasing demand for the same amount of goods and services (because the raises were arbitrary, not based on increased productivity), MWE Smith’s 12% increased wage now has less purchasing power than his previous lower wage.
ECON 101.
Correction:
“MWE Smith’s 12% increased wage now has less purchasing power than his previous lower wage.”
…should say…
“MWE Smith’s 14% increased wage now has less purchasing power than his previous lower wage.”
Next on the agenda, will be a pay increase for the house and senate, as their free food card is not enough to pay for their meals.
So the last time the minimum wage was increased, a deep recession hit so it was all for not. The response? Let’s try it again! It’s called insanity as we tried this before. How about lowering the tax burden so that money goes further for us all!
Inflationary pressures aside, this is one more example of business unfriendly Vermont at work. Minimum wage may be more, but jobs will be less as increased costs convince ever more Vermont businesses it’s just not worth it to stay here.