In Support of a $15 Minimum Wage in Vermont, and Against a Youth Wage

Workers throughout Vermont need to earn at least $15 per hour today, just to afford the basics; by 2024, they will need much more.

According to analysis by the Economic Policy Institute (EPI), an estimated 87,000 workers in Vermont (nearly 30 percent of the state’s workforce) would benefit from the adoption of a $15 by 2024 minimum wage.[i] The average worker who works year-round would receive an extra $1,710 in annual earnings.[ii]

Facing some of the highest costs of living in the nation, these workers need to earn more than $15 per hour today just to afford the basics. By 2024, they will need even more.  Analysis of EPI’s Family Budget Calculator shows that even single workers in the least expensive counties of Vermont (Essex and Orleans) need more than $19 per hour today to make ends meet. By 2024, these workers will need to earn an hourly wage of $22 or more. In these counties, single and married workers caring for at least one child—as well as all workers in Burlington, regardless of marital or parental status—need to earn significantly more.

Housing expenses, alone, can quickly drain the budgets of low-income families. The benchmark for affordable housing is 30 percent of income.[iii] Yet, in Vermont, with housing costs continuously climbing while paychecks remain flat, an increasing number of low- and middle-income families are having to spend more than 30 percent of their total household budgets on housing.[iv]

Today, in rural Vermont, rent for a modest one-bedroom apartment averages $811 per month, or 43 percent of pre-tax earnings from full-time work at the current state minimum wage.[v] In the Burlington metropolitan area, a one-bedroom apartment averages $1,121, or 60 percent of gross minimum wage full-time earnings.[vi] Rent for apartments with two or more bedrooms, which parents raising children would need, cost more and account for even larger percentages of gross monthly earnings. (See Appendix 2 for additional estimates by county or region, and apartment size).

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Endnotes

[i].          Economic Policy Institute, Economic Policy Institute Minimum Wage Simulation Model, [February 5, 2019], https://www.epi.org/files/uploads/EPI_15_by_2024_state_tables.pdf.

[ii].         See Appendix Table 5 of David Cooper, Raising the Federal Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million Workers, Economic Policy Institute, February 5, 2019, https://www.epi.org/files/pdf/160909.pdf.

[iii].        Urban Institute and National Housing Conference, The Cost of Affordable Housing: Does it Pencil Out? July 2016, http://apps.urban.org/features/cost-of-affordable-housing/.

[iv].        Public Assets Institute, “Part 2: Family Economic Security,” The State of Working Vermont 2018, December 2018, http://publicassets.org/wp-content/uploads/2019/01/SWVT2018final.pdf.

[v].         National Low Income Housing Coalition, Out of Reach 2018: Vermont, http://nlihc.org/oor/vermont. Comparison to pre-tax monthly income assumes 2,080 hours of work per year.

[vi].        Ibid.

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