On Saturday, some workers across the state clocked in like usual, but their paycheck will be bigger come payday.
The state’s minimum wage increased from the federally mandated level of $7.25 an hour to $9.50 an hour on May 1 due to a law passed by the General Assembly last year.
Also under the law, the minimum wage will increase to $11 an hour in January and to $12 in 2023. Further increases in 2025 and 2026 to $15 an hour are dependent on General Assembly action, according to the Virginia Legislative Information System.
If no further action is taken by July 1, 2024, the minimum wage becomes pegged to increase along with the consumer price index on Jan. 1, 2025.
The minimum wage becomes pegged to the consumer price index in 2027 if legislators take action by July 2024 to increase the minimum wage for 2025 and 2026.
The expansion of the minimum wage also includes people who had not been covered by the minimum wage previously, according to according to Wendy Ige, director of the Division of Labor and Employment Law at the Virginia Department of Labor and Industry. Such workers include butlers and domestic service workers and home care providers.
Some exemptions to the minimum wage increase remain, including farm laborers or employees, religious volunteers, golf caddies, traveling salespersons, cabbies, those under 18 working for their parents or guardians, prisoners, summer camp workers, babysitters working for less than 10 hours a week and anyone younger than 16, according to the Virginia Law Library.
However, many of the jobs that previously paid minimum wage are having trouble finding workers for less than $10 an hour already, according to multiple employment and economic experts, including Ige.
“We see a lot of folks that are already making above that $9.50 an hour wage across the board in different industries,” she said.
She said the demand for workers is driving up wages.
Ramona Sanders of the Harrisonburg-Rockingham Living Wage Campaign said an increasing number of local employers are speeding up wage increases or raising wages to stay competitive.
“I’m noticing that more and more,” she said.
Del. Tony Wilt, R-Broadway, said the “workers’ market” forcing employers to adjust wages upwards or hire new workers to higher-paying positions makes government wage intervention unnecessary. He said it could lead to potential unforeseen consequences. Wilt, joined by other local representatives, voted against the minimum wage increases in the General Assembly.
“Let that rising tide raise all boats instead of doing it that way,” he said about his favor toward employers competing for workers compared to government intervention.
Though some employers may have lower wages than others, they still may be able attract workers with other benefits that are hard to quantify, such as more flexibility in hours or hard to match camaraderie, he said.
“If there’s a business that still [hasn’t raised wages], there’s probably a reason for it,” Wilt said. “And it’s not because they’re some kind of cruel taskmaster. It’s because that’s all they can afford.”
Another compounding issue, Wilt said, is “wage compression” — when newer or less experienced workers get paid more, the workers with more experience and more responsibilities also want more pay, a cycle that works its way up through the business.
Jay Langston, executive director of the Shenandoah Valley Partnership, also said a sudden increase in the minimum wage could have implications and also spoke about how few companies can find workers for less than $9.50 an hour.
The increased minimum wage also means that if or when the market becomes more favorable to employers than workers again, wages cannot drop back down to $7.25 an hour, according to Langston.
According to the most recent data available from the Bureau of Labor Statistics, only four jobs in the Harrisonburg-Rockingham metro area had a median hourly wage below $9.50 an hour in May of 2020:
• Fast-food cooks — $8.55 an hour
Local employment figure — estimate not released
• Questionnaire interviewers — $9.06 an hour
Local employment figure — 70
• Dining room and cafeteria attendants and bartender helpers — $9.31
Local employment figure — 330
• Hosts and hostesses at restaurants, lounges and coffee shops — $9.42
Local employment figure — 160
Jobs in preparing and serving food are in the lowest paid occupational group, and workers of these positions had a median wage of $24,220 in May 2019, according to BLS data. Growth in such restaurant jobs has been outpacing growth in higher-earning jobs in the city, according to a comprehensive housing study.
Langston also said January’s increase in pay to $11 an hour will also likely not affect too many employers.
“Thankfully, our employers in this region have been playing well over the minimum wage,” he said.
The median hourly income for the 61,780 workers in Harrisonburg and Rockingham was $17.98 an hour in May 2020, according to BLS data.
“Market supply and demand has already dictated that you’re not going to really retain anybody at the minimum wage for any length of time, so you need to be competitive,” Langston said.