Minimum wage increase takes effect on New Year's Day in Virginia

RICHMOND, Va. (WRIC)- Another bump to Virginia’s minimum wage takes effect on New Year’s Day. Starting Jan. 1, 2023, the state’s minimum wage will jump to $12 per hour, up from the current rate of $11 per hour.

The recent increases in minimum wage are already being felt by some Virginia small businesses. At Gelati Celesti, a locally-owned ice cream chain serving Richmond and Virginia Beach, owner Steve Rosser said the series of recent minimum wage increases have taken a toll.

“In Virginia, we went 11 years maintaining a $7.25 minimum wage and then, in a matter of 20 months, we went from $7.25 to $12. That is very challenging for a small business,” Rosser said. “I’m pleased that our employees are earning more money. I really am. I think that is a good thing. I just ask that we do it in a more controlled fashion moving forward.”

Rosser said entry-level employees, usually high school or college students, make the minimum wage plus tips. He said the incremental increases since 2021 have raised their labor costs by 35%. Meanwhile, he said inflation is driving up dairy prices.

“That rapid increase in expenses is very difficult for us to manage,” Rosser said. “We have had to raise our prices, but not to the degree that we have recovered all of that.”

Rosser has no plans to cut any jobs because of the minimum wage increase, a point that divided lawmakers as they debated a GOP bill that aimed to stop minimum wage increases from taking effect. The proposal failed in the Democrat-led Senate earlier this year after passing in the House of Delegates, which is controlled by Republicans.

“If you make it more expensive to hire somebody that needs that initial job, fewer of those people will be hired,” Del. Nick Freitas (R) said during a debate on the House floor.

“The simple belief that raising the minimum wage hurts workers is an article of faith not an economic fact,” Del. Sally Hudson (D) responded.

The boost to $12 per hour is the final phased increase that the General Assembly has fully authorized. Under Democratic leadership in the 2020 session, lawmakers laid out a plan to raise the minimum wage to $15 per hour by 2026. But further increases will require additional approval, a tall order in a politically divided General Assembly.

Del. Jeion Ward (D), who sponsored the 2020 law that increased the minimum wage, said she will not be introducing a bill in the 2023 session to get Virginia to $15 per hour because it’s certain to die in the Republican-controlled House of Delegates. However, she expects it will be a defining issue in future elections. In the fall of 2023, members of the General Assembly will be on the ballot statewide.

Ward said she also wants to see the results of a study measuring the economic impact of increasing the minimum wage.

“Let’s review how things are going,” Ward said. “We have not had a chance to sit back and see the impact it is having.”

Governor Glenn Youngkin’s office did not respond to a request for comment.