By Bruce Parker | For Vermont Watchdog
MONTPELIER, Vt. – The decision on whether to hike Vermont’s minimum wages may come down to whom lawmakers trust the most: hometown heroes Ben and Jerry, or Vermont’s grocers.
At a recent gathering at the Capitol, Ben & Jerry’s co-founder Ben Cohen endorsed H.552, which would raise Vermont’s minimum wage from $8.73 to $12.50.
“When we allow huge corporations that are doing business in our state to pay poverty wages, and we end up having to have our state and the federal government make up the difference, and essentially subsidize these huge corporations that are making incredible profits, I think it’s criminal,” Cohen said.
Speaking to a crowd of enthusiastic supporters, Cohen said that while industries hit by a higher cost of labor might have to raise prices, a minimum wage increase was otherwise “not going to affect their businesses.”
A nonpartisan legislative report accompanying H.552 reached a different conclusion.
The recently released report stated that a $12.50 minimum wage “has serious drawbacks that limit its efficacy in achieving the overall objective of improving the well-being of low-wage, working Vermonters and their families.”
It further warned that raising the wage to $12.50 would cause job losses and “precipitous state and federal public benefit reductions” for workers.
“Minimum wage increases that even approach an average livable wage would result in significantly fewer jobs for low wage workers,” the report said.
Jim Harrison, president of the Vermont Grocers’ Association, echoed those claims in comments made to Watchdog.
“Labor is the largest single cost in the retail business, and there’s no magic,” Harrison said. “Food margins are very slim — they’re in the neighborhood of 1 percent to 1.5 percent after all expenses, and the only way to get that money back is either not give raises or benefits that you do to your full-time employees, or cut jobs or hours, or increase prices. None of those scenarios is very attractive.”
As a leader in corporate social responsibility over the years, Ben & Jerry’s has led by example. The company offers full-time workers a starting wage of $16.13 an hour. However, relative to the grocery, retail, and restaurant industries, the ice cream business has few low-wage employees, making even a steep minimum wage hike of no real impact on costs.
A look at how the minimum wage would affect Ben & Jerry’s scoop shops is revealing.
In a written statement to Watchdog, Sean Greenwood, director of public relations at Ben & Jerry’s, said that the company “starts its non-full-time scoopers at $9.73 … and pays full-time scoopers — those who work approximately 40 hours per week — a livable wage of $16.13.”
How many full-time scoopers work for Ben & Jerry’s in Vermont?
The company owns just three scoop shops in Vermont. In calls made to Ben & Jerry’s parlors across the state, Watchdog learned that one scoop shop in Burlington has about a dozen scoopers — one works full time and thus is eligible for the $16.13 livable wage. The Rutland store has just five scoopers — only one works full time.
Unlike the situation at Ben & Jerry’s, businesses with hundreds of low-wage workers could experience significant costs from a wage hike.
Harrison argues that the state’s grocers stand to lose the most if the Legislature approves H.552.
“Our members are retailers — they’re open seven days a week, 365 days a year in some cases, and they employ a lot of part-timers to supplement their full-time workforce. The minimum wage disproportionately impacts the service sector just because we have a lot of part time employees,” he said.
When asked about Ben Cohen and Jerry Greenfield’s high-profile advocacy of Vermont’s minimum wage hike, Harrison remarked, “It’s Cohen and Jerry Greenfield. They’re private citizens, and they’re entitled to say their peace. But you know they wouldn’t have survived at a $12.50 minimum wage when they were running a scoop shop.”