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Recession Could Delay Virginia Minimum Wage Increase

Woman holds up fist lobbying outside Capitol for minimum wage increase
A worker affiliated with SEIU petitions for raising Virginia's minimum wage last year. (Ben Paviour/VPM News)

Business groups and Virginia’s cities and counties are asking Gov. Ralph Northam to hit pause on a proposed minimum wage hike. Advocates, meanwhile, argue it’s more timely than ever.

It’s still unclear whether Northam is willing to walk back one of Democratic lawmakers’ proudest achievements in the face of economic headwinds.

Asked about the bill’s status on Friday, Secretary of Finance Aubrey Layne didn’t rule out changes.

“Everything is on the table,” he told VPM.

The proposal would raise the minimum wage to $9.50 an hour in January and eventually hike it to $12 an hour in 2023. Lawmakers could then decide whether to continue increasing it to $15 an hour. Northam could choose to amend the bill or veto it outright ahead of an April 22 reconvened session.

On Tuesday, the Coalition for a Strong Virginia Economy , which includes chambers of commerce and various interest groups, sent Northam a letter urging him to delay the increase a year, among other requests. Business groups largely lobbied against any increase during the legislative session, and the situation has become more dire since then, argued Nicole Riley, state director of the National Federation of Independent Business.

“We've seen a lot of our members lay off workers or shut their doors,” Riley said.

That follows a March 26 letter from the Virginia Municipal League asking Northam to delay the implementation of the minimum wage hike, an unrelated collective bargaining bill, and a handful of other legislation in the face of a likely steep drop in tax collections.

Localities will face cascading pressure to increase all wages, not just lower-end ones, said Neal Menkes, a consultant with VML.

“All the sudden the new guy who is hired for the job is making more than the guy who has been there five to 10 years,” he said.

Virginia’s current minimum wage sits at $7.25, where it’s been since 2009.

Advocates for the wage hike say front-line workers like grocery store employees deserve a pay boost now more than ever.

The pay raise would benefit over 45,000 healthcare workers, over 100,000 restaurant and food workers, and another 100,000 retail store workers, including those at grocery stores and pharmacies, according to one analysis from the Commonwealth Institute for Fiscal Analysis.

Overall, the Institute found that over 400,000 workers would benefit from next year’s raise, and almost double that would benefit by 2023.

“Because low wage workers are more likely to spend extra income on living expenses, that’s really good for businesses and for the economy overall,” said Phil Hernandez, senior policy analyst at the institute.

Kristy Vance, an employee at a Kroger in Blacksburg and shop steward for UFCW 400, phrased it slightly differently.

“I was once told, you give a rich man a dollar, he puts it in his pocket because he can,” Vance said. “You give a poor man a dollar, he spends it because he has to.”

Vance said she now makes about $15 per hour after over 20 years of working for Kroger. Even that salary barely sustains her family and her hour and fifteen commute, Vance said. 

“They need to look at giving us hazard pay,” Vance said. “Because if it wasn't for use, they wouldn't be open anyway.”