Archive for the ‘Economic Opportunity’ category

New expectations on minimum wage

May 4, 2015

What, you won’t give us $10.10? OK, we’ll take $12.

Now, we’re talkin’!

At a time when progressive positions are compromised before they are given a chance to help the economy, boost family prosperity and lessen growing inequities, minimum-wage proponents have drawn the line at an unusual place in the sand: ahead of the one before.

It’s a bold stroke when the House and Senate leaders are against any increase in the current minimum of $7.25 an hour. The national minimum wage has been stuck there since July 2009 — and in Iowa even longer, since the state minimum rose and stopped there in January 2008.

Seven-plus years later, inflation has put minimum-wage workers in Iowa behind where they were in 2007 and 2008.

In 2013, Senator Tom Harkin of Iowa and Congressman George Miller of California teamed up to promote $10.10, calling $7.25 “unconscionably low.” But it has not happened.

Last week, Senator Patty Murray of Washington and Congressman Bobby Scott of Virginia introduced legislation to raise the minimum to $12 by 2020, in five steps. It also would eliminate the $2.13 tipped wage and index the new minimum to inflation.

Here’s an Iowa fact sheet, and here are reports from the Economic Policy Institute and National Employment Law Project.

150428-MWgraphic12

For some a $12 minimum wage will still sound too low. For some it will sound too high — which is why the debate retreated to $8.75 in Iowa this year, and that cannot even get a vote in the Iowa House.

Pushing the debate ahead to a place where it will affect more workers — 436,000 in Iowa, or 42 percent more than the 306,000 affected with a minimum at $10.10 — is where this needs to go. It may increase pressure to the point where we see more candidates taking a stand and votes taken in Washington and more state capitols.

Owen-2013-57Posted by Mike Owen, executive director of the Iowa Policy Project
Basic RGBThe Iowa Policy Project is a nonprofit, nonpartisan organization. IPP is a 501(c)3 organization and contributions to IPP are tax-deductible as permitted by law.

Avoid snap judgments on SNAP use

April 10, 2015

Legislators have enough to do finding answers to real problems. However, some seem ready to invent problems so they can come to the rescue.

Case in point: the Missouri representative who wants to stop food assistance recipients from buying steak.

Photos, please, of this actually happening. Because common sense tells us that other than some unusual case or two, it’s just not the way people allocate their meager food assistance benefit.

Why? Let’s look at the average benefit in Iowa from SNAP — the Supplemental Nutrition Assistance Program, formerly known as Food Stamps.

People who qualify for SNAP are making less than $2,200 a month in a three-person family, about $2,600 in a four-person family. On average, their SNAP benefit as of March was about $1.18 per person per meal. That’s why they call it “supplemental” assistance: On its own, SNAP is not enough to keep bellies full, let alone fully support good family nutrition.

SNAP is there to help people piece together what they need to get by. SNAP is part of a mix of resources that includes a share of a low-wage family’s own earnings, and probably the help of a local food pantry.

During the Great Recession, SNAP clearly helped Iowans. In our slow recovery from the last national recession, the number of SNAP recipients rose to over 423,000. As things have gotten better, that number has steadily fallen and was under 393,000 as of last month — a decline of 7 percent. That’s the way it is supposed to work.

But for those who still need it, SNAP is there. This critical point should not be missed by distractions like the bill in Missouri, or others that may crop up — even in our state.

The fact that SNAP exists says more about us as a nation than do snarky shoppers who stalk the poor in the checkout line.

Do we really want people who don’t even believe in SNAP to nitpick what people can buy with it? Because those are often the people attempting to call the shots on what goes in the shopping cart.

I’m not buying what they’re selling. They can check my cart.

Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project
 Hear Mike Owen and KVFD’s Mike Devine discuss this issue in this April 9 interview.

Basic RGB

Keeping Ahead of the Kansans

April 9, 2015

As state legislators consider drastic cuts in Iowa’s income tax, they would do well to consider the experience of our neighbor Kansas, which enacted a huge income tax cut in 2012, and cut taxes again in 2013. These cuts have dramatically reduced state funding for schools, health care, and other services.

It is instructive to consider as well the experience in Wisconsin, where a large personal income tax cut took effect at the start of 2013, with similar results: subsequent job growth of 3.4 percent, farther below the norm than Kansas’ 3.5 percent from the implementation of its tax cuts.

None of this should come as a surprise. Most major academic research studies have concluded that individual income tax cuts do not boost state economic growth; in fact, states that cut income taxes the most in the 1990s or in the early 2000s had slower growth in jobs and income than other states.

