VT Rep: $15 Min Wage Helps Women…But Would It?

January 10, 2020

By David Flemming

On January 9th, the House Committee on General, Housing, and Military Affairs considered the $15 minimum wage bill from 2019. Rep. John Killacky (D-Chittenden) began by saying, “I read (the 2019 report) ‘Women, Work and Wages in Vermont’ and the results were striking. Statewide women earn 84% of what men earn. Let’s get a pay raise for Vermonters (by passing the $15 minimum wage).” Killacky’s 84% number is based on hugely generalized statistics that leave a lot of relevant information out.

According to a Vermont Business Magazine article which borrows from a much more rigorous Paydata report, “overall, women in the US earn 79 cents for every dollar earned by men; when comparing compensation for all women versus all men (what PayScale calls the uncontrolled pay gap). However, in Vermont, women earn more – 87 cents for every dollar earned by men. Additionally, when PayScale controlled for various factors such as experience and job title (ie comparing apples-to-apples regarding compensation) to determine how much a woman makes compared to a man doing the same job, Vermont came out on top again.

Women tend to spend more time out of the workforce, which hurts their career. In 2018, we studied this issue and found that when a worker leaves the workforce, they incur a wage “penalty” upon their return. Workers who took a break for 12 months or longer experienced an average wage penalty of 7.3% relative to a similar worker who did not take a break. Women take more breaks and longer breaks than men, primarily for taking care of children and aging family members, and bear the brunt of this “time-off” penalty….Nationally, this ‘controlled’ pay gap shows that similarly qualified women earned 2% less than men who do the same job. But, in Vermont, the uncontrolled pay gap essentially disappeared and women and men in the same roles were paid the same amount.”

So there you have it. Vermont women earn 100 cents on the dollar if you take into consideration their work preferences, better than the 98 cents on the dollar that American women do. Without understanding this fact, a $15 minimum wage will do more harm than good. While $15/hour might give women already working a small bump in pay, other women will be prevented from returning to the workforce if they been out for a long while, because they can no longer produce $15 an hour worth of labor. Those women will earn 0% of what a man makes.

A lower minimum wage ensures that employers can afford to give women time to get back on their feet in the workforce, giving them higher wages as they return to peak productivity. A lower minimum wage gives women the flexibility they need.

To gain a broad understanding of this topic, click here.

David Flemming is a policy Analyst at the Ethan Allen Institute

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
Read more...

Latest News

VT Left Wing Media Bias Unmasks Itself

July 24, 2020 By Rob Roper Dave Gram was a long time reporter for the Associated Press, is currently the host of what’s billed on WDEV as a...

Using Guns for Self Defense – 3 Recent Examples

July 24, 2020 By John McClaughry  The Heritage Foundation’s Daily Signal last week published eleven news stories about citizens using a firearm to stop a crime. Here are...

FERC ruling on solar subsidies could help Vermont ratepayers

July 21, 2020 By John McClaughry Last Thursday, the Federal Energy Regulatory Commission finalized its updates to the Public Utility Regulatory Policies Act (PURPA), in what the majority...

The Moderate Left’s Stand for Free Speech

July 17, 2020 By David Flemming Harper’s Magazine, a long-running monthly magazine of literature, politics, culture, finance, and the arts, is hardly what you would call a ‘politically...

Trump’s Regulatory Bill of Rights

July 16, 2020 by John McClaughry “President Trump [last May] issued an executive order entitled  ‘Regulatory Relief to Support Economic Recovery.’ The executive order includes a regulatory bill...

Video