Virginia's minimum wage rises due to inflation — again
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For the second year in a row, Virginia is raising its minimum wage due to inflation, the state labor department announced this week.
Why it matters: Minimum wage workers in the state will see their pay bump up to $12.77 an hour, a 36-cent hourly increase, in 2026.
State of play: "Economic conditions," and more specifically, the Consumer Price Index, drove state labor commissioner Gary G. Pan to hike the rate.
- That's because of the Virginia Minimum Wage Act, which the General Assembly passed in 2020 — raising the state's minimum wage (then $7.25 an hour) for the first time in more than a decade.
How it works: The law called for a gradual increase to reach $12 an hour by 2023.
- After that, the state is required to adjust its minimum wage rate yearly based on the annual change in the Consumer Price Index for the previous year.
The result: The first adjustment, which took effect this year, raised the rate to its current $12.41 an hour.
- This next bump is effective Jan. 1.
Context: The CPI, of course, regularly adjusts based on the average increase in the cost of things most people pay for all the time, like food, clothing and housing.
Flashback: Around a half-million Virginians were making $12 or less an hour in 2021, according to a study of minimum wage workers commissioned as part of the 2020 legislation. A million Virginians made $15 or less.
- These workers were disproportionately women, people of color and younger workers.
- They were also most commonly working in food service, hospitality, health care and retail.
The bottom line: Thousands of Virginia workers will see a pay bump come January, and if the cost of groceries and gas keep going up, they'll likely see one every January for a while.