With Democrats In Control, Virginia Rushes To Increase Minimum Wage

Updated Jan 28 at 7:40 a.m.

An amended version of Senate Majority Leader Dick Saslaw's (D-Springfield) minimum wage bill cleared the Virginia Senate's Commerce and Labor committee Monday evening.

The current version of the legislation gradually raises Virginia's minimum wage to $15 by 2025, but language introduced by Sen. David Marsden (D-Burke) allows employers to count certain benefits toward the cash wage once the minimum reaches $11.75 in 2022. The bill also authorizes the Virginia Economic Development Partnership to study potential impacts of minimum wages that differ by locality, and allows the Virginia Commissioner of Labor and Industry to halt wage increases if the state sees negative job growth.

The bill moves next to the Senate Finance and Appropriations committee.

Original story continues below.

Democrats won control of the state's legislature for the first time in 26 years in November's election, all but guaranteeing that the Commonwealth will fulfill the party's long-deferred wish to raise the minimum wage above $7.25 per hour as soon as July 1.

The Commonwealth has followed the federal minimum for more than a decade, while neighboring Maryland and D.C. have approved eventual increases to $15. Even West Virginia — whose economy is 14% the size of Virginia's — requires employers with at least six workers to pay $1.50 more per hour.

"Everyone deserves an increase in the minimum wage, full stop," says Del. Mark Levine, a Democrat from Alexandria.

Levine is one of several Democrats supporting a slew of wage bills that, under Republican leadership, would have faced much longer odds in Richmond. There are now seven wage-increase proposals circulating in the House and Senate, with a potpourri of others that would raise wages for inmates, tipped workers and people with intellectual disabilities. Levine is sponsoring a bill that would allow localities to raise wages above the state minimum.

Progressives say it's the kind of left-leaning legislation voters were seeking when they gave Democrats the majority in November.

"[Virginians] were voting on really important issues around, how are we going to invest in our communities and make sure we're building a Virginia for all of us?" says Anna Scholl, executive director of left-wing advocacy group Progress Virginia. "Raising the minimum wage is a key part of that."

A pay increase would put Virginia closer to the estimated living wage for the state, which is currently $12.04 an hour for two working adults with one child, according to MIT's Living Wage Calculator. In Alexandria, it's $16.86; in Richmond, it's $14.39.

Progress Virginia is backing legislation from Del. Jeion Ward, a Hampton Democrat in her ninth term, that would raise the state's minimum wage to $15 by July 2023. In the Senate, Majority Leader Dick Saslaw (D-Springfield) has proposed getting to $15 by 2025, six months after Maryland's $15 minimum wage takes effect for employers with 14 or more workers. Neither Ward nor Saslaw could be reached for comment by publication time.

In previous years, efforts to raise the wage were overcome easily by Republicans who warned of unintended consequences, like killing jobs and losing businesses to states with lower minimum wages. It appeared that Senate Republicans had a change of heart last year when they sent a $15 minimum wage bill to the floor, but the move turned out to be an act of political theater, intended to send a message to a business group that had endorsed a Democrat in Northern Virginia.

"[Maintaining the federal minimum wage] was the political preference of the party that was in charge all of those years," says Sen. David Marsden (D-Burke). "They're no longer in power. We are."

Marsden sits on the Senate's powerful Commerce and Labor committee, chaired by Sen. Saslaw, whose minimum wage bill is up for a hearing Monday. The bill is expected to move to the full Senate, despite likely "no" votes from the committee's three Republicans — Senate Minority Leader Tommy Norment of Williamsburg, Mark Obenshain of Harrisonburg and Stephen Newman of Forest, none of whom could be reached for comment by publication time.

Many Republicans and business groups maintain that Virginia will lose jobs — and its business-friendly reputation — if a wage mandate goes through. The Virginia chapter of the National Federation of Independent Business (NFIB), an influential voice against wage increases in the state, estimates that legislation from Sen. Saslaw and Del. Ward would slash 130,000 jobs in Virginia over 10 years, most of them within small businesses.

"These are going to be are your entry-level jobs that would typically go to young people, maybe in an ice cream shop, scooping ice cream," says Nicole Riley, NFIB's Virginia's state director.

Democrats reject the notion that wage increases will cause job hemorrhages, especially in a state that hasn't seen a raise in more than a decade. A 2019 paper by the National Bureau of Economic Research that analyzed 138 state-level minimum wage increases over 37 years found wage hikes didn't lead to significant job losses. Democrats also contend that many businesses in affluent parts of the state already pay above the federal minimum — they've had little choice, as chain stores have ratcheted up pay, costs of living have increased and unemployment has sunk.

Still, an estimated 15,000 workers in Virginia earned the federal minimum wage in 2007, while 55,000 workers earned less, according to the U.S. Bureau of Labor Statistics. Low-paid workers make up 3.6% of the state's hourly workforce, and most of them are women and people over 20 years old, according to BLS and the left-leaning Commonwealth Institute.

Employers are concerned that raising wages for those workers will push them to raise pay across the board, Riley says.

"If you are now going to be forced to pay an entry-level position $15 an hour, your current employees making $15 to $17 an hour are going to expect a pay increase," Riley says. "They're seeing someone coming off the street with no experience, making the same amount they make."

Pressure on small business could intensify if Democrats also pass mandatory paid leave, Riley says. Plus, other Democratic priorities like raising taxes on gasoline and tobacco could harm small rural employers, like gas stations and convenience stores, she says.

The potential downsides of a wage increase aren't lost on Virginia Democrats, says Sen. Marsden.

"Is it going to be smooth and create no problems and everybody's going to be happy with it? No. It's going to create some problems," Marsden says. "But at the same time, how can you not act? People need to be able to support their families."