Senior Citizens Would Get Hit Hardest by a $15 Minimum Wage

by Rob Roper

The $15 minimum wage is an increasingly hot topic in the election debates. Proponents have faith that artificially increasing the cost of labor will be a benefit to low-wage workers. Opponents can point to evidence that the $15 minimum wage will force employers to lay off employees, cut hours, or go out of business entirely, damaging the overall economy. But the group that will be hurt most by a $15 minimum is senior citizens. Here’s why….

According to UVM economist Art Woolf, a majority of Vermonters living below the poverty line do not work. That’s 31,000 non-working poor. Many of these are retired senior citizens living on a fixed income. Of course, if you’re not working you will receive zero benefit from an artificial increase in the wage rate. However, you would be harmed by the very real inflation resulting from the policy.

Businesses would have to pass on the higher cost of labor to their customers in the form of higher prices for goods and services. Senior citizens living on fixed incomes would, therefore, have to pay more for things like food, nursing care, household help, etc. and so on, with no boost in income to help cover those costs. In other words, fixed incomes would not stretch as far under a $15 minimum wage.

Senator Richard Westman (R-Lamoille) raised an example from his own life experience in that he would no longer be able to afford in-home nursing care for his aging parent if the $15 minimum wage became law. He also noted that Lamoille Home Health and Hospice would have to raise or charge an extra $80,000 to cover wage increases for their visiting nurses, and that money will have to come from someone, most likely in the form of higher bills to the people in need of the service.

Vermont is the second oldest state in the union, which would mean implementing this experiment here would come with a disproportionately high level of pain.

Rob Roper is president of the Ethan Allen Institute.

{ 4 comments… read them below or add one }

Jim Toher September 19, 2018 at 7:04 pm

What about my daughter who went on and received a 4 year early childhood education degree, who want to stay in Vermont, and is getting just over $15/hour and the state provided medical insurance. Will her pay increase?

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Rob September 19, 2018 at 7:18 pm

More than likely, since she is already making over $15 an hour and there will be a need to use limited resources to raise the wages of less qualified workers currently making less then $15 an hour, your daughter will not get a raise.

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Deanne September 22, 2018 at 2:27 am

Thank you for trying to help people get this concept, Rob. Will the people who need to understand this read it, listen to it? Will it make any impression? I don’t see how people can be so short-sighted to think that a policy such as this won’t have a ripple effect. Wages must adjust to accommodate such a change. A doctor or lawyer (or whoever) who is making, say, $200,000 per year and paying office help $12/hour, isn’t going to just accept the cut in wage value and “eat” the loss of being forced to pay $15/hour. He is going to raise his rate or he has essentially accepted a pay cut. If anyone thinks about this for even five minutes – thinking through the repercussions – they would have to conclude it is a faulty idea. Maybe that’s the problem – thinking has become a rare activity…

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William Hays September 22, 2018 at 5:45 pm

When I first joined the Mount Mansfield Professional Ski Patrol in 1968, I made $2.90/hour. It was sufficient for food, rent, gas, and, most importantly, beer. Not a “kingly” lifestyle, but we (32 full-timers) got by, somehow. Long hours – ~63/week, 7-days per. No overtime.) Great, fun times!

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