Timing is everything

It’s understandable. The Fight for 15 has a certain alliterative ring to it. But ultimately, the number itself matters less than the timing.

The debate about raising the minimum wage in Vermont has clearly been influenced by the national push for a $15 an hour minimum wage and actions taken in other states. But when will Vermont get to $15? That is the critical question in this discussion.

The current $10 minimum wage is slated to go to $10.50 next year and grow with inflation after that. It would reach $15 by about 2034.

Proposals floating around the State House would raise the wage to $15 sometime between 2022 and 2026. The Minimum Wage Study Committee is looking at additional options, including $12.50 in 2021 and $13.25 in 2022. But all of these different wage levels and years get confusing.

The important question is: When does the wage need to get to $15 to make workers’ lives better?

There is already widespread agreement that the minimum wage needs to keep up with inflation so that workers aren’t worse off from one year to the next. But since costs also rise with inflation, the minimum wage can get stuck at a level below that needed to cover workers’ basic needs.

A good place to start in trying to answer this question is Vermont‘s livable wage1, which was $13.03 in 2016. If that had been the minimum wage last year, it would have inflated to about $13.35 this year, $13.65 next year, and $15 by 2022.

Rather than focusing on getting to $15, a better approach might be focusing on getting to a livable wage as soon as possible. That would mean a bigger jump sooner rather than later, followed by a growth rate that kept up with the cost of basic needs.

And for those who want to stick with the Fight for $15, the year to shoot for would be 2022 to make the minimum wage be a livable wage. If Vermont accomplished that, we could be confident we were improving the lives of low-wage workers.

 

  1. Every two years, the Legislative Joint Fiscal Office analyzes the amount different family types require to meet their basic needs. They estimate the wages each earner would need in order to cover that family’s costs. The official Vermont livable wage is the average of the urban and rural amounts for an individual living in a two-adult household with no kids. In 2016, the livable wage was $13.03 per hour.  []
Posted by Stephanie Yu on October 10, 2017 at 4:07 pm

Leave a Reply

Comment RSS RSS feed for comments

Comment Policy

We welcome and publish non-partisan contributions from all points of view provided they are of a reasonable length, pertain to the issues of Public Assets Institute, and abide by the common rules of online etiquette (i.e., avoid inappropriate language and "SCREAMING" (writing in all caps), and demonstrate respect for others).