The minimum wage in Virginia is currently $9.50/hr . That equates to $19,760 per year if you are employed full time. Minimum wage is set to increase in large increments for the next few years. By 2026 it is set to be $15/hr which is $31,200 per year. It would seem normal for wages to increase every year for inflation because everything is getting more expensive. The inflation rate for the U.S. over the last year was 5.3%. This is uncharacteristically high so I took the average of the annual inflation rates of the past decade which was 2.28%. Using this I found the minimum wage in 2026 adjusted for inflation which is $10.63/hr. Because of the discrepancy between the current wage just adjusted for inflation and the set government wage there will be fewer minimum wage jobs. Businesses still have the same amount of money for salaries so they will either be forced to have employees work shorter hours or fire people.
Put simply this minimum wage bill is a price floor on labor. When the market is not allowed to adjust to the equilibrium there will be waste. In this scenario the waste is individuals who would be willing to work for less, but are unable to find employment due to the cost it would take a company to hire them. Assuming that there are no loopholes that can be exploited the unemployment rate should increase. The other scenario that could occur is increased prices due to the rise in wages. In order to maintain consistent profits businesses will raise prices to compensate for the increased wages and consumers will be the ones to pay the extra wages. Since minimum wage is the smallest amount of money a person can make if it is increased then the price of everything connected to minimum wage labor will increase causing wage push inflation. This will negate the effects of the wage increase leaving every person in the exact same scenario in which he started.
Sources Cited
You make a good point here. I live in Maryland where the minimum wage is currently $11.75 and continues rising. I used to work in Baltimore when the wage was $10.10, and when it was announced that the wage was rising, several of my coworkers got laid off because the business would not be able to pay that wage and keep all of the workers. These people were willing to work for $10.10, but the government operates on this notion that all businesses are run by greedy people at the top who pay their workers as little as possible to maximize profits for themselves, a notion which is not true in most situations. All the government is doing here, even though it thinks it is helping people in poor areas, is causing those people to lose their jobs and the businesses they worked at to struggle even more.