Money In Hand Money In Hand

The Federal minimum wage still sits at $7.25 per hour. 

Here’s the good news: at $11 an hour in 2022, Virginians did make significantly more than the federal minimum wage of $7.25. Here’s the not-so-good news: even at nearly $4 more an hour than some Americans, that’s not a sustainable living wage in the commonwealth.

There is some more good news. On Jan. 1, Virginia’s minimum wage will rise to $12 per hour. The change is part of a multi-year plan to grant working Virginians a $15 minimum wage starting Jan. 1, 2026. 

It’s a needed increase, too. According to a 2021 research paper authored by students at Boston University School of Public Health, Johns Hopkins Bloomberg School of Public Health, and the University of New Mexico, raising the minimum wage to $12 could have impacts on food insecurity rates decreasing.

The students found that people with a minimum wage of $12 an hour experienced a 2% decrease in household food insufficiency, compared to those making less than $8 per hour. 

American Progress also looked into the minimum wage gap as it related to the leisure and hospitality industry in 2021. Overall, states with workers making a minimum of more than $12 an hour saw an industry-wide employment growth of 25%. Comparatively, there was only 7% of growth in states offering $7.25. 

While a dollar more an hour certainly adds up, there’s still more work to be done to help Virginians achieve a sustainable living wage.

What Do Low Wages Have to Do With Working?

A job’s a job, right? Well, not exactly. 

Imagine working 40 long, hard hours a week in 2022 and only receiving $440. While it might look like you’re making over $22,000 a year, the reality is that most Virginians working full-time minimum wage jobs only took home about $19,500—and that’s before paying health insurance.

To put things into perspective, Social Finance, Inc. calculated the average cost of living in Virginia to be just under $43,000 a year, based off of data collected in 2020. 

Average housing costs alone ranged from just over $1,170 to nearly $1,800 per month. Add on an average monthly utility bill of nearly $400, personal food and grocery costs of almost $300, transportation costs, healthcare costs, and child care, and you’ve officially taken care of most of the necessities. If you were making minimum wage and only cleared $1,600 a month for 160 hours of work, that likely created financial issues. 

Comparatively in Virginia, the average household income was slightly more than $80,600 in 2021, according to the US Census Bureau

More Than Money 

In Virginia, the wage gap presents itself in more ways than simply monetarily. 

WalletHub recently released a list featuring the top 182 neediest cities. Virginia localities made the list a total of five times. Cities in the commonwealth included Richmond at #25, Newport News at #42, Norfolk at #61, Virginia Beach at #166, and Chesapeake at #169. 

To determine a city’s ranking, the group looked at a multitude of factors, including the child poverty rate, the food-insecurity rate, and the uninsured rate.

Phil Coltoff, a Senior Fellow of the New York University Silver School of Social Work and former CEO of the Children’s Aid Society of New York, provided comments on the data. He noted the history of those considered “poor” over the past five decades, and how those populations have shifted over time.

“Over the last 50 years, the composition of those considered ‘poor’ (below federal guidelines) have been immigrants, the elderly (before the indexing of Social Security), children, members of minority groups especially those of color, and more recently those with physical or emotional disabilities,” Colton said. “While poverty has existed in every region and location, urban and rural, in recent years it has been concentrated more in large cities where a significant part of the population was of color, large families, recent immigrants, and the homeless. The pandemic ushered in large and new influxes of government money referred to as stimulus payments. The largest and most significant of these programs was the Child Tax Credit (CTC)—government dollars that went directly to families based on the number of children and those living below the poverty line which was expanded.”

Unfortunately, the expanded CTC, which provided up to $300 per child per month to American families in 2021—did not renew. It also did not make it into the latest $1.7 trillion omnibus federal spending bill, despite aiding over 61 million children in more than 36 million households.

Coming Change

However, a change is coming. Over the next few years, Virginians will receive a minimum wage that could help lessen the income vs. cost of living gap.

On Jan. 1, 2025, the minimum wage in Virginia will rise to $13.50 an hour.

The $15 minimum wage will take place on Jan. 1, 2026 for Virginians.