Washington, DC—Legislators in Virginia reached a historic deal on Saturday to gradually raise the state’s minimum wage from $7.25 to $12 by 2023. The deal also puts the Commonwealth on the path to a $15 minimum wage by 2026—a move that would benefit more than 1.25 million workers, according to the Commonwealth Institute, but will require lawmakers’ approval in 2024.

Virginia becomes the first southern state to get on the path to a $15 minimum wage; it joins 29 other states in raising the minimum wage above the federal minimum wage floor of $7.25.

“Like the federal minimum wage, Virginia’s minimum wage has been stuck at $7.25 per hour for more than a decade. It was beyond time for the Commonwealth to act. We congratulate Virginia for this achievement, which was the result of tireless advocacy by workers petitioning their representatives in Richmond for wages that will help them to better support their families in the face of some of the highest costs in the nation,” said Rebecca Dixon, executive director of the National Employment Law Project.

The legislation will initially raise Virginia’s minimum wage from $7.25 to $9.50 on January 1, 2021, a significant first-step increase that will begin to make up for the lost purchasing power of Virginia’s minimum wage over the past decade. The legislation will also remove exclusions from minimum wage protections for domestic workers and those who perform piecework. These exclusions operated, by and large, to the detriment of workers of color and women.

“We congratulate Virginia for taking this first important step toward racial equity in its minimum wage policy,” said Dixon. “But the Commonwealth must still grapple with the exclusions for agricultural workers and tipped workers, and we urge the General Assembly to repeal those exclusions in next year’s session. We stand united with the workers and advocates who are demanding these reforms.”

By creating a path to reaching a $15 minimum wage in Virginia, the Commonwealth is one step closer to joining its neighbors Maryland and the District of Columbia—as well as Massachusetts, New Jersey, Illinois, Connecticut, California, and New York—in raising the minimum wage to $15. And it joins 29 other states that have increased their minimum wages above the paltry federal floor of $7.25. Thanks to these minimum wage laws, nearly one-third of the U.S. workforce is now on a path to a $15 minimum wage.

Raising the minimum wage increases consumer spending and can boost demand for goods and services, keeping money circulating in the economy and creating a virtuous cycle that benefits workers, businesses, and communities. Last year, a Federal Reserve Board report found that 40 percent of Americans did not have $400 to cover an unexpected expense, while large companies reap historic profits and tax breaks. Across the board, workers are responding vigorously to stagnating wages by demanding higher standards and organizing with unions.

Since workers in New York first walked out of their fast-food jobs in November 2012 to demand a $15 minimum wage and a union, more than 20 states and 40 cities and counties have raised their minimum wage. The benefits for workers and their families from raising the minimum wage have been significant. In the face of broader economic trends that have led to wage stagnation for many workers, raising the minimum wage has reduced economic hardship, lifted workers out of poverty, and improved other life and health outcomes. A recent NELP report shows that minimum wage hikes in states and cities are driving real wage gains for workers in the lowest-paid jobs.

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