Virginia businesses weigh pros and cons of recent minimum wage increase

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BRISTOL, Va. (WJHL) – Over the weekend, the minimum wage across the state of Virginia increased by $2.25. Now, instead of the federally mandated minimum of $7.25, the minimum wage in the state sits at $9.50.

However, the increase doesn’t stop there. The raise that went into effect on May 1 was just the first phase of an incremental rise. In January, the minimum wage will increase to $11 dollars an hour and in 2023 it will be $12 dollars an hour.

While more money in the pockets of employees sounds like a positive change, with every change comes its pros and cons. According to officials from the Bristol Chamber of Commerce, the pros are in favor of the employees.

“If you look at it from the perspective of an employee looking to make more money, then I think it’s attractive to them looking to businesses who will be offering that minimum wage,” President & CEO of the Bristol Chamber of Commerce Beth Rhinehart said.

Others see the increase as long-awaited and much needed. “I love it, I think it’s a good thing. I don’t know if you’ve calculated, but $7.25 isn’t exactly what I’d call livable for even a single young person,” said Savanah Harrison, a local business owner, and independent vendor.

While Harrison doesn’t have people employed beneath her in her business, she has worked minimum wage jobs in the past and believes the raise is a good thing, specifically for employees struggling during this pandemic.

Business owners said they are also struggling and now is not the time for any additional costs. If the raise is looked at from the perspective of business owners, it’s clear they want to pay their employees as much as they can, but with increases in shipping, inventory, and other costs all hitting at the same time as the raise, it’s overwhelming.

“We’ve just come off of a very tough year and are still in the pandemic to some degree in terms of recovery especially in our tourism and hospitality businesses among others, and it’s really going to put a strain on them in terms of fulfilling that minimum wage,” said Rhinehart.

“I think it would hurt them for sure. We’ve prepared ourselves financially for if the pandemic got like it did last year so we have set back extra funds to do things, we just didn’t think they’d be used on increased pay wages at this time, said the Owner of the Trading Shoppees, Megan Muncy-Collins.

For some, the raise will not impact their business at all. “We’ve heard from some businesses that they already offer more than the minimum wage bump, so it may not impact some of them,” said Rhinehart.

Rhinehart does see the raise becoming an issue for businesses along State Street seeing as the Tennessee minimum wage is still $7.25. Right now, Rhinehart said the biggest struggle is finding employees, and seeing as people have the potential to make more on one side of the street than the other, that could impact staffing at local spots.

However, Rhinehart does believe this increase also has the potential to bring employees back sooner.

The next minimum wage increase is set for January of 2022 in Virginia.

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