Vermont's Minimum Wage is Failing Working Families - Rights & Democracy VT

Vermont's Minimum Wage is Failing Working Families

MONTPELIER – The key finding from a recent, weeklong challenge undertaken by nearly 20 legislators: Vermont’s minimum wage is not nearly enough for working families to meet basic expenses. In fact, most challenge participants went into debt quickly.

Nineteen legislators and another dozen community members from throughout the state took part in the Vermont Minimum Wage Challenge and nearly ALL of them failed. In other words, they were unable to live on a minimum wage budget of $10.50 an hour for one week.

These findings come as the House prepares to hold a public hearing this Thursday at 5:30 PM in Room 11 of the State House on S.40, a bill that would raise the minimum wage to $15 an hour.

“It’s imperative that we raise the standard of living for thousands of Vermonters and their families this session,” said Elise Greaves, Political Engagement Coordinator at Rights & Democracy, which is part of the Vermont Raise the Wage Coalition. “Raising the minimum wage to $15 an hour will put tens of millions of dollars directly into the pockets of Vermonters who will, in turn, put that money into Vermont businesses. This is just common sense economics.”

In a review of responses to a post-challenge survey, here were some key findings:

  • Almost none of the participants were able to actually complete the challenge and live within their budget. In addition:
  • Food, rent, and transportation costs were top reasons why folks went over budget.
  • Others, though they came close, or met, their budget had to put off paying bills or borrowed money to help them make it through the week.
  • Many skipped meals, or put off car repairs and doctor visits to make it work for that one week, though they acknowledged that they had no plans of how they would pay those bills later if this were their annual income.
  • Several participants found out - surprisingly - that they didn’t qualify for key public benefits because they made too much money.

“One of the things I've heard from people who oppose S.40 is that they are concerned about benefits cliffs and possible unintentional outcomes of raising the minimum wage. However, I was surprised that this was essentially a non-issue for a three-person, two minimum wage-earning household as we only qualified for 10 percent of the child care subsidy, but not 3Squares, Medicaid, or most of the food in our local Food Shelf.  Our family budget was in crisis mode from day one of the week, and there weren't sufficient resources available to make 80 hours a week at $10.50/hour a basic budget, let alone a livable one. In this process, I heard a lot of service providers share that shame keeps families from accessing supports. Working families in our state should not have to feel ashamed that they are unable to make ends meet. As Vermonters, we should feel ashamed if we let this moment pass us by without taking action."  Kate Larose, director, Financial Futures, Champlain Valley Office of Economic Opportunity, and who not only took part in the challenge, but posted daily videos about her experience.

For other participants, the struggle to meet their budget put them squarely in the shoes of nearly 70,000 Vermonters - many of them women and people of color - who struggle to put food on the table and gas in the tank of their car to get to work

PUBLIC HEARING: On Thursday April 5th, the House General, Housing, and Military Affairs Committee will hold a statewide public hearing on raising the minimum wage, from 5:30–7:30PM in Room 11 at the Vermont State House

“Our family failed [the challenge] mostly because of food and transportation costs. I am careful about food and we did not eat out. We are making car payments for two used cars, plus insurance. So that expense, plus food put us over budget,” said Sandra Paritz, director of the Poverty Law Project at Vermont Legal Aid. “At Vermont Legal Aid, we find that the lack of affordable transportation—especially in rural areas—is a big problem. Low-wage workers have to make car payments, or car repairs because they need a car to get to work. Then they do not have enough money for other essentials, such as food, rent, and utilities.”

Legislators who took the challenge said the week’s struggle provided an impetus to move quickly on passing S. 40 this session.

“I scheduled the first of our committee hearings on the minimum wage bill after the challenge reinforced how important it is to raise the wage,” said Rep. Helen Head (D-South Burlington), chairwoman of the House Committee on General, Housing, and Military Affairs, and a challenge participant. “A higher wage would have made it easier for me to pay a couple of important bills that were due.”

“I had forgotten how much mental and emotional energy is takes to figure out how to have enough to eat and pay bills when you always know that you don’t have enough to do both. That level of uncertainty about such basic needs saps one’s energy and makes sustained attention to other aspects of life difficult,” said Rep. Sue Buckholz (D-White River Junction).

“I was truly surprised by the fact that no matter how I tried to only use items I could afford at $10.50 per hour, I could not do it. I’m pretty good at finding the best deals at the supermarket, but I wasn’t as good as I needed to be without assistance,” said Rep. Tom Stevens, (D-Waterbury), and vice chair of the House Committee on General, Housing, and Military Affairs, who said he put off hundreds of dollars in bills. “I immediately would have been able to upgrade the food I purchased, and I would have a slightly simpler time paying my ongoing bills: housing, utilities, etc.”

VERMONT MINIMUM WAGE CHALLENGE BACKGROUND

Today, more than 25,000 working Vermonters eke out a living on minimum age, and more than 70,000 would see much needed raises with a $15 an hour minimum wage.

As part of the challenge, participants were asked to start with a budget depending on their personal life circumstances as follows:

  1. Married person living alone - $161.00  
  2. Married person sharing housing cost w/spouse - $274.50
  3. Single person living alone- $147.00
  4. Single person sharing housing cost w/partner or roommate - $260.50

Take home pay for full time minimum wage workers averages $388 for a married person and $374 for a single person (40 hr week of earning $10.50, taking into account taxes).  Subtract from that $227 (average housing cost for minimum wage workers, or $113.50 if sharing rent) and participants had a weekly budget of between $147 and $274 to pay for food, transportation, child care, medical expenses, debts, entertainment and so on.

A bill that would raise the minimum wage to $15 passed by the Senate in February, and is now being taken up by the House. The Senate bill (S. 40) would provide for steady, annual increases in the minimum wage over a six-year period with the rate reaching $15 an hour in 2024.

In addition, RAD and other groups are urging Paid Family and Medical Leave Insurance to be passed this session.This bill would provide workers with ways to take time off to support themselves, family members without losing wages or their jobs.

The Senate Economic Development, Housing, and General Affairs Committee will hold a public hearing on this legislation on Tuesday, April 10 from 5–7PM in Room 11 of the State House.

Legislative participants in the Vermont Minimum Wage Challenge: House Majority Lead Jill Krowinski, Deputy Assistant Majority Leader Tristan Toleno, Representatives Helen Head, Mary Howard, Chip Troiano, Tom Stevens, Johanna Donovan, Jay Hooper, Diana Gonzalez, Selene Colburn, Barbara Rachelson, Susan Buckholz and Curt McCormack, Cindy Weed, Ann Pugh, and Diane Lanpher, and Senators Becca Balint, Alison Clarkson and Debbie Ingram.

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