To Danville business owner Shelley Blackwell, more than doubling the minimum wage is a bad idea.
“Paying $15 an hour would be impossible for my business, with taxes and overhead and insurance,” said Blackwell, owner of Chestnut Lane Antiques & Interiors on Main Street downtown. “It just all starts adding up.”
Blackwell, who has two part-time employees at her home decor business, said she would have to cut back store hours.
State lawmakers are moving toward possibly raising Virginia’s current minimum wage of $7.25 per hour, which also has been the federal minimum wage since July 24, 2009.
The House of Delegates passed a bill that would increase the minimum wage to $15 per hour by 2025, while the Senate has approved a version to raise it to $11.50 on July 1, 2023, and then use a system based on a regions’ median household income to increase wages in the future.
The head of the Virginia Chamber of Commerce opposes a $15-per-hour minimum wage and said lawmakers should instead focus on education and job-training to enhance work-skills.
“While we want every Virginian to be successful and make above the minimum wage, the unintended consequences of more than doubling the minimum wage ... would have a devastating impact on small businesses across the Commonwealth,” Virginia Chamber President and CEO Barry DuVal wrote via email this week. “Instead, our legislators should advance solutions that encourage quality education and job-skills obtainment, which will do more to increase the earning power of individuals than mandated pay increases that would smother small business across the Commonwealth.”
Virginia is one of 16 states, plus Puerto Rico, that has a minimum wage equal to the federal minimum, according to the U.S. Department of Labor. There are 29 states, plus the District of Columbia, Guam and the Virgin Islands, with a base rate higher than the federal minimum. Five states have no set minimum wage, so the base rates there default to the federal standard.
The District of Columbia has the nation’s highest minimum wage — $14 per hour.
Some states mandate varying base rates tied to the number of employees or the business’ annual revenue.
California, for example, requires an hourly base rate of $12 for businesses with 25 or fewer employees and $13 for businesses with more employees.
Minnesota, on the other hand, sets the hourly base rate at $8.15 for companies with annual revenues of $500,000 or less and requires an hourly wage of at least $10 for employers with greater annual revenues.
DuVal, in a telephone interview, said doubling Virginia’s minimum wage would leave some business owners with few options: “For small businesses, they would have to choose between paying the rent or letting people go.”
The chamber acknowledges the current minimum wage is not a livable wage, he added. However, just 2.2% of all hourly wage employees across the country make the federal minimum wage or less, DuVal said. That figure is 2.8% in Virginia, he said.
About half of all minimum wage workers are 25 or younger.
Of the two bills in the General Assembly, the minimum wage bill in the Senate would be the “least impactful,” he added.
A study released by the Congressional Budget Office in 2019 found $10.10 per hour would do the least harm to the business community and economic climate, DuVal pointed out.
Blackwell said she would not have a problem with the minimum wage increasing to $10 per hour.
A $15 wage might be competitive in Northern Virginia, but it could mean the elimination of jobs in the Southside, said Rick Barker, a Danville developer and business owner.
“If the labor costs go up dramatically at your business, you won’t be able to pass those costs down,” Barker said. “We’ll have to eliminate jobs.”
Barker owns several businesses, including Mucho Taqueria and Tequileria and The Garage Artisan Smoked Meats in the River District, which have about 25 part-time and full-time employees. He also owns Supply Resources Inc., Lynchburg Public Warehouse and Rick Barker Properties.
DuVal agreed that regional differences in the state would mean a much more detrimental effect in some areas.
“If the majority are determined to raise the minimum wage, do so with the regional approach in mind,” DuVal said. “We really want to protect all regions, but small metro and rural Virginia would be adversely affected would they adopt a one-size-fits-all approach to the minimum wage.”
Leisa Royster, owner of Main Street Coffee Emporium on Main Street downtown, was blunt in her assessment of what would happen to her business with a $15 minimum wage.
“It would spell disaster,” Royster said at her bustling business. “Where is the additional income for the business supposed to come from to offset this?”
Royster added, however, she wants employees to have a fair wage. Main Street Coffee Emporium has six full-time and part-time workers.
One employee, Jonathan Shelton, has worked at Royster’s business for almost three years. He expressed doubts about the feasibility of a $15-per-hour wage.
“Some increase might be helpful, but it’s a dramatic change,” Shelton said.
George Perdue, owner of Revitalization Station on Craghead Street, said such a drastic wage hike would place too much of a burden on small businesses.
“It would put a big strain on the small businesses and take away the ability to reward performance,” said Perdue, who has four part-time and full-time employees. “It would probably mean less people being employed.”
Crane reports for the Register & Bee. He can be reached at (434) 791-7987.