Businesses need an educated workforce, and drastic cuts to education are likely to make it difficult to attract new workers, who care about their children’s schools at least as much as they care about taxes.

2010-PFw5464Posted by Peter Fisher, Research Director, Iowa Policy Project

See Fisher’s Iowa Fiscal Partnership Policy Snapshot on this issue.

 

Basic RGB

Maximum focus on minimum wage

April 1, 2015

There are lots ways to look at the minimum wage issue. Some make sense, and some do not. There are good numbers and bad numbers, the latter usually tainted by ideology or politics.

Any discussion about the minimum wage in Iowa — whether on the floor of the Iowa House or Senate, or outside the Capitol in any coffee shop or street corner — should focus on the clear, central realities of this issue, with reliable and credible numbers.

How much?

Iowa’s first minimum wage passed in 1989, almost half a century after the first federal minimum wage of 25 cents an hour took effect in 1938. That first Iowa minimum wage was phased in over three years.

So the minimum wage has long been established in public policy as a floor for wages. But it’s a sinking floor.

  • The wage has not been increased in Iowa since January 1, 2008, when it went to $7.25.
  • Had it kept up with inflation since 1992, the Iowa minimum wage would now be $7.91 (February 2015).

The latter shows just how conservative is the legislation pending in the Iowa Senate. A minimum wage bill would raise the wage to $8 in July — about where it would be had the original state minimum been indexed to inflation in 1992 — and bump it to $8.75 a year later. Given that this issue is only rarely reviewed in the Legislature and that the wage is not indexed, it would not take long for inflation to catch $8.75 and certainly we’d be seeing another debate in a few years.

The $8.75 proposal from the Senate is a considerable compromise from the $10.10 federal minimum proposed a couple of years ago by Senator Tom Harkin and President Obama, and from the $15 sought by people trying to bring the minimum closer to a “living wage.”

For whom?

An increase to $8.75 would benefit:
•   12 percent of Iowa workers
•   112,000 Iowa workers directly*
•   69,000 Iowa workers indirectly*
•   181,000 Iowa workers in total — about 3 1/2 times the number of people working at the current minimum.

150205-MWgraphic

The minimum wage matters

No matter the politics, what no one can deny is that the minimum wage is not enough — not nearly enough — to get by. Many Iowa families in Iowa depend greatly on that wage.

When minimum-wage workers account on average for 44 percent of their family income, it is certain that any increase will benefit a large number of Iowa working families.

Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project

 

* Estimates from Economic Policy Institute. Indirectly affected workers have an hourly wage just above the proposed minimum wage. They would receive a raise as employers adjusted pay scales upward to reflect the new minimum wage.
See our two-page fact sheets on:

Iowa impact of $8.75 minimum wage

Iowa impact of $10.10 minimum wage

Basic RGB

Beyond politics: Teacher pay in context

March 4, 2015

Funding for Iowa schools has been under discussion for nearly the entire legislative session. The Iowa House has one version of a funding bill and the Iowa Senate has one with a higher funding level. Schools use their money for a variety of things that support the education of students from kindergarten to the senior year of high school. One obvious part of funding is teacher salaries.

During debate at the Capitol, State Representative Greg Forristall called for a salary freeze for teachers. According to Iowa Public Radio, Forristall stated in the Education Committee that farmers are expected to make 30 percent less in this coming year. “Maybe this is the year that teachers could accept last year’s salary,” he said.[1]

Also according to Iowa Public Radio, the speaker of the Iowa House, Kraig Paulsen, said teachers are bargaining for raises that cost too much money.[2]

So how have salaries changed over the years in Iowa? The National Center for Educational Statistics gathers average annual salary for teachers in public elementary and secondary schools by state going back to school year 1969-70.[3]

In that year salaries for Iowa teachers converted to present dollars averaged $51,170. In the school year 2012-13, the most recent figures, the same average teacher earned $51,528. That’s a difference of only $360 over almost 45 years.

Put another way: The Mrs. Brown or Ms. Green who taught you was paid about the same as your kid’s teacher gets today.

Secondly, Iowa average salaries are below the national average of $56,383.

Iowa teachers could go over our northern border and earn almost $5,000 more in Minnesota. On the other hand, South Dakota teachers on average earn $12,000 less. (South Dakota teachers even make less than teachers do in Mississippi.) Iowa is near the middle of average salaries for all teachers compared to other states.

When it comes to starting teacher salaries, however, Iowa ranks 33rd in the nation at $33,226.[4] We are similar to Wisconsin and Kansas. We are below Illinois and Minnesota as expected. What is surprising is that starting salaries here are almost $3,000 below Alabama and even lower than in Texas.

