Virginia’s rising minimum wage: A bittersweet change for workers and small businesses

Business

VIRGINIA BEACH, Va. (WAVY) — If you’re an hourly worker, we probably don’t have to tell you that minimum wage recently went up in Virginia and it will go up again in January.

Over eight months’ time, it will go up $3.75, from $7.25 to $11 an hour. It’s a sweet incentive for some workers, but it’s leaving a bitter taste for some small business owners.

Gourmet chocolate and great customer service is what customers say keeps them coming back to The Royal Chocolate in Virginia Beach — but how much more will they be willing to pay for the indulgence?

It’s a question co-owner Brenda Tusing is wrestling with as she and other small business owners figure out how to manage Virginia’s rising minimum wage. “Where is that tipping point? We don’t know.”

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A recent Retail Alliance survey shows how local businesses might respond:

  • 6% would consider automation
  • 17% would reduce staff
  • 20% would reduce staff hours
  • 17% would cut overhead
  • 42% would raise prices
  • and 39% said they would face no impact, as they already pay above minimum wage

“It’s going to change the flavor of a lot of businesses, ours included, I guess,” Tusing told WAVY.com.

She used to start employees above minimum wage, but won’t be able to anymore.

“I don’t feel good about it; I really don’t,” she said.

It’s not just about the minimum wage. She bumped up pay for her loyal long-time workers to reflect the new wage scale, and now must also match their social security at the new rate.

There’s also the ripple effect because her vendors are now charging her more, she said.

Then there’s what’s next: In January, the minimum wage goes up another $1.50, from $9.50 to $11 an hour.

“Again, [for] small business, where does it come from?” Tusing asked.

Tusing is determined to find the sweet spot for her business of 15 years, but fears many small businesses that haven’t built a client base or were already in trouble will crumble.

Virginia’s minimum wage is set to go up in increments until it reaches $15 an hour in January 2026. However, at this point, it’s only guaranteed to reach the $12 mark next year.

The General Assembly must approve the following two increases on July 1, 2024.

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