MONTPELIER — Vermont’s Senate has approved a bill that will bring a raise to 28,000 Vermonters in 2021 and 40,000 in 2022.
The minimum wage increase will bring the hourly rate for Vermont’s lowest paid workers from $10.96 this year to $11.75 next year and $12.55 in 2022. Thereafter, increases will be pegged to the Consumer Price Index.
The Senate passed the bill 23-6. All of Chittenden County’s delegation supported the bill. Sen. Dick Mazza, who represents Grand Isle County and the town of Colchester, voted ‘nay.’
The bill previously passed the House 93-54.
With the Senate’s approval, the bill will go to the desk of Governor Phil Scott, who has not yet said if he will veto the bill.
Last year, the Senate sought to raise the minimum wage to $15 per hour, but that bill foundered on the opposition of moderate Democrats in the House.
Critics have argued that small businesses will not be able to afford the increased wages or will have to raise prices, making them uncompetitive with businesses in New Hampshire. New York State’s minimum wage is $11.80 currently and will rise to $12.50 at the end of this year for counties outside of the New York Metro Area.
Vermont’s Joint Fiscal Office has projected that 90 jobs will be lost in 2021 as a result of the increase and 280 will be lost in 2022.
Overall, the wage increase is expected to put $53 million in the pockets of low-income Vermonters in 2021 and $121 million the following year.
With higher incomes, there will be a hit of $17.3 million in combined lost federal funds and increased federal taxes in 2021 and $39.1 million in 2022, provided the governor signs the bill. Conversely, increased income tax revenue and lower benefit payments will be a net gain of $3.6 million to the state in 2021 and $9.4 million in 2022.