The disagreement in funding for schools includes many aspects. Before one should believe that teachers have bargained for too much or need a pay freeze, it might be good to look at this data.

[1] http://iowapublicradio.org/post/republican-lawmaker-freeze-teacher-salaries
[2] http://iowapublicradio.org/post/paulsen-teacher-raises-too-big
[3] http://nces.ed.gov/programs/digest/d13/tables/dt13_211.60.asp
[4] http://www.nea.org/home/2012-2013-average-starting-teacher-salary.html
IPP-osterberg-75Posted by David Osterberg, Co-founder of the Iowa Policy Project

What happens at $8.75 in Iowa?

February 24, 2015

There are serious competing ideas in Iowa about the minimum wage — whether to raise it, and by how much. Iowa lawmakers are currently discussing the issue; the Governor is staying out of it.

What cannot be denied is that the minimum wage is not enough — not nearly enough — to get by, and that regardless of political spin to the contrary, there are many families in Iowa whose household budgets depend greatly on that wage. Any increase will benefit a large number of Iowa working families.

We have illustrated with data from the Economic Policy Institute (EPI) how an increase to $10.10 from the current $7.25 would affect Iowans. That two-page piece is here. That proposal would raise the hourly wage for an estimated 306,000 Iowans (216,000 directly, and 90,000 indirectly*).

A proposal in the Iowa Senate would raise the wage by a smaller amount, to $8.75. Again with analysis from EPI, below is what could be expected if the wage were raised to $8.75 in July 2016. Compared to the current $7.25, the new wage would affect:

•   12 percent of Iowa workers
•   112,000 Iowa workers directly
•   69,000 Iowa workers indirectly*
•   181,000 Iowa workers in total — about 3 1/2 times the number of people working at the current minimum.

150205-MWgraphic

More impacts are shown in the adjacent graphic. EPI projects increased wages of $147 million and increased economic activity (GDP) of $93 million.

There are those who dismiss the minimum wage as a minor issue. They are wrong, and the numbers show this.

* Workers affected indirectly have wages slightly above the proposed minimum and will be affected as pay scales adjust.
Owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project

Beyond Battelle: Let’s broaden the dialogue of Iowa economic health

January 14, 2015

As Iowa legislators this week start work on a course to a more robust and diversified economy, discussion already has focused on a new privately funded report, Iowa’s Re-Envisioned Economic Development Roadmap.[1]

Produced by Battelle Technology Partnership Practice and commissioned by the Iowa Partnership for Economic Progress,[2] the $400,000 report makes some important points and deserves a careful look.

It focuses heavily on the importance of business to promote economic activity, but its core message acknowledges the significant role of public investments in providing the foundations for Iowa’s economy. This includes the education system needed to develop the skills, talents and capacity of the current and future workforce, including those who will become the future entrepreneurs and leaders for the 21st century.

While the report acknowledges the centrality of an educated and skilled workforce and a high quality of life to making Iowa an environment for business to flourish, it places very little focus upon how government can deliver on that role. It falls to government to educate that future workforce — at the early childhood, primary and secondary, and higher education levels.

The report does not adequately address the challenges Iowa faces in creating that higher skill level among its emerging workforce — in particular, the need to address lagging and stagnant educational achievement. To do so takes resources, and the report’s emphasis is to leave in place a business subsidy structure that has increasingly reduced the state’s ability to meet those needs.

The report itself was overseen largely by business leaders and economic development agency staff. However, these are not the only stakeholders in Iowa’s economic future; many others need to engage in the dialogue about Iowa government’s role in economic development.

The Battelle Report raises one perspective on economic development. Lawmakers, the media and the public need to insist that other perspectives and expertise also are fully considered and vetted.

More Iowans need an invitation to the table.

08-Bruner-5464Charles Bruner is executive director of the Child & Family Policy Center, www.cfpciowa.org, part of the Iowa Fiscal Partnership, www.iowafiscal.org.

Note: This piece also ran as an “Iowa View” in The Des Moines Register, Jan. 14, 2015.

[1] Technology Partnership Practice, Battelle Memorial Institute, December 2014, “Iowa’s Re-Envisioned Economic Development Roadmap.” http://www.iowaeconomicdevelopment.com/battelle
[2] Iowa Economic Development Authority, News release, Dec. 18, 2014, “Governor, IPEP Release Findings of 2014 Battelle Report, a New Economic Development Roadmap for Iowa,” http://www.iowaeconomicdevelopment.com/newsdetails/6051

Follow

Get every new post delivered to your Inbox.

Join 3,406 other followers

%d bloggers like this: