An economist is warning that Virginias recent minimum wage mandate wont help the state with affordability as it is intended and could lead to thousands of jobs being cut.
“I think something that we’ve seen in coverage of this bill and how this law in Virginia was that this is something that needed to be done to improve affordability for Virginians,” Rebekah Paxton, the research director of the conservative Employment Policies Institute, told Fox News Digital on Wednesday.
Paxton explained during the interview that businesses will be forced “to find room in their operating costs to make those numbers work.”
“They have to decide, because the cost of labor has now gone up over just a few years â Do I have to reduce the number of positions? Do I need to shorten the number of hours I’m giving the people I have on staff? Do I have to raise prices to try to accommodate the difference in labor costs? Because just because the minimum wage is going up doesn’t mean their sales are increasing by default,” she said.
Virginia Democratic Gov. Abigail Spanberger, , signed a law in April that would incrementally increase the state minimum wage to $15 per hour. Spanberger called the legislation “a win for the businesses that call Virginia home.”
“Today, we are putting more money in the pockets of Virginia workers,” Spanberger said. “If you work full-time in Virginia, you should be able to afford to live in Virginia. You should be able to keep up with your rent or mortgage, fill your medications, and save for your kids futures.”Â
Spanberger’s office did not respond to Fox News Digital’s request for comment.
and state leaders mandating a minimum wage or considering the policy amid a nationwide debate over combating affordability problems. In some cities, for a $30 minimum wage mandate.
The Employment Policies Institute released a study in 2022 claiming that 12,000 jobs would be lost if Virginia raised the minimum wage. Now that the mandate is a reality, Paxton warns of dire consequences.Â
The think tank estimated that the Democrats’ plan of an incremental wage increase for hourly workers from $12.77 to $13.75 next year and to $15 in 2028 will increase service-industry operating costs.
“We’re also looking at sort of how red states deal with minimum wage hikes versus Blue states. And we find kind of across the board, it doesn’t matter,” Paxton said.
“Essentially, when the minimum wage goes up, alongside a lot of other costs that are going up for businesses, restaurants in particular, retail that have the most minimum wage workers, they have to make tough choices,” she added.
