Monday, March 2, 2015

Why Are Minimum Wages So Low?

Virginia bucks political, economic trends

Posted By on Mon, Mar 2, 2015 at 3:41 PM

Virginia is notoriously stingy when it comes to paying workers a fair minimum wage, but is there is upward pressure on pay?

In this year’s General Assembly, the old skinflint thinking prevailed. Mossback legislators shut down several attempts to bring minimum wages into the realm of reality, by proposing hiking the current $7.25 an hour minimum to $8 or so and then to $10.10 an hour.

The efforts were quickly picked as cleanly as shads on a plank.

But there is a countervailing trend. Long-time cheap-o, huge and powerful mass retailer Wal-Mart is planning to raise its minimum to $9 an hour for 500,000 full- and part-time workers -- about one-third of its workforce. By next February, the pay will move to $10 an hour.

You might think that the stirring economy was responsible for the better pay, but it's really something else. Wal-Mart notes that there are so many big, cheap competitors around that it needs to make a better shopping experience.

“With the changing retail landscape, with the different options that customers have, competition on prices is tougher than we’ve seen it in a long time, and with that comes an increased premium on experience in the store,” company executive Dan Bartlett says.

If that’s the latest thinking, why isn’t it percolating down to Virginia? One place it might go down well is in the restaurant sector. Richmond has something like 11,380 servers who survive basically on gratuities. They make a skimpy $2.13 an hour on average before tips. Starting salaries with tips usually are $16,340 but can go as high as $32,000 a year or so.

If you want higher server salaries head to Vegas, or (believe it or not) Charleston, West Virginia.

The Virginia legislature is so conservative that even a booming economy won’t shake loose the Old Plantation thinking about remuneration. It's one reason we boast mindlessly of our “right to work” law.

It’s like, so, 19th century!

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