Majority Continues Assault on Small Businesses

by Rob Roper

Led by the new Majority Leader, Jill Krowinski (D-Burlington) Vermont Democrats held a press conference calling for a Vermont minimum wage of $15/hr. Keep in mind, they just raised the Vermont minimum wage to $10/hr. on January 1 and it will rise again to $10.50 in 2018. The federal minimum wage is $7.25. That’s also the minimum wage in New Hampshire.

Another priority for the majority party this year is passing mandatory paid family leave. This would amount to a de facto $40-$79 million tax on employers. Where is this money supposed to come from?

Marc Sherman, the owner and operator of a small business, recently wrote an op-ed in which he outlined many of the pressures employers like him are facing:

“In my small retail business, Stowe Mercantile, the pressure to lower prices on our goods is tremendous. As each year goes by, more customers come through with smartphones, comparing prices and availability of our products with other stores and with online businesses…. When sales have been particularly bad, I have forgone my compensation, sometimes for months, so that my staff continues to receive their paychecks every week.” VT Digger, 1/12/17)

Yes, Vermont politicians, when you mandate that some people receive money for no work, you condemn others to work for no money. (Yet you scream bloody murder at the thought of cutting your own salaries or per diems by small fractions.)

Benefits to employees from these policies are also highly questionable as well. As the Washington Post reported on a study of Seattle’s move toward a $15 minimum wage (it had increased to $11 at the time of the study), “The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle’s overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike.”

In other words, in response to the mandate employers were simply forced to fire workers and/or cut back their hours to maintain budgets. Let’s hope the new governor has his veto stamp out and inked up.

– Rob Roper is president of the Ethan Allen Institute.

 

 

{ 5 comments… read them below or add one }

John Mahaffy January 20, 2017 at 4:17 pm

One would like to think that elected officials possess a modicum of common sense, but if they do, one is left with the problem of discerning their motives for further undermining the economy, sabotaging small businesses, and exponentially expanding the unemployment list. What — with America slowly righting itself, is Vermont to step into the Hillary breach and lead the way to economic ruin and globalization?

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Mark Shepard January 20, 2017 at 10:30 pm

When politicians create an environment that replaces skill-based jobs with unskilled-based jobs, they are left with no other tool but the force of government to raise wages. Of course even that is only an illusion as unskilled jobs get automated out or the businesses go elsewhere or just out of business.

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Jim Bulmer January 20, 2017 at 10:32 pm

Way to go guys and ladies. Keep up this kind of irresponsible thinking and you’ll be a raving success at sinking businesses, jobs and fostering the second home market. Vermont’s a great vacation state, but few can afford to live here yesr round. Are any Dems in Montpelier in touch with reality????

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doug Richmond January 21, 2017 at 4:48 pm

Do some imagining!
Jill is a single mom, for at McD for $9 and hour. She has one baby and has trouble finding day care she can afford.
Jane is a simgle mom earning $9 an hour and barely getting by, never eats out
Both get a wonderful wage increase to $15 ! Wow Now both can be happy. Jane can eat out, and Jill can find affordable day care. Nice.
Jill goes to Jiane’s daycare. Woops the cost has gone up 50% due to rising labor costs. Jane goes to Jill’s McD for a nice meal, but wow the prices have gone up 20%!
2 weeks later Jill is laid off. Janes hours are cut drastically, or her daycare closes due to regulations and labor costs being beyond anyones reach.
But to the legislators they have done “something good that needed to be done.”

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William Hays January 21, 2017 at 5:41 pm

True story: I was at a local C-Store last week and overheard a conversation. The owner/manager was trying to explain, to a clerk, that he had to cut her hours, in order to avoid paying for ‘affordable’ health care. She was in tears. She wants to work, is young enough to not ‘need’ mandatory health care, and makes way less than $15.00/hour. I wonder what the kid is going to do. Methamphetamine may be the answer, for a short time. Other options are just as bad.

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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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