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Minimum wage goes up today
An estimated 4.5 million workers nationwide — 200,000 of whom live in Virginia — will see a direct increase in their paychecks, said Kai Filion, a policy analyst for the Economic Policy Institute in Washington, D.C. The statistics are not broken down by county.
Normally, in a healthy economic time, a minimum wage increase is meant to match inflation. It often boosts lower-income workers' spending power, in turn helping the economy.
This hike, however, kicks in during a recession when many businesses are looking to cut corners or trim payrolls.
Companies which employ a lot of minimum wage workers will see their labor expenses rise, which may force some into layoffs, said John McClain, senior fellow at George Mason University's Center for Regional Analysis.
The retail, leisure, hospitality and construction industries employ the most minimum wage workers. These sectors are also suffering the most in the down economy, McClain said.
Companies sensitive to the heightened wages will hesitate to hire full-time workers, opting to take on part-timers until the economy rebounds, McClain said.
Filion said the increase effects only a small number of workers and will not have an effect on employment.
A minimum wage raise often trickles up through a company's price structure. Those workers with more experience may see their paychecks increase to maintain a salary hierarchy, Filion said.
The number of workers who will receive the fatter paycheck remains lower than the number of Virginia unemployed workers — 293,200 as of May 2009, the most current data available from the Virginia Employment Commission.
Contact the writer at hhager@timespapers.com
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