Recap of minimum wage legislation
As we all watch the news of the coronavirus consume most of the news time, let us all continue to do the smart things needed to protect ourselves and those around us. At the bottom of this and in coming communications, you will find the best websites we can find for the ways for people and businesses to get through this.
In the coming weeks, I will address in greater depth the major issues that we dealt with this session.
A majority of the House and Senate agreed to raise the state’s minimum wage to $12 over the next several years.
The legislation would increase the wage to $9.50 an hour on January 1, 2021, $11 in 2022 and $12 in 2023. It also calls for a study of a regional minimum wage, which we in the Senate had advocated. After that study, lawmakers would vote in 2024 whether to continue increasing the wage to $13.50 in 2025 and $15 in 2026. If lawmakers do not vote to continue increases, the state would automatically begin increasing the wage annually to account for inflation.
Many Democrats, particularly in Northern Virginia, ran on increasing the minimum wage to $15 an hour. They were forced to accept this more reasoned approach.
The legislation, as passed, strikes existing exemptions for employers from paying minimum wage to domestic workers, home health care workers, pieceworkers, and people with disabilities. It retains exemptions for agricultural workers, student workers, au pairs, and temporary foreign workers. It also allows employers to pay workers less who are enrolled in on-the-job training for a maximum of 90 days.
The legislation was opposed by nearly every major business group in the state and every Republican in both chambers voted against it, arguing it would harm businesses, force prices to rise, and make it harder for students to find first jobs.
This increase sounds like it is being nice to workers but it shows the lack of understanding several things.
First, they do not understand what it takes to start and operate a business. They appear to believe businesses operate to hire employees. The fact is that it works the exact opposite. Businesses hire employees to better grow their business. Each business must find a balance between the various needs of that business that include customer service and making a profit.
Second, they know little about Virginia as a whole. They believe that the entire state is similar to their part of the state. Currently, in Northern Virginia, a business would need to pay in the range of $15 an hour to find the people needed to maintain a business. In Richmond and Tidewater, the figure is closer to $12 an hour. They do not understand that many local businesses in most of the state cannot absorb higher costs to do business.
Third, they seem to not understand that payroll is one of the most important factors in our economy. Raising pay while not increasing productivity drives inflation. Therefore, the increases in pay will increase the cost of everything that one does. A few additional cents here, there, and everywhere will leave employees no better off. The only benefactors will be government, which is financed by a percentage of income taxes and a percentage of sales taxes.
Fourth, most of us started out in jobs that paid minimum wages. We learned skills needed to better ourselves and make us better employees in our lives. Requiring employers to pay more means fewer employers are going to take a risk on unskilled individuals. Statewide, of those over 24 years old, only 3% of workers make the current minimum wage.
Last, they seem to believe government is smarter and cares more for employees than those employers who work beside them. In light of the virus and these new costs, businesses will close.
The House had passed legislation which would have taken the minimum wage to $15 an hour in 2026 with no intermediary votes. But the Senate, where Democrats hold a narrower 21-19 majority, had pushed an approach that would have halted statewide increases at $11.50 an hour, with smaller increases after that made on a regional basis tied to average household incomes.
Here are some websites that you can visit for updates on COVID-19.
Virginia Department of Health: http://www.vdh.virginia.gov/coronavirus/
United States Centers for Disease Control and Prevention: https://www.cdc.gov/coronavirus/2019-nCoV/index.html.
The Small Business Administration: https://www.sba.gov/disaster-assistance/coronavirus-covid-19.
Frank Ruff Jr. represents Charlotte in the state Senate. His email address is Sen.Ruff@verizon.net.