Roper: House committee takes up harmful $15 minimum wage

By Rob Roper

This week the House Committee on General, Housing, and Military Affairs began debating the $15 minimum wage legislation, S.40, following the bill’s passage in the Senate. On Wednesday, representatives of the Joint Fiscal Office provided a broad overview of the likely impact of the higher wage if it becomes law.

Rob Roper

Rob Roper is the president of the Ethan Allen Institute.

The impact on employment, according to JFO, includes a net annual long term disemployment rate of 2250 jobs, disemployment as a share of total jobs of 0.05 percent, and disemployment as a share of minimum wage jobs of 3.3 percent. What this means is that Vermont would be losing about 2250 jobs a year from 2028-2040 after the $15 minimum wage was fully implemented in comparison to anticipated job growth if the current law remains in place. The negative impact would land way disproportionally on low income workers.

It can be expected that if the $15 minimum wage becomes law, low income Vermonters will experience other negative side effects, such as loss of work hours, loss of work-related benefits such as paid vacation and health insurance, as well as state sponsored benefits, for which the higher wage could be disqualifying. The state benefits most affected would be Medicaid, Reach Up, LIHEAP, EITC, and particularly child care subsidies.

The businesses most likely to be negatively affected by the $15 minimum wage include gas stations, retail stores, food and beverage establishments, warehousing and storage, food services and drinking establishments, textile and apparel, furniture and wood product manufacturing, large food product manufacturing, nonprofits and social services, and child care services.

Overall, JFO expected a -0.3 percent net impact of the $15 minimum wage on state gross domestic product.

Why lawmakers would consider — let alone pass — a law that they know will both drag on the overall economy and have significant negative impacts on the state’s most vulnerable businesses and citizens is mind-boggling. But, at this point it appears that a majority on this committee are inclined to support the bill.

Gov. Phil Scott has hinted strongly that he will veto the $15 minimum wage if it reaches his desk.

Rob Roper is president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Rob Roper

2 thoughts on “Roper: House committee takes up harmful $15 minimum wage

  1. Disemployment of .05% (1 in 2000) won’t scare the ignorant do-gooders. But if this equates to 2250 jobs it means there are 4.5 million jobs in VT, about 10 being performed for each adult. Good Lord, we are a busy place. Perhaps, with correct math, the rate is .5%; now that is significant.

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