by Chris Saxman
During Monday’s Senate Commerce and Labor Committee, three bills were on the agenda attempting to raise the minimum wage. Virginia’s policy has been at least since the late 1990s to mirror the federal minimum wage which stands at $7.25 an hour. That rate became effective in July of 2009.
Watching the committee hearing via video streaming, I was struck by the political exchange. Trust me, this is not a criticism of any committee member or bill patron or even those who came to testify on the issue. It’s just where we are as a nation.
Like the title of the popular series on ABC: “This Is Us.”
Full disclosure – I personally oppose a minimum wage. It is not the role of government to set the cost of labor or any other business costs. Federal Reserve Bank notwithstanding. Having run a business with my family in which we had some employees at an hourly rate and having been an employee paid the minimum wage, I think a federal minimum wage sets a false floor for fair, market based compensation for labor. For hourly workers, the minimum wage is the starting point for the negotiations rather than the true value of labor in the market. But that’s just me.
There were three bills submitted by Senators Rosalyn Dance (SB251), David Marsden (SB240), and John Edwards (58) on the agenda. During the discussion, Chairman Senator Frank Wagner pointed out that the committee last year defeated minimum wage increase legislation and that the committee composition was roughly the same, indicating a similar fate for the legislation.
This was a legislative courtesy to suggest that something needed to have changed in these bills from last year’s bills if a different result was to be possible. In short, “We haven’t changed much, have you?”
The bills from Marsden and Dance were “rolled into” Senator Edwards’ bill (HB58), which meant they were set to hear testimony and debate on that legislation seeking to raise the minimum wage to $8 in July this year, $9 in 2019, and $10.10 in 2020.
Seems pretty functional at this point, right? Here’s the “Us” — the text of the bill was NOT discussed. There was no mention of why those wage levels were offered and what impact it would be on either employers or employees. Instead, what happened was that a series of speakers for an increase just said, in essence, “We need more money,” “We can’t subsist on $7.25 an hour.”
(Senators would likely agree since, based on a forty hour work week, they only make $8.65. House members only get $8.48.)
Then came the opponents from the business community who opposed the legislation largely because they always have due to the fact that it hurts small business, which has smaller margins from which to negotiate labor costs.
It was like those scenes from Casablanca where Captain Renault rounds up “the usual suspects” and then to impress his German counterparts, he rounds up “TWICE the number of usual suspects.”
Back to Commerce and Labor…
During the meeting, all of the Democratic members of the committee spoke in favor of increasing the minimum wage but never discussed the actual bill that scaled up the wage from $8 to $9 to $10.10 an hour. Why $10.10?
Senator Dick Saslaw, D-Fairfax, asked some pointed questions of one lobbyist who represents several Northern Virginia chambers of commerce. Since the $7.25 an hour in Northern Virginia is very different than $7.25 in Wise or Matthews Counties, Saslaw asked, “Is raising the minimum wage anti-business? I have spoken to several of your members and they don’t oppose raising it.” Again, not to the text of the bill with possible economic implications but rather a political question based on some are and some are not. Saslaw is a very pro-business legislator and has been so for his entire career, but he was direct. There is direct and then there is Saslaw Direct. This was the latter not the former.
Senator Dance, whose bill offered a $10 to $13 to $15 in 2020 scale, again without economic impact, asked if there was something, anything, that could be done to help those making minimum wage.
Shortly thereafter SB58 was voted on achieving the same results as last year – 11-3 to Pass By Indefinitely or PBI for short. Defeated.
Had an amendment even been offered to adjust the 2009 rate of $7.25 to inflation ($8.34 in 2018 dollars) and peg the rate forevermore to CPI or COLA adjustments, that would seem more reasonable right? Well, until it got to the floor and then we’re back to square one – bidding up the bill with amendments to $15 an hour. That’s, again, political calculus rather than economic consideration.
No articles have appeared, to my knowledge, on this issue in either the Richmond Times Dispatch or via the VPAP daily news feed (you should get that by the way – www.vpap.org)
Thankfully, the committee meetings are live streamed so we can watch our legislative process in action or, in this case, inaction.
But didn’t the business community get the outcome it desired? Perhaps.
Yes, a $15 statewide minimum wage would be bad, but was any progress made on the merits – either way – on the best wage policy for the Commonwealth’s economic and business climate?
Not at all.
This is Us.
Chris Saxman is executive director of the Virginia Foundation for Research and Economic Education. This commentary was originally published as an email missive.There are currently no comments highlighted.