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Vermont minimum wage will increase in January but hasn’t kept pace with living wage demands

Beginning on Jan. 1, Vermont’s minimum wage will increase from $12.55 to $13.18 per hour. Photo by Pixabay via Pexels

Vermont’s minimum wage will increase by 63 cents per hour on the first day of 2023, the Vermont Department of Labor announced this week.

But even with the bump up from $12.55 to $13.18 per hour, the new minimum wage will fall short of what state analysts consider to be a living wage in Vermont.

For an employee earning minimum wage and working a standard 40-hour week, the increase will amount to an additional $25.20 per week before taxes and roughly $1,310 per year, barring any unpaid time off.

Tipped workers in Vermont, such as restaurant servers, will also see a bump in their hourly minimum wage — which is half of the standard minimum wage — from $6.28 to $6.59 per hour, not including tips.

Vermont’s minimum wage has gradually scaled up over the years due to a law passed by the Legislature in 2020, at which point the minimum wage was $10.96 per hour. The law established the first two increases, up to $11.75 in January 2021 and $12.55 in January 2022.

For subsequent years, including 2023, it calls on the state to calculate the minimum wage in proportion to the Consumer Price Index.

According to the state’s most recent “Basic Needs Budget and Livable Wage” report, a living wage in Vermont for those with a partner and no children was $13.39 per hour in 2020. It was much higher for those with different family configurations. For example, a single parent with two children living in Chittenden County would have had to earn $41.78 an hour that year to make ends meet.

The Vermont Legislative Joint Fiscal Office releases the report every two years, calculating how much Vermonters would need to earn every hour in order to meet their basic financial needs. 

The office doesn’t expect to release its updated livable wage calculations until the new year. But Daniel Dickerson, a senior fiscal analyst with the office, told VTDigger via email on Wednesday that, based on preliminary numbers, he expects “the livable wage will most likely be increasing the most that it has in several report cycles, which isn’t a stretch given inflation.”

The federal minimum wage is $7.25 per hour.

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