Virginia’s minimum wage is going up to $9.25 an hour on May 1. The change is the result of 2020 legislation, part of several pro-worker changes initiated by the Democrat-controlled General Assembly in 2020 and 2021. Advocates say the change will boost the economy by enabling more people to pay rent and spend money in Virginia businesses. But opponents say the increase violates free-market principles and will harm employers who have to increase their hourly compensation while dealing with a COVID-19 economy.
“This is not the time to burden small business owners with more government mandates,” National Federation of Independent Business (NFIB) Virginia State Director Nicole Riley, said in a press release Thursday.
The legislation includes incremental increases in the minimum wage over the next few years — to $11 an hour January 1, 2022 and $12 an hour January 1, 2023. A study and a re-enactment bill must be completed by 2024 to continue with increases of $13.50 an hour January 1, 2025, and $15 an hour on January 1, 2026. Currently, Virginia’s minimum wage matches the federal minimum wage of $7.25, making the new wage a 31 percent increase.
In a recent video, Virginia Beach lawyer Tim Anderson said a shortage of workers is already naturally driving wages up, citing $15-an-hour starting wages at Target as evidence of businesses naturally responding to the job market. He said, “That’s called the free market. We don’t need a minimum wage.”
“We don’t need $7.25 an hour. We don’t need $9.50 an hour because the market is adjusting correctly based upon the demand of what they need and the supply of what’s in the workforce,” Anderson added, “Let the market decide. That’s how it needs to be.”
“A $15 minimum wage would hurt Virginia small business owners most impacted by COVID-19 restrictions,” Riley said in the press release. “Not to mention that rural Virginia small businesses would be burdened with higher wages that don’t match the cost of living. You can’t compare big business to small business. Big business has the profits and revenues to cushion the blow. Meanwhile, small business owners are simply trying to survive and can’t afford additional costs.”
“Those cost increases would force small businesses owners to cut back on expenses such as less hours for workers – or even close their doors,” the press release states.
Virginia Interfaith Center Executive Director Kim Bobo told The Virginia Star that although a sudden increase to $15 an hour could potentially harm businesses, the change to $9.25 is a moderate change.
She said, “We’re not going from $7.25 to $15 this year. It’s a modest increase.”
She said that historically, modest minimum wage increases haven’t led to job losses. According to Bobo, about 200,000 Virginians earn between $7.25 an hour and $9.25 an hour, and another 200,000 are likely to see their wages rise as employers react to the increase. She said that Governor Ralph Northam had delayed the enactment date from January 1, 2021 to May 1 to give businesses extra time to prepare due to COVID-19.
Bobo said the increase would help low-income families pay rent, put food on the table, and lift children out of poverty.
“It’s clearly good for the overall economy and stimulating the economy. When we want to stimulate the economy, what do we do? We put money in hands of lower-income Americans because they don’t save it, they basically spend it,” she said. “This money will go directly into helping stimulate the economy which is clearly good for business,” she said.
Delegate Joe McNamara (R-Roanoke) owns small businesses and is an accountant. He said that Virginia hasn’t properly notified business owners about the pending change.
“We can debate the efficacy of minimum wage increases and how they benefit or hurt entry-level workers, but that is not the point of this post,” McNamara wrote on Facebook. “The issue here is the lack of courtesy for Virginia’s employers — especially small businesses. Many businesses, including mine, already pay their entry-level workers above the current minimum wage, but there are some businesses that will need to adjust their payroll to comply with the new law.”
“The Commonwealth has an obligation to adequately inform its constituency of such changes,” he said. “If you know a business owner, please make sure they are aware that the Virginia minimum wage will increase on May 1.”
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