MIDDLESEX -- A new law that will increase the state's minimum wage to $10.50 an hour by 2018 in a series of increases beginning in two years was signed by Gov. Peter Shumlin on Monday.

"A fair wage"

Shumlin signed the law in front of the Red Hen Bakery, an artisan bread maker that employees about 40 people, most of whom make well over Vermont's current minimum wage of $8.73 an hour, the company's owner said.

The governor said Vermont is one of a number of states that recognizes that working people cannot support families on the minimum wage.

"We are at a time in America's economy where the gap between those who have and those who don't, hard-working families, has never been wider," Shumlin said. "We all know that working families should be paid a fair wage."

The current federal minimum wage of $7.25 an hour is not enough to support a family.

"I don't think there's an American who believes in the greatest economy in the world, in the greatest democracy in the world, that it's fair to work for $7.25, work hard and come home at the end of the week having to live in poverty," he said.

The Legislature agreed on the details of raising the minimum wage in the waning hours of the session that ended last month.

Jim Harrison, the president of the Vermont Retail and Grocers Association, said he thinks the increase will be hard on the retail and service industries, which employ a lot of part-timers.


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"It sounds good, it feels good, we all want to pay more; it's just not as easy as coming to where we want to be and that's a good economy, good employment," Harrison said.

But he said the law that took effect is better than some considered by the Legislature that would have increased the minimum wage faster.

"We know what the steps are. Yes, it's probably going up faster than (the consumer price index) would have. At least we know what the results are and businesses can do their best to plan for them going forward," Harrison said.

Randy George, of the Red Hen Bakery, which hosted the signing and where most employees make at least $10.50 an hour, said he was representing the small business community.

"Anyone who has to buy groceries of keep a roof over their head for themselves or a family knows that these are foolish numbers," George said of both the federal and state minimum wage. For myself as a business owner, if I am going to attract skilled people and keep them we have to exceed that."

The new law calls for increasing the minimum wage to $9.60 in 2016, $10 in 2017 and $10.50 in 2018. The bill also calls for annual raises in the wage -- tied to inflation -- starting in 2019.