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2016-01-05 / Front Page
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Shop owners sound off on new Vermont minimum wage
By Allan Stein
allans@eagletimes.com
SPRINGFIELD — The increase in Vermont's minimum wage from $9.15 to $9.60 an hour is yielding mixed reviews from small retail store owners, who feel it will be either a deterrent to hiring or a boon for businesses.
Tina Vittum, owner of Tina's Hallmark Shop in Springfield, said the minimum wage hike will put a strain on small businesses struggling in a soft economy.
"I think it could be a deterrent [to hiring]. This is my biggest expense — payroll," said Vittum, who opened her greeting card shop at 2 Chester Road eight years ago.
She currently has nine part-time employees, several of whom are high school students and exempt under the minimum wage law.
Vermont's current minimum wage of $9.60 per hour went into effect Jan. 1, with future increases scheduled in January 2017 to $10 per hour, and in January 2018 to $10.50 per hour.
The state's current tipped minimum wage is $4.80 an hour with future increases to $5 in January 2017 and $5.25 in January 2018.
High school students, nonprofit and government employees, taxi drivers, and agricultural and domestic workers are exempt from the minimum wage law.
The new minimum wage will be indexed to inflation in the years ahead.
Vermont was one of the first to answer President Obama's call for states to bypass Congress and raise the minimum wage. Vermont has one of the highest wages in the country.
"I was proud to sign this law and I am pleased to see the minimum wage rise once again next year," said Vermont Gov. Peter Shumlin. "Giving a boost to hard working Vermonters is not only the right thing to do. It is also good for our economy as a whole."
Windsor Town Manager Tom Marsh said the increase in the minimum wage should not have an impact on businesses "one way or another."
"In general, in speaking with local businesses it seems like there is a worker shortage. Stores, factories and restaurants report having problems finding capable people interested in showing up and putting in a day's labor. I don't think the wage change will impact the work habits of those unwilling to work," said Marsh.
Betty Matulonis, owner of Woodbury Florist in Springfield, said that while she is not against higher wages for retail employees, the new minimum wage will put a damper on small businesses.
"I am not for it at all. It will make me probably not hire so much in the future," said Matulonis.
Matulonis, who opened her shop at 400 River St. in 2005, currently has one full-time employee, four part-timers, and one high school student worker.
During the summer, she will add two or three part-time employees, she said.
"It's not a high-paying industry," said Matulonis. "As minimum wage people go up, it is only fair that my other people go up [as well]. That is what [the state] fails to recognize.
"It's not that I don't want people to make more money, but it makes it difficult. It's a struggling industry as it is. It makes me hesitant [to hire]," she continued.
Lori Brown, owner of Boccaccio's beauty salon with two locations, one in Bellows Falls, the other in Springfield, said she supports the new minimum wage increase.
"I think it should be a minimum wage of $10. Have you tried living on $9.60? I don't see what difference 45 cents an hour will make to any employer, but that's my opinion," said Brown, who has 10 full-time employees.
According to the Vermont Department of Labor, since the minimum wage law went into effect a year ago, Vermont employers have added 3,200 jobs.
Exactly Lori... Makes me hesitant to do business with those that frown on the increase.
ReplyDeleteI can't imagine they are "frowning" because the employees don't deserve it. It puts an additional expense on the small business owner and they have to figure out how to pay for it. In order to cover additional expenses, they will need to raise prices. Hopefully customers will understand higher costs = higher prices and continue to shop local whenever possible.
DeleteVermont's mom and pop stores and other small businesses are poorly served by the retail sector lobbyists in Montpelier. If they get organized to lobby for a graduated payroll tax to fund health care for their families and their employees, they would save far more than the 45-cent-an-hour pay raise.
ReplyDelete$0.45 per hour for a 8 hour shift comes to a whopping $3.60/day increase in labor cost - and store owners are screaming. Wow, just wow.
ReplyDeleteLots of small store owners are under horrendous stress simply because of how the big boys have skewed the system. Wal-Mart is notorious for destroying downtowns with its low prices (selling products made in China), then jacking prices up while at the same time screwing its employees so badly that the average Wal-Mart costs taxpayers $950,000 in safety net support-- food, shelter and tax credits.
