GOVERNOR'S VETO

Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto House Bill 1, which mandates an increase in the minimum wage in Virginia. 

The free market for salaries and wages works. It operates dynamically, responding to the nuances of varying economic conditions and regional differences. This wage mandate imperils market freedom and economic competitiveness.

Even without my signature, current law mandates an increased minimum wage in the Commonwealth, indexing it to the Consumer Price Index for All Urban Consumers, as certified by the Commissioner of Labor and Industry, starting in October 2024. This approach is preferable, allowing wages to adjust over time in response to economic conditions. In contrast, the proposed mandate will harm Virginia's economic progress. 

Implementing a $15-per-hour wage mandate may not impact Northern Virginia, where economic conditions create a higher cost of living, but this approach is detrimental for small businesses across the rest of Virginia, especially in Southwest and Southside. A one-size-fits-all mandate ignores the vast economic and geographic differences and undermines the ability to adapt to regional cost-of-living differences and market dynamics. 

This proposal is an arbitrary, mandatory 25% increase in the starting wages of all employees. Contrary to ensuring higher compensation, such a substantial increase will raise business operational costs. In response, businesses will raise prices, creating more inflation, and implement hiring freezes and layoffs, ultimately hurting the workers the proposal seeks to assist. 

This proposal also harms Virginia's economic competitiveness. Neighboring states have reduced business costs and encouraged investment, resulting in thriving economies. The net out-migration of over one hundred thousand residents from Virginia between 2012 and 2021, primarily to states like North Carolina, Tennessee, Texas, and Georgia, none of which have wage mandates. 

Contrary to the proponents' claims, the proposal is unlikely to attract jobs to the Commonwealth. Virginia is experiencing a population decline to states with lower minimum wages while gaining population from states with higher minimum wages. Instead of adopting the failed economic policies of states with stagnant economies and persistent fiscal distress to our northeast, Virginia should emulate states prioritizing tax relief and efficient government. 

Successful states recognize that the government does not need to set labor prices; instead, they prioritize creating an economic environment conducive to wage growth. The Commonwealth should adopt this approach, reducing taxes, reducing regulations, reforming workforce programs, and investing in public education. Allowing the free market to operate is the only proven long-term path toward sustainable economic growth and prosperity. 

Accordingly, I veto this bill.