Continuing the path to a $15 minimum wage is the right choice for families and our economy

This column originally appeared in Cardinal News

As elected officials discuss ways to boost Virginia’s economy, many often overlook the most important economic indicator. While job growth, unemployment, and other data help us to gauge how we are doing as a state, these indicators don’t tell us if our neighbors can put food on the table or keep the lights on. And that’s where our primary focus should be, because people are the economy. When people and families are doing well, have money to spend, and are able to spend it, the economy does better, too. Lawmakers have done their part to continue Virginia’s path to $15 an hour by 2026 by passing bills in both the House and Senate. The governor should sign the minimum wage bills to support people in Virginia and, therefore, our economy.

For those who prefer traditional economic data, such as jobs and poverty data, let’s take a moment to consider those points and why raising the minimum wage is good for the economy.

One of the biggest arguments around raising the minimum wage is focused on jobs. Most recent high-quality studies conclude that past increases in the minimum wage have had little to no effect on employment levels. Critics often cherry-pick data from a 2019 study by the Congressional Budget Office that notes a potential loss of jobs, even though CBO also acknowledges there may be no loss of jobs.

Still, the narrow focus on the overall number of jobs or hours worked is a flawed way of measuring the impact of minimum wage increases, because what matters most to low-wage working people is their total family income throughout the year. That same CBO study suggests annual earnings would rise for people who are directly or indirectly affected — even people who might be out of a job at first may come out even or ahead for the year due to higher wages when they are working again.

In Virginia, the annual income for year-round workers who would be impacted by the increase would rise by an average of about $1,300 in 2022 dollars. That’s money that working families with low incomes can use to pay the rent, make needed car repairs, and buy back-to-school supplies. And raising the wages of families with low incomes — who tend to spend most of their income in their own communities compared to high-income families who may simply stash much of it away — will help support more spending at local businesses, boosting and sustaining our economy.

Everyone in Virginia working a full-time job should be paid enough to provide for their family. However, for too many this is not the case. Nearly two-thirds of Virginia families with incomes below the federal poverty threshold — just $25,820 for a family of three — have at least one adult who is working, yet they are paid too little to make ends meet. Raising the minimum wage will help to reverse this: $15 an hour is enough to lift most working families with a full-time, year-round worker above the official poverty line. While many families will still struggle to afford the basics at this level due to the impact of rising costs and the high cost of childcare an housing in many areas of Virginia, every dollar makes a difference to these families and their communities.

This boost to local communities and economies would be felt throughout the commonwealth, even and especially in places where wages are currently low, such as southwest Virginia. A recent study of the effect of raising the minimum wage in counties and other small areas where the new minimum wage is a high share of the overall typical (median) wage found positive impacts on wages, a reduction in household and child poverty rates, and no negative impacts on employment, weekly hours, or annual weeks worked.

Evidence from Virginia and across the country shows that raising the minimum wage works to build opportunity. Today, Virginia has low unemployment rates and high rates of employment for the working-age population. Lawmakers must build on this progress with proven tools for our communities.

Continuing Virginia on the path to $15 an hour by 2026 would raise wages for about 611,000 working Virginians. That’s over 600,000 people who would be better able to purchase healthy food, stay up on rent, and make needed purchases for their families, with more resources flowing through our communities. People are the economy — when people and families are doing well, have money to spend, and are able to spend it, the economy does better, too. Gov. Youngkin should follow lawmakers’ lead to raise Virginia’s minimum wage to make sure people have the resources to provide for their families. It’s the right choice for impacted families, and it’s the right choice for our economy.