DeleteOur small business entrepreneurs would have a lot less reason to moan if they knew they could count on $950,000 annually to help their payroll and their profits!
They can't count on the business lobby in Montpelier to serve them; they're small fry. It's time we leveled the playing field.
You are correct 8:34, $0.45 per hour for an $8 hour shift is $3.60/day. However, say you have 4 employees = $14.40/day. multiply that by 5 days = $72/wk which will equal about $312/month or $3744/yr. Not so "small" anymore, huh? Then another level- say this is a retail store and you are open 7 days per week, now you are talking for those 4 employees $100.80 per week, about $436/month and up to $5241/yr. I for one am not sure yet which side I lean toward but I do know $5200 plus any other expenses makes quite the dent.
ReplyDeleteAdd to that employment and worker's comp costs.....
DeleteWhich actually proves my point. If you have 4 full time employees who are making minimum wage, you've obviously got a somewhat sizeable business. If that business is really damaged by an additional $312/month, then your business is already in trouble - regardless of what the minimum wage is. Yes, small business is hurting, but it's not the $8-9/hour minimum wage that is the root cause.
DeleteIt should be $15.00 an hour today. So many honest people need just that little nudge to get away from social services. I do not know for certain but I have a feeling that every dollar the minimum wage goes up would be less than the cost of the services provided to those who are so close to making it on their own.
ReplyDeleteLooking at Seattle statistics, their minimum is $15.00 and hour, and the trend there now is that employees are asking for reduced hours of work, so that they may still qualify for the handouts
Deletehttp://www.iwf.org/blog/2797717/Minimum-Wage-Hike-Backfire:-Some-Seattle-Workers-Asking-to-Have-Their-Hours-Cut-
The fallacy of your query is that when the minimum wage goes up, the taxes utilized to provide the social services you allude to NEVER GO DOWN. Therefore, the business remains in a vice that simply grows tighter and tighter, eventually crushing its very viability.
DeleteLivable wage in Windsor County (http://livingwage.mit.edu/counties/50027):
ReplyDeleteOne adult: $10.88/ hour
1 adult, one child: $22.04
1 adult, 2 children: $26.82
1 adult, 3 children: $33.73
2 adults, (1 working): $16.57
2 adults (1 working), 1 child: $20.19
2 adults (1 working), 2 children: $22.72
2 adults (1 working), 3 children: $25.11
2 adults, both working: $8.29
2 working adults, 1 child: $12.13
2 working adults, 2 children: $14.74
2 working adults, 3 children: $17.28
Half the wage earners in Springfield in 2013 made less than $15.37 an hour.
In 2013,the average hourly income of people earning less than $15 per hour in Springfield was $1.86; yes, one dollar and eighty-six cents. The median income for the 2,075 tax filers earning less than $30,000 was in the range of $6.50 per hour.
What does it mean when fully half of a town's taxpayers are averaging $1.86 an hour?
This is the sort of thing our Planning Commission should be dealing with.
Chuck did you take your meds today? Half of the towns people making $1.86? Do you think that anyone will fall for that?
DeleteFor some reason my explanation of the computation of that $1.86 an hour did not make it past the censor. Is Debbie Wasserman Schulz running this blog?
ReplyDelete$1.86 is the result you get when you divide the total AGI reported by the state for the bottom 50% of Springfield's population by their number and the hypothetical 2000 hours per week we expect all red-blooded Americans to work. I am glad that at least one reader picked up on my example of the fallacy of accepting the "average."
The average income will always be higher than the median income. It can't be lower, and if they're the same,then everybody is earning the same amount. The bigger the spread between the two, the more
skewed the income distribution is. Here's an example:
Bill Gates,worth $40 billion, walks into a bar containing 39 penniless drunks. Upon seeing him enter, one of the drunks cheers,"We're rich boys! Our average net worth is a billion dollars!"
The fact is, we could be doing much better if we got smart and started protecting our economic base. You can start by viewing "The Big Short," playing at the theater this week. Then we can deploy the needed defenses.
Thanks Chuck,based on what I have heard everyone should see the "The Big Short"
ReplyDeleteSee that movie and then ask yourself, "What does my preferred candidate think about Wall Street?"
Delete