By Terry Durkin
Durkin is Vice President of Public Policy for the Roanoke Regional Chamber of Commerce.
As a new majority prepares to take its place in both the Virginia House of Delegates and Senate for the 2020 General Assembly legislative session, the Roanoke Regional Chamber of Commerce has been watching closely to see how the region’s business community may be affected by changing legislative priorities and a shift of political power toward northern Virginia. We are encouraged by signs that the new majority will be supportive of proposals that encourage business collaboration with the educational community to promote opportunities to help grow our local workforce, among other initiatives. However, we are concerned about overtures to increase the minimum wage to $15 per hour and the potential repeal of the Commonwealth’s “right-to-work” law. These two policies, if implemented, could have significant negative effects on job growth and employment in our region.
For those whom may not be as familiar with the issue, right-to-work was adopted decades ago as a protection for both businesses and employees to prevent compulsory union membership as a condition of employment. Pushes have been made in the years since its adoption by some to repeal right-to-work, which would conceivably increase the collection of union dues as well as heightened bargaining power unions would yield over businesses, both large and small. An analysis commissioned by the Virginia Chamber of Commerce estimated that Virginia’s economy could lose more than $1 billion each year as a result of any potential repeal of right-to-work. At stake is our reputation as the nation’s #1 state to do business. We are encouraged that Governor Northam has publicly stated that he does not support ending Virginia’s right to work status, but we will be monitoring this issue diligently to ensure that our region’s employees still have the freedom to choose whether or not to join a union.
The discussion over raising the Commonwealth’s minimum wage to as much as $15 per hour within a matter of several years is troubling as well. Under a current proposal that has been pre-filed for the upcoming 2020 legislative session, Virginia’s minimum wage of $7.25 per hour—the federally mandated minimum wage—would increase to $9 beginning July 1st of 2020, with increases to occur each year until the state minimum wage reaches $15 in 2023. This has the very real potential to harm businesses and their employees across many business sectors in our region. According to a Bureau of Labor Statistics study conducted in 2018, only 2.1% of America’s workforce earned an hourly wage at or below the federal minimum, many of which are employed in service industries. The imposition of an arbitrary minimum wage increase, especially one which does not consider regional cost of living differences, could disproportionately affect employees due to employer reduction of hours, as well as the potential for automatization of tasks. We have already seen this trend in some fast food restaurants and grocery stores. Employers who already pay an hourly wage above the current minimum would almost certainly see their cost of labor increase as the labor market is artificially made more expensive. It is no secret that the cost of living in northern Virginia is far greater than in our region, which could very well be the impetus for this push. But a minimum wage schema that doesn’t take this cost of living disparity into account has far ranging implications that should not be ignored by the new majority.
The repeal of right-to-work and the proposed increase of our minimum wage would certainly place the Commonwealth’s status as the No. 1 state to do business in doubt and could lead to the migration of some employers to surrounding states. What we should be focusing on are more productive policy discussions, such as refining workforce development and cultivating the talent-to-workforce pipeline. The Roanoke region’s business community will benefit greatly from an improved I-81 corridor, as well as increased service from the Roanoke-Blacksburg Regional Airport. Improving our transportation infrastructure will allow us to attract a diverse range of businesses that are drawn to our appealing business climate and outdoor attractions, among the other great reasons to locate here. The Chamber looks forward to working with our regional delegation to the General Assembly to advance policies that will benefit businesses and their employees, and will continue to stand opposed to legislation that would place our region’s economic progress in jeopardy.