Minimum wage in Virginia increases in 2025, but advocates say it's not enough

Kate Seltzer, The Virginian-Pilot on Jan 1, 2025

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NORFOLK, Va. — This New Year’s Day, the state minimum wage will increase to $12.41 an hour, up from $12.

The change is a result of legislation passed by the General Assembly in 2020 that stated if the legislature failed to change the minimum wage by statute, beginning in January 2025, the minimum wage would be raised annually in accordance with inflation. This year, that amounts to a 3.4% increase.

Advocates say it’s not enough.

“The good thing here is that the $12.41 minimum wage helps workers not lose money due to inflation,” said Sophia McGinley, labor policy analyst at The Commonwealth Institute for Fiscal Analysis, an economic justice advocacy group. “It still is not enough for supporting working families.”

A person making $12 an hour and working 40 hours a week would earn $480 a week, minus taxes. That would increase to $496.40 a week, or about $25,000 a year, at a $12.41 an hour wage.

In 2021, when the state minimum wage increased to $9.50 an hour, about a million Virginians were making less than $15 an hour, according to a state report. Based on income data from the Census Bureau’s American Community Survey, about 270,000 full-time, year-round workers in Virginia were paid at or below the state minimum wage in 2023.

“The 41 cents doesn’t really make a big difference,” McGinley said. “We are looking for policymakers to increase the minimum wage in meaningful ways.”

Last year, the Democrat-held houses of the General Assembly passed legislation to increase the minimum wage to $13.50 an hour in 2025 and $15 an hour in 2026. Gov. Glenn Youngkin vetoed that legislation, keeping the minimum wage at $12 an hour.

“This is the debate about the minimum wage: Should the minimum wage be an entry wage for workers in the labor market with the expectation that they will gain experience and skills and transition into higher wage jobs, or should the minimum wage be what some people call a livable wage?” said Bob McNab, chair of the economics department at Old Dominion University. “It would be very, very tough for somebody to have one minimum wage job and essentially survive with some standard of living in today’s economy.”

The MIT living wage calculator reports that a childless adult living in Virginia Beach, Norfolk, or Newport News would need to make an hourly wage of $22.77 to support themselves.

McNab said there is cause for economic optimism for Virginians in metrics outside of the minimum wage, which he said ultimately affects a small percentage of workers — both statewide and nationally, most people earn above the minimum wage. In the private sector, non-supervisory employees, everyone who is not a manager, have seen their wages increase in recent years.

“What we’ve seen is those wages have outpaced inflation over the last four-plus years, even though many people don’t feel that way,” he said. “Of course, the highest increases in wages and salaries have been the top end of the income distribution versus the bottom over the last decade.”

Virginia’s gross domestic product also continues to climb, McNab said. Still, at a structural level, people generally feel worse about the economy than they did under similar circumstances pre-pandemic.

“There’s a mixture of mostly good news tempered by higher prices, especially higher rent and single family housing values that provide a lot of stress for people,” McNab said. “We’re just not building enough housing, given population and economic growth in the region.”

In Hampton Roads, for instance, half of renters and a third of homeowners paid more than 30% of their income in rent or mortgage payments, he said.

McNab also said new federal policy could impact the Virginia economy. Significant tariffs with foreign trading partners could impact the amount of goods coming through the Port of Virginia and raise costs; restrictions on immigration could result in fewer foreign students paying out of state tuition at Virginia universities; and a reduction or relocation of the federal workforce in Northern Virginia and Washington, D.C., could result in a significant downturn in economic activity in the region, he said.

“There’s just a lot of uncertainty,” he said. “We do not know what will be actual policy.”

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