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State lawmakers should pause and amend key legislation to help businesses amid crisis

State lawmakers should pause and amend key legislation to help businesses amid crisis
State lawmakers should pause and amend key legislation to help businesses amid crisis
State lawmakers should pause and amend key legislation to help businesses amid crisis
Expert Column by Bryan K. Stephens

As we enter another week of Virginia’s state of emergency related to containing the spread of the coronavirus, COVID-19, Virginia is facing an economic crisis in unprecedented proportions.

While we had serious concerns about several pieces of legislation during this year’s General Assembly session, the negative impact these bills will have on our business community is even more serious considering the economic devastation many businesses are facing.

The Hampton Roads Chamber is unapologetically pro-business, and we have been laser-focused on advocating on behalf of businesses’ interest. We, along with other pro-business organizations, recently requested the governor delay for at least a year the following legislation enacted during the session to give Virginia’s businesses, large and small, an opportunity to recover, rehire employees, and restore their customer base before taking on more government mandates.The April 22 reconvened session allows our legislators an opportunity to address the needs of the business community to ensure their survival. Here are some examples.

Minimum wage increase: These bills increase the minimum wage by 31% in just the first year, starting just nine months from now. Raising the minimum wage also has the effect of pushing up other wages.

The problem is that when you raise the cost of creating something, you get less of it. That includes creating and restoring jobs at precisely the time we need them most. Small and mid-sized businesses will have to decide between hiring back fewer people, reducing benefits, or just going out of business.

Collective bargaining: This bill increases the state and local tax burden on individuals and businesses. The National Institute for Labor Relations Research found that, in the 17 states with the most heavily unionized public sectors, their tax burden was 26% higher than in the 17 states where government union bosses have the fewest workers in unions.

It also raises the cost for taxpayers, as shown in a 2016 study by the Heritage Foundation, which reported that a state passing government sector bargaining increases the average annual tax burden by $3,000 for a family of four.

Rising construction cost: Two additional bills would raise the cost of public construction projects. Project labor agreements discourage non-union contractors and subcontractors (98% of Virginia’s construction industry) from competing to build taxpayer-funded projects. A study comparing school construction projects demonstrates that project labor agreements raise school construction costs by 18%. They particularly impact non-union minority contractors, which is why the National Black Chamber of Commerce opposes them.

All of these bills — and more — were passed by the General Assembly in an economic environment much different than what we see now. The unforeseen circumstances of the COVID-19 virus are negatively affecting businesses in an extreme manner. The chamber is hopeful that with amenability from the General Assembly members, we will be successful in mitigating some of the damage to our businesses.

Bryan K. Stephens is the president and CEO of the Hampton Roads Chamber.

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