Last May the 2019 legislative session ended with a sense of
frustration that we couldn’t get two key bills across the finish line, not
because of opposition in either the House or Senate, but because the two
chambers couldn’t agree on a common version for either bill. One of the bills, H.107, would have enacted a
paid family and medical leave insurance program and the other, S.23, would have
raised Vermont’s minimum wage. Both bills were high on the agenda as the 2020
session began a few weeks ago. They were
both sent to conference committees during the first week of the session to iron
out a compromise. Agreement was quickly reached and the bills were passed by large
majorities in both chambers and sent to the Governor. However, despite the overwhelming support in
the legislature, Governor Scott indicated that he would veto both bills and did
so for the Paid Family Leave bill on January 31st. The Senate has enough votes to override the
veto but getting to 100 votes in the House is still in question since the bill
passed 89 to 58.*
Affordability has been a mantra of the Governor since his
election in 2016. His approach has been
to hold down spending and taxes, a reasonable approach to be sure. However, affordability does not mean the same
thing to everyone. Those at the top end
of the income scale may see taxes as the focus of unaffordability. Those in the middle of the income spectrum worry
more about childcare, housing and medical expenses as well as taxes. Those at
the lower end of the income spectrum experience financial stress in every aspect
of life. When we try to address affordability, it is important to think about
the entire spectrum of wage earners.
The Paid Family and Medical Leave Insurance bill provides up
to 12 weeks each for new parents to bond with their newborn, 8 weeks for family
care due to illness, and 6 weeks of optional temporary disability benefits at
an additional cost for the employee’s own illness. The United States is one of
only two countries that do not have a paid family leave program, the other
being Papua New Guinea. The cost of
providing this insurance would be a premium of 0.2% assessed on earned income. For
a worker earning $50,000 annually, the cost would be $100. The Governor recognized
the need for such a program by offering a 6 week paid leave package for state
employees, a pool of 8,500 workers, at about 3 times the cost and opening it up
on a voluntary basis for any other employed Vermonters. Like any insurance program, the smaller the
pool of insured, the more expensive the cost. The legislature decided that all
working Vermonters should have the same access to this insurance with better benefits
and lower premiums.
Similarly, the Minimum Wage bill seeks to help Vermonters at
the lowest end of the pay scale. While
the House proposed to get to $15 over four years, the conference committee agreed
to a compromise that raises the minimum wage from the current $10.96 to $11.75
on January 1, 2021, and to $12.55 a year later.
It reflects the legislature’s commitment to supporting families and
communities throughout the state by giving our lowest wage earners a
much-needed raise. Increasing the minimum wage not only strengthens our
families and our workforce, it boosts the greater economy by putting more
spending power into the pockets of Vermonters. Forty thousand of our lowest
paid workers will see increased earnings over the next 2 years. Exceptions to
the minimum wage for tipped, student, and agricultural workers remain
unchanged.
* Note: On Wednesday, 2/5/2020, the House voted on the Governor's veto. 100 votes out of 150 members present were required to override the veto. However, the vote fell short with 99 members voting to override and 51 members voting to sustain the veto. The roll-call record on the vote can be found on page 239 of the House Journal of 2/5/2020.
