Vermont governor is right about the negative consequences of raising minimum wage

A bill meant to increase the minimum wage in Vermont was vetoed by the governor after it was passed by the legislature. The bill was intended to raise Vermont’s $10.96 minimum wage to $11.75 in 2021 and $12.55 in 2022.

Governor Phil scott emphasized the negative intended consequences with raising minimum wage, most of which are overlooked by legislature;

Despite S.23’s good intentions, the reality is there are too many unintended consequences and we cannot grow the economy or make Vermont more affordable by arbitrarily forcing wage increases. I believe this legislation would end up hurting the very people it aims to help.

The governor  furthermore listed a variety of concerns about the adverse impact he believes an increased minimum wage would have on the state’s economy, from job losses to a higher cost of goods and services. This is a particular concern for rural parts of the state.

He additionally stated;

From workforce declines to overall economic recovery – or lack thereof – most of the state has simply not kept pace with Northwestern Vermont, particularly Chittenden County. A statewide mandated wage increase would exacerbate this regional economic inequity.

While lower than the desired popular wage, Vermont’s minimum wage is regularly adjusted for inflation. And it is significantly higher than the federal minimum wage. Raising it any further would bring about negative results not different from the ones observed in other states.

While not raising minimum wage might seem anti-poor people, raising minimum wage is actually anti-poor and anti-economic growth in the long run. Enough evidence exists showing that a rise in real wages is caused by a rise in productivity and not by government mandated laws.