RICHMOND – A Democratic-led Senate panel on Monday essentially killed a proposal by state Sen. Mark Peake, R-Lynchburg, that would have frozen Virginia’s minimum wage at its current rate at $11. The Senate Commerce and Labor Committee voted down Peake’s bill along party lines by 12-3.
“I am bringing this on behalf of a lot of small businesses,” said Peake, whose district includes the city of Lynchburg, but also more rural areas in Amherst, Appomattox, Cumberland, Fluvanna, Goochland, Louisa and Prince Edward counties.
Peake told the panel that while in more populated localities like Lynchburg and Roanoke “nobody is paying $11 anymore,” in rural areas, wage hikes are a real problem. “They don’t have the volume of business, they can’t just raise their rates, they are poor economies and $11 an hour isn’t going to lead to more people making more money, it’s going to lead to more small businesses closing and shutting down,” Peake said, adding that his bill would not impact “any of the areas that you guys represent” – referring to his colleagues from more affluent urban areas – “except for some of the folks that represent some of the very rural and poor areas.”
The General Assembly had voted in 2020 to gradually increase the state’s minimum wage from $7.25 to $9.50, effective Jan. 1, 2021. But then-Gov. Ralph Northam amended the measure to delay the first increase to May 1 of last year — providing employers an additional four months to recover from the economic impact of the COVID-19 pandemic before the law went into effect. The wage then increased to $11 on Jan. 1 and is set to go up once again to $12 in 2023. Further increases to $13.50 in 2025 and $15 in 2026 are contingent on the General Assembly’s enactment by July 1, 2024.
“It was my bill that put the minimum wage where it is now, and it has to go above $12,” said Senate Democratic Majority Leader Dick Saslaw, D-Fairfax, the committee chair and sponsor of the original legislation requiring the incremental increase. “If in 1971 the minimum wage had kept up with the cost of living, it would be a little over $15 an hour today,” Saslaw said Monday.
Sen. David Marsden, D-Fairfax said that he has been introducing minimum wage legislation since shortly after he first came to the Senate in 2010, and that he has since tried to get the rate back to what he called “that magic year of 1968, which was the last time that it’s generally held by a number of people who studied these things that the minimum wage kind of did what it was supposed to do.”
If that 1968 rate was going to be equated to today’s dollars, it would be $12, Marsden said. “It seems to me that one of the original goals I had has been met by the law as it exists right now, to get back at least to 1968. And freezing it at $11 falls short of that goal for me, and for that reason I can’t support this bill,” he told Peake.
Responding to Marsden, Sen. Tommy Norment, R-James City, said that while he had “enormous respect” for his Democratic colleague, “it’s hard to believe he’s been on the wrong side of this issue for so many years.”
Norment said that employee’s perspective on the economy has changed “fairly remarkably” in the last two years since the start of the pandemic. “They find themselves in a position where they are empowered more than they have ever been, and as a result of what has taken place and conversations with a number of you on this committee, the market conditions are dictating that employers pay more, and even where some are offering substantially more they cannot hire people,” Norment said. For the above reasons he would support the wage freeze proposed by Peake, because “the market conditions are driving it even beyond the hallucinations of Senator Marsden.”
But Sen. Scott Surovell, D-Fairfax, pointed out that inflation would require the minimum wage increase to go forward as planned. “Inflation in America is at 7%, which means if you consider that, based on $11 an hour, that means 77 cents of the next $1 just got eaten by inflation, which means that this bill is actually a 33-cent per hour wage increase,” Surovell said. “After you pay taxes on it, it’s probably even less than that, probably like 20 cents or $500 a year for the average worker. So the next step is really not that much of a big deal and not really a burden for business,” he said.