Vermont median household income rises to $85K as minimum wage struggles to keep pace

Vermont's House Ways and Means Committee meeting on January 24, 2025, highlighted significant disparities in income and wage trends affecting families across the state. A key discussion centered on the relationship between the Vermont minimum wage and the basic needs budget, which reflects the cost of living adjusted for inflation.

The committee noted a consistent $4 gap between the Vermont minimum wage and the basic needs budget, indicating that while both have generally tracked together, the minimum wage has not kept pace with the rising costs of living. This gap is particularly concerning for households with children, where the financial strain is more pronounced.

Current data shows that the statewide median household income in Vermont stands at approximately $85,000, a notable increase from $40,000 in 2000. However, this figure does not account for inflation, which significantly impacts purchasing power. The federal poverty level for a single adult with one child is set at $20,000, while those earning the Vermont minimum wage fall just below $30,000, underscoring the challenges many families face in meeting basic needs.

The committee also discussed the stark differences in income levels between urban and rural areas, with urban households experiencing a gap of nearly $45,000 compared to the basic needs budget, while rural households face a $30,000 difference. These disparities highlight the urgent need for policy discussions around wage adjustments and support for low-income families.

As Vermont continues to navigate these economic challenges, the committee's findings emphasize the importance of addressing wage equity and ensuring that all families can meet their basic needs in an increasingly expensive environment. The discussions from this meeting will likely inform future legislative actions aimed at improving the financial stability of Vermont's households.