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Vermont's minimum wage to be highest in the U.S.

Vermont is on track to have the highest minimum wage of any state, after its lawmakers passed a bill to boost the baseline hourly rate to $10.50 an hour.

Gov. Peter Shumlin, a Democrat, said he "will be proud to sign" the legislation into law, according to a post on his Facebook page. That puts Vermont ahead of President Obama's plan to raise the federal minimum wage to $10.10 an hour, up from $7.25 an hour currently.

Vermont is far from the first state to raise its minimum wage, with six other states already boosting their baseline wages this year. Hawaii, Maryland and Connecticut have each established $10.10 per-hour baseline pay. While some critics of Obama's proposal say it will cause employers to cut jobs and raise prices, Vermont has already offered something of a laboratory experiment: The state's current minimum wage is $8.73 per hour, 20 percent higher than the federal level.

"Vermont has one of the highest minimum wage laws on the books, and guess what? In terms of our unemployment rate, we're one of the lowest," said Senator Bernie Sanders (I-Vt.) said on the Ed Schultz show Wednesday afternoon.

The state's unemployment rate stood at 3.4 percent in March, compared with 6.7 percent for the nation during the same month. One of Vermont's goals is to help employers with their concerns about finding workers, according to an April statement by Annie Noonan, the state's labor commissioner.

While no Vermont state senators opposed the legislation, they did discuss how much of a hike employers could digest, the Burlington Free Press noted. Some pointed out that small, local stores might have a difficult time handling a big increase. The law will raise the state's baseline wage to $9.15 an hour next year, and then increase it in small amounts through 2018.

Despite the debate at the federal level, more than three-quarters of Americans say they support a higher minimum wage, according to a November poll from Gallup. Small businesses, Gallup found, are split down the middle on the issue.

A major criticism of the current federal minimum wage is that it allows big retailers and other chains, such as Wal-Mart (WMT) and McDonald's (MCD), to employ workers for what often amounts to poverty-level wages, while the corporations rack up millions in profits. Many of those workers then rely on government aid, such as food stamps, to help subsidize their low incomes.

"You don't want people working 40 hours a week and living in poverty," Sanders said. "We understand when you put disposable income in the hands of working people, they will spend that money in their communities, and that creates more jobs."

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