Advocates want Northam to expand minimum wage bill, others say recession demands delay

Gov. Ralph Northam is facing dueling pressure campaigns to amend marquee legislation passed by the General Assembly last month raising the minimum wage to $12 an hour over three years.

On one side, farmworkers are pushing for Northam to strike language allowing agricultural operations to continue to pay them $7.25 an hour, an exemption they say is rooted in Jim Crow-era racial animus.

On the other side, business groups, Republican leaders and the Virginia Municipal League, which represents all 38 cities in the state, are asking Northam to delay the legislation altogether, arguing the sudden economic downturn caused by COVID-19 would bust budgets and make it harder for businesses to recover.

So far, Northam’s administration hasn’t given any hints which way, if any, it’s leaning. His deadline to sign, veto or recommend amendments to legislation is April 11.

“Obviously, everybody is looking at everything right now because of the drastic change in our economy,” Northam’s Secretary of Finance, Aubrey Layne said.

Delivering on what had been a top-line campaign promise for state Democrats took weeks of negotiation between leaders in the House, which favored a $15 minimum wage and more aggressive timeline, and the Senate, which proposed a regional approach paired with a slower implementation.

The two chambers finalized a deal in the final hours of the legislative session, agreeing to a plan that raises the minimum wage to $9.50 on Jan. 1, $11 in 2022 and $12 in 2023.

The legislation also eliminated exemptions in the code that allowed employers to pay some workers less, including domestic workers, home health care workers and workers paid on a per-piece basis.

But it preserved other exemptions, including for student workers, traveling salesmen and caddies on golf courses, among others.

Farmworkers not included in minimum wage bill

Advocates say the biggest category of employees left behind by the legislation is farmworkers, thousands of whom are expected to arrive in Virginia over the next several months to plant, cultivate, pick and plant, says Jason Yarashes, who leads the Legal Aid Justice Center’s Virginia Justice Project for Farm and Immigrant Workers.

“Farmworkers are doing the toughest work, in our estimation, in the country,” he said. “They’re super vulnerable, doing back-breaking work, and we believe these folks deserve the same protections other workers have.”

Farmworkers were excluded from the federal minimum wage when it was adopted in 1938. At the time, most were African American, and Southern representatives in Congress objected to white and black workers being placed on the same pay scale.

The exemption has been preserved in many states, including Virginia.

The Virginia Farm Bureau and other industry groups successfully lobbied to preserve the exemption, arguing including them in the minimum wage law would put farms out of business.

“Farms are highly seasonal and for many delicate crops, like grapes, apples, fruits, and produce, the harvest window may only be a few days per year,” said Ben Rowe, the bureau’s national affairs coordinator. “Farmers need to be able to compensate workers based on actual work done.”

He said most workers already make more than minimum wage, with a median hourly wage of about $13 an hour, according to the federal Bureau of Labor Statistics.

But workers said it’s not uncommon to make far less than that. One laborer on the state’s Eastern Shore said she often picked tomatoes for 12 hours a day and was paid 60 cents for every 32 pound basket she harvested.

“I made $50, $60 a day,” said the worker, who spoke on the condition that her name not be used because she worried it would make it more difficult to find work in the future. “Sometimes less.”

She said farmers should have to structure their businesses in a way that allows them to pay their workers a living wage just like every other industry. “It should work that they pay us a better wage,” she said. “They should be able to do it too.”

Local governments raise budget concerns

On March 11, the day before the General Assembly met to finalize its budget, Northam said he considered the minimum wage bill well vetted.

“I have always been an advocate for raising the minimum wage,” he said. “There’s no way people can live off $7.25. … Obviously rural Virginia has some concerns about it, so we’re listening. … But at the end of the day, I think it’s important for Virginians to know that we are raising the minimum wage. That’s a given.”

His comments came when there were just eight confirmed cases of COVID-19 in the state — well before it became clear that drastic measures would be implemented to curb infection rates.

Since then, thousands of businesses have closed or scaled back operations and more than 46,000 workers filed for unemployment insurance in one week.

The uncertainty has led to renewed calls from opponents of the minimum wage increase to scrap or delay the legislation, arguing it would only worsen an already challenging economy. The legislation was already opposed by every major business group in the state.

“We have businesses that are not able to operate at all,” said Sen. Ryan McDougle, R-Hanover, questioning how many would reopen with the added stress of a wage hike. “There are no customers. They can’t transport products.”

The Virginia Municipal League asked Northam to delay its enactment for a year. The organization considers it, along with 10 other measures passed by the General Assembly, an unfunded mandate that will increase the cost of doing business for local governments by pushing salaries up for all workers.

Supporters of a minimum wage increase said the economic crisis only makes it more important for the roughly 400,000 workers who would see their wages increase, arguing the last federal minimum wage increase in 2009 also came in the midst of a recession and studies did not find a negative impact on employment.

“The thing about increasing the minimum wage is it can be a tool for boosting consumer demand, which is what we’re going to need to expedite recovery once the economy opens up,” said Phil Hernandez, an analyst with the Commonwealth Institute for Fiscal Analysis. “For those impacted workers, the change in their annual income will be almost 900 for the year,  which then they can use to purchase things in the economy.”