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Economist warns thousands of Virginia jobs at risk after minimum wage hike signed by Spanberger
By Joshua Nelson
Published April 16, 2026
An economist is warning that Virginia’s recent minimum wage mandate won’t help the state with affordability as it is intended and could lead to thousands of jobs being cut.
"I think something that we've seen in coverage of this bill and how this law in Virginia was that this is something that needed to be done to improve affordability for Virginians," Rebekah Paxton, the research director of the conservative Employment Policies Institute, told Fox News Digital on Wednesday.
Paxton explained during the interview that businesses will be forced "to find room in their operating costs to make those numbers work."
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Virginia Gov. Abigail Spanberger signed a new law that raises the minimum wage in the state to $15 an hour. (Mike Kropf/Getty Images)
"They have to decide, because the cost of labor has now gone up over just a few years — Do I have to reduce the number of positions? Do I need to shorten the number of hours I'm giving the people I have on staff? Do I have to raise prices to try to accommodate the difference in labor costs? Because just because the minimum wage is going up doesn't mean their sales are increasing by default," she said.
Virginia Democratic Gov. Abigail Spanberger, who campaigned on affordability, signed a law in April that would incrementally increase the state minimum wage to $15 per hour. Spanberger called the legislation "a win for the businesses that call Virginia home."
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The affordability crisis has recently made headlines and was addressed on the federal level after lawmakers aimed to help Americans with housing, groceries and healthcare costs. (iStock)
"Today, we are putting more money in the pockets of Virginia workers," Spanberger said. "If you work full-time in Virginia, you should be able to afford to live in Virginia. You should be able to keep up with your rent or mortgage, fill your medications, and save for your kids’ futures."
Spanberger's office did not respond to Fox News Digital's request for comment.
Spanberger joins several other local and state leaders mandating a minimum wage or considering the policy amid a nationwide debate over combating affordability problems. In some cities, advocates are pushing for a $30 minimum wage mandate.
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The Employment Policies Institute released a study in 2022 claiming that 12,000 jobs would be lost if Virginia raised the minimum wage. Now that the mandate is a reality, Paxton warns of dire consequences.
The think tank estimated that the Democrats' plan of an incremental wage increase for hourly workers from $12.77 to $13.75 next year and to $15 in 2028 will increase service-industry operating costs.
The Virginia Capitol is seen across a body of water in Richmond, Virginia, on Feb. 9, 2019. (Drew Angerer/Getty Images)
"We're also looking at sort of how red states deal with minimum wage hikes versus Blue states. And we find kind of across the board, it doesn't matter," Paxton said.
"Essentially, when the minimum wage goes up, alongside a lot of other costs that are going up for businesses, restaurants in particular, retail that have the most minimum wage workers, they have to make tough choices," she added.
Spanberger's office sent Fox News Digital the following statement.
"Nearly 80 percent of Virginians support Governor Spanberger’s decision to incrementally raise the minimum wage to $15 per hour — and was proud to work with groups like the Virginia Farm Bureau to strike a balance that’s good for both businesses and workers," a spokesperson said.
"The Governor has signed dozens of bipartisan bills to support economic growth, and she will continue working with both parties to take commonsense steps to attract new business investment to the Commonwealth and make life more affordable for Virginia families."
According to a poll released this year from Christopher Newport University, a large majority of Virginians support increasing Virginia’s minimum wage to $15 an hour by 2028.
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