A Modest Compromise on the $15 Minimum Wage

by Rob Roper

The legislature started out this session with the intention of passing a mandatory $15 minimum wage in Vermont. Their assumption is that businesses can afford to absorb the added burden in their budgets with no problems. The measure seems to be hitting some snags as it appears, ironically, the state’s own budget limitations are unable to absorb the higher wage.

So, here is a modest proposal for an alternative: pass a law mandating that workers earning less than $15 an hour make ends meet within their household budgets at the current minimum wage of $10.78. Just mandate that they buy more food, shelter, heat, etc. with the resources they have.

What? That’s absurd, you say. How can the government force people to stretch a budget further given no new resources? If workers could simply raise their standard of living on $10.78 they would already be doing so! Well, it is absurd

. But no more absurd than insisting employers buy more payroll with money they don’t have.

The reality is that businesses are like people. Some are wealthy and thriving, and some are poor and struggling. All have to live within their budgets. To mandate that poor, struggling businesses – businesses that we hope will overcome their challenges to become wealthy and thriving – spend money they don’t have is futile, even counterproductive.

Rob Roper is president of the Ethan Allen Institute. 

 

{ 2 comments… read them below or add one }

Vincent C. Hunter May 10, 2019 at 11:58 pm

For such an obvious reality to have escaped out legislators is…well just breath taking.

Reply

Hank Buermann May 11, 2019 at 1:03 pm

Breathtaking and, unfortunately, totally predictable. The political path that this state is on is suicidal. Our productive population is actively and aggressively bailing out.

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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.
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