Public Assets Institute > Policy Areas > Family Economic Security > State Senate committee acts to reduce income inequality

State Senate committee acts to reduce income inequality

The Vermont Senate Economic Development, Housing and General Affairs Committee voted this week to increase the minimum wage. This is a big step forward for thousands of working Vermonters who need a raise and for the Vermont economy that needs a boost. And it’s a concrete action to reduce Vermont’s growing income inequality.

The Senate bill would bring the minimum wage to $15 per hour by 2024. If the full Senate and the House concur, this will put an additional $240 million in the hands of low-wage workers and bring them closer to a livable income. And it will put more money into the Vermont economy as these workers spend this money for their basic needs.

By any measure, the buying power of the minimum wage has been decreasing. Minimum wage growth has been less than growth in Vermont’s productivity, overall economic growth, the median wage, the cost of child care or housing, and much less than the growth of wages paid to those in the highest-paying jobs.

It’s definitely time for an increase.

Public Assets’ State of Working Vermont 2017 report shows that income inequality is getting worse, and it’s getting worse faster in Vermont than in other states. Over the last decade, real annual wages for those at the bottom grew by only $500, while those at the top got a $6,000 raise. To make matters worse, the Republican tax bill enacted by Congress late last year is providing a windfall to those at the top at the expense of everyone else.

Raising the minimum wage will help low wage workers start to catch up.

Vermont can’t control broader economic trends, and the state can’t change what the federal government does. But we can push back with policies that put more money in the hands of workers who deserve to be paid a livable wage. The committee’s action this week is a step in the right direction.

 

Posted by Stephanie Yu on February 9, 2018 at 5:02 pm

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