Virginia is now one signature away from enacting a $15 minimum wage — and potentially losing thousands of jobs and opportunities with it. Supporters say the measure will ease affordability pressures facing working families. However, economic research suggests the policy could worsen inflation and cost jobs, tradeoffs that lawmakers cannot afford to ignore.
Making Basic Necessities More Expensive for Virginians
Minimum wage hikes typically force employers – particularly small businesses – to make operating changes to adapt. Substantial research shows minimum wages trigger significant price increases. Based on Virginia’s current wage level and decades of peer-reviewed research, EPI estimates that the jump from $12.77 to $15 could drive roughly a 7% price increase or more for certain categories of expenses. For families already managing higher costs for food, housing, and utilities, additional price increases could offset much of the intended benefit.
Erasing Job Opportunities in the Commonwealth
Decades of economic research shows wage hikes cost jobs. An EPI study found that moving Virginia’s wage to $15 could result in more than 12,000 lost jobs statewide – more than 6% of its restaurant workforce.
Economists agree the burden would likely fall hardest on younger and entry-level workers, who are often the first to feel the effects of higher labor costs. While the promise of higher pay is appealing, the economic reality is that wage mandates can reduce opportunities for those trying to gain a foothold in the workforce.
Wage hikes in neighboring Maryland and D.C. and across the country offer cautionary examples. In Maryland and the District of Columbia, restaurant industry growth has stagnated following steep wage increases. So far, Virginia’s restaurant industry job growth has been more insulated from regional job loss trends than its neighbors, but will adopting a $15 minimum wage put restaurant jobs in greater jeopardy?
Nationally, a study published in the Journal of Labor Economics found that large “Fight for $15” style increases between 2011 and 2019 led to substantial job losses, especially among young and less-experienced workers in several states.
The Bottom Line
The goal of improving affordability is understandable. The question is whether a rapid jump to $15 will strengthen Virginia’s labor market — or make it harder for businesses to stay open, for workers to find jobs, and for residents to afford basic necessities. As the bill heads to the governor’s desk, the Commonwealth faces a consequential economic decision.