Mount Vernon Column: Time To Raise Minimum Wage

Mount Vernon Column: Time To Raise Minimum Wage


Many readers know that I work for a nonprofit headquartered on Richmond Highway, in the heart of Mount Vernon. Small nonprofits like mine face many of the same troubles as small businesses: money is always hard to come by and we must operate within very small margins. Indeed, we rely on the generosity of the public for our support. Many of the people we serve are barely making it; they work long hours and struggle to get by. Helping people is what we do but wouldn’t it be better if they could do more to help themselves? The best way to make that happen is to raise the minimum wage.

A reasonably targeted and tiered increase can improve consumer spending, reduce worker turnover, lift people out of poverty and help grow our economy — all this without hurting our local business community. It is a win-win opportunity that is especially timely now that our economy is climbing out of the doldrums caused by the last federal sequester. Research suggests that a modest minimum-wage increase like the one I have proposed in HB623 could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and even push up job growth.

Let’s face it, the current minimum wage of $7.25 is just simply too low. It hasn’t been raised since July 2009 and adjusted for inflation — albeit a low inflation rate — it has even less value than it did seven years ago. An average minimum wage earner takes home only $14,500 a year before taxes, that’s working an eight hour day, five days a week. Even the most frugal single adult cannot survive, let alone thrive, on that small amount of income. Certainly not in Fairfax County. It’s no wonder he or she must turn to charities for assistance.

A man or woman who works a full-time job shouldn’t have to rely on public assistance or charities like mine, but they will have to in order to live anywhere close to where the minimum wage jobs are in our community.

There is an argument that raising the minimum wage, though it will help the individual worker, could have an adverse effect on the economy as a whole by putting too much of a financial burden on our business community, especially the smaller “mom and pop” operations that are an important economic driver. Another big concern is that employers would be unlikely to hire young inexperienced workers at the newly raised minimum wage rate.

These are valid concerns and my legislation, HB623, addresses them through a tiered rate and by exempting small businesses with less than 15 employees. My bill would keep the current federally mandated rate of $7.25 for those under the age of 25 years — an exception to allow businesses to hire teens and young people at a lower wage rate. This will protect the adult unskilled worker struggling to make it on one (or two minimum wage salaries for a couple), while maintaining what we historically recognize as the traditional minimum wage jobs for entry level, students, and seasonal or temporary workers. Our older workers, who have the experience, knowledge and loyalty valued by employers will benefit from the higher rate of $10.10, while younger workers will be more likely to get hired for an entry level position to gain the experience necessary for career success.

Some business owners may be worried that my proposed wage would affect Medicaid waivers. However, at $10 you're still a long way from $14.33 per hour that Medicaid reimbursement grants. However, pushing people off the Medicaid roles and onto the federal exchanges where they are eligible for insurance subsidies is not a problem, but a benefit and reduces the burden on Virginia taxpayers, who are currently being double-taxed for our inability to close the Medicaid gap.

The need for an increase in the minimum wage is the same one that created it in the first place, low and unskilled workers cannot survive on the current minimum wage rate of $7.25 an hour throughout the vast majority of the Commonwealth. It may seem a lot to those of us who remember when working a minimum wage job paid only a few dollars an hour, but when inflation and other costs of living are factored in, this is a meager rate indeed. I believe our hard-working neighbors deserve a raise.