The $15 Minimum Wage Will Be Bad for Young Families

October 3, 2018

by Rob Roper

Gubernatorial candidate Christine Hallquist and Democratic leaders promised to revive and, if they win the additional seats they need in the house and senate this November, pass the legislation for a $15 minimum that was vetoed by Governor Scott this spring.

In a recent post I pointed out how a $15 minimum wage would cause serious financial pain for senior citizens living on fixed incomes. But a $15 minimum wage would also cause financial problems for families with young children in childcare via a wicked one-two punch.

As we know, childcare in Vermont is extremely expensive and, in some places, hard to find at all. Artificially raising the wages of childcare workers as much as 40 percent will cause that already prohibitive price to skyrocket, making the cost crisis worse. And, in cases where childcare businesses cannot recoup the costs of those higher wages through higher prices, they will go out of business, making the childcare availability situation worse. Even the child advocacy group Let’s Grow Kids warned that the wage increase “might even exacerbate the [childcare] situation…”

That’s the first punch. The second has to do with the “benefits cliff.”

A minimum wage increase is supposed to help the most vulnerable workers, but parents who currently earn minimum or low wage salaries stand to lose more in benefits then they might gain in wage increases under this new law. The Joint Fiscal Office calculated that a couple working full time in minimum wage jobs with one school-aged child would see an annual income increase by $1,155 in the first year of proposed minimum wage increases, but they would lose $1,334 in benefits.

So, the overall impact of the $15 minimum wage on the young parents would be that they will be left with fewer resources to pay for a more expensive service that is at the same time harder to find. “Brilliant!” as the beer ad says.

Rob Roper is president of the Ethan Allen Institute.

{ 1 comment… read it below or add one }

Deanne October 6, 2018 at 2:39 am

The main problem with this article is that those of us reading it understand and agree. Those who don’t, won’t be reading it here. So the challenge is … how to get this information to the ones who need it.

I have seen a couple of John’s articles in the Vermont Shopper (that’s how I first discovered EAI.) Some of yours should be printed there too.

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