The first of three minimum wage increases approved by Virginia lawmakers will take effect Saturday, guaranteeing the state’s lowest paid workers an hourly rate of $9.50 an hour.
While some businesses warned the hikes will force them to layoff workers and cut hours, low-wage employees celebrated the coming raises.
“I just feel like we deserve it,” said Jenee Long, who until recently was paid just over the current minimum of $7.25 an hour making sandwiches at a Subway franchise in Richmond. “Luckily, I had family to take care of me, because how would I pay rent?”
The last minimum wage increase in Virginia came courtesy of the federal government more than a decade ago in 2009, when Congress raised the wage floor to $7.25.
While 29 states and the District of Columbia have opted to raise their state minimum above the federal minimum, the idea was a nonstarter in Virginia until 2020, when Democrats took majorities in the General Assembly for the first time in more than 20 years.
Last year the party adopted a phased plan that includes a second increase to $11 an hour on Jan. 1, 2022, before rising again to $12 an hour in 2023. At that point, lawmakers said they would study the impact and decide whether further increases are warranted.
The decision was unanimously opposed by Republicans and some of the state’s largest business groups, which warn that it will have the biggest impact on restaurant, retail and entertainment industries that were hardest hit by the COVID-19 pandemic.
“Small business owners are simply trying to survive and can’t afford additional costs,” said Nicole Riley, who leads the Virginia chapter of the National Federation for Independent Businesses.
She cautioned that while the number of employees who are paid at the federal minimum is relatively small — federal statistics put the number at about 15,000 in Virginia — it could force employers to raise wages for all workers.
“That’s something that kind of gets lost, when you raise that floor — it puts a lot of pressure for you to raise it for all your employees,” she said. “I just think folks need to understand small biz owners aren’t made out of money, they have to figure out this increase in labor costs as part of their budget.”
Not all business owners oppose the increase.
Gina Schaefer owns Old Town Ace Hardware in Alexandria and employs 250 people across stores in Virginia, D.C., and Maryland. A member of the group Business for a Fair Minimum Wage, she said her lowest paid employees earn at least $15 an hour.
“For the past eight years, we have paid our folks in Virginia much higher than the Virginia minimum wage and I’m still in business,” she said.
Her motivation is twofold. First, she said she wants her employees to have better lives. Second, the more people earn, the more they can afford to spend at her and other businesses.
“It’s easy as a boss to say I want to pay as cheaply as possible so I can make as much money as possible, but I don’t think as humans we can do that,” she said. “We have a responsibility to help create better communities.”
Back in Richmond, Long quit her job at Subway and now earns about $10 an hour working at a clothing retailer. She said that while the bump this week won’t change her paycheck, the Jan. 1 increase to $11 an hour will. She’s looking forward to it.
“People work hard,” she said. “Especially in these retail stores.”