RICHMOND, Va. (WRIC)- Virginia’s first minimum wage increase in more than a decade takes effect on Saturday, May 1.
The new rate will be $9.50 per hour. That’s up from $7.25, a baseline mandated by the federal government in 2009.
The boost is the first of three incremental increases approved by the Virginia General Assembly last year. Come Jan. 1, 2022, the state’s minimum wage will rise to $11 per hour. The last phase will kick in on Jan. 1, 2023, making the rate $12 per hour.
The change was made possible when Democrats took control of the state legislature in 2020. It comes as some Democrats in Congress are vying for a mandatory $15 per hour minimum wage nationwide, something more moderate members of the party in Virginia blocked during the 2020 session.
“It was hard enough to get where we are right now and you have to make sure you have the votes to get it done. There was a lot of apprehension,” Del. Jeion Ward (D-Hampton) told 8News in an interview on Friday.
Ward said the current plan is to vote again on a $15 minimum wage in the 2026 session after a study has been completed. She said the study is evaluating the impact on businesses and examining the possibility of regional rates that will take into account variations in cost of living.
Despite objections from Ward, lawmakers decided to delay the increase to $9.50 per hour to relieve pressure on small businesses at the beginning of the coronavirus pandemic.
As many businesses continue to struggle, the May 1st effective date is facing backlash from the National Federation of Independent Business.
“That could very much be a breaking point for a lot of small business owners,” said NFIB State Director Nicole Riley. “They very likely won’t hire back as many people as they’ve had to lay off or furlough because of the pandemic. You’ll see them cut hours.”
Liz Kincaid, who co-owns four restaurants in Richmond, supports the minimum wage increase.
“It’s unfortunate timing but I think it is necessary and overdue,” she said.
Despite more than a year of revenue loss, Kincaid said they’re hoping to increase their entry-level wage to $15 per hour in the near future, something she says is necessary during an industry-wide labor shortage.
“The hospitality industry right now is so competitive so I think most restaurants are offering well above what the minimum wage increase is going to be,” Kincaid said.
Buz Grossberg, the owner of Buz and Ned’s Real Barbecue, agrees.
“It is incredibly difficult to think about living off of a minimum wage without having a second or a third job,” Grossberg said. “It’s needed. It’s not going to hurt anybody.”
Grossberg said higher wages have helped him reduce turnover and retain loyal employees.
While he acknowledges that a new minimum will come with new costs, Grossberg said it will also level the playing field.
“Everyone has to increase their wages. Therefore, people are going to have to increase their pricing,” Grossberg said.
While Ward considers the new law to be a significant accomplishment, it didn’t go as far as she had hoped. She said it excludes tip workers, as well as farm workers.
Ward proposed a bill in the 2021 session that would’ve included farm workers but the idea was rejected once again.
“That broke my heart,” Ward said. “But I’ll be back.”