$15/hour minimum wage in Virginia? The consequences for rural businesses

‘That’s going to be a very hard pill to swallow’

ROANOKE, Va. – Two separate bills proposed in the Virginia General Assembly would raise the minimum wage for workers to $15 per hour over the next three to five years starting July 1. That’s more than double the current hourly wage, $7.25, which is the federal minimum. However, the implications on businesses in southwest or central parts of the Commonwealth could be significant.

The move is a priority for the Democratic-held legislature.

“Clearly, wages are stagnant in this country. Clearly, buying power has been reduced in this country. We need to make sure that as people’s expenses continue to increase, that we also look at making sure that their income is going to be co-measured with that," said Delegate Chris Hurst (D).

Republicans, on the other hand, said the bills could hurt the underdogs.

“It’s going to drive business away, unemployment up,” said State Sen. Bill Stanley (R). “What we’re talking about here is going to be hard on our small businesses, to where they’re going to have to let some people go to make it fit and to manage that financial burden within the confines of their own budgets.”

Dr. Alice Kassens, the John S. Shannon Professor of Economics at Roanoke College, said the bills are meant to improve quality of life and increase productivity but they could have the opposite effect in rural Virginia where wages tend to be lower than other parts of the commonwealth closer to Washington D.C.

“Even though they’re aimed at helping people that are making lower wages, those are the people that end up losing their jobs," Kassens said.

The bills -- House Bill 395 and Senate Bill 7 -- would not apply to small or family-owned businesses with less than four employees, teenagers, and several other exceptions.

Kassens said if companies can’t cut costs elsewhere, employers may cut hours, make layoffs or have to shut down business altogether. Higher wages would also attract more job seekers, in turn, raising the unemployment rate. And skilled or experienced workers would likely ask for pay raises

If the bills are passed in a still-growing economy, Kassens said businesses may not feel the effects right away but when a recession eventually hits, it could hit hard.

“If employers are paying minimum wage, that’s going to be a very hard pill to swallow," Kassens said.

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