Posted tagged ‘minimum wage’

Don’t take talkers’ comments at face value

October 2, 2015

The shameless way the public debate can be distorted never ends. Case in point: discussion about the minimum wage.

If you were in Eastern Iowa this morning listening to Simon Conway’s program on WMT-AM radio, you would not have an accurate idea of what happened in Seattle, Washington, following that city’s first step — to $11 — toward an eventual minimum wage of $15. Confusion on this issue has occurred in Johnson County, where supervisors have approved a $10.10 minimum wage by 2017.

Peter Fisher
IPP Research Director

What actually occurred, as Peter Fisher of the Iowa Policy Project has pointed out, is that job numbers rose in Seattle after the wage was raised. See his Aug. 25 guest opinion in the Iowa City Press-Citizen. Excerpt:

There is also misinformation flying around about Seattle, which took the first step toward raising the minimum wage to $15 in April of this year. What actually occurred is that overall employment in Seattle grew after the wage was raised. … The idea that restaurants closed because of the wage hike turned out to be a myth — the owners of the four restaurants in question reported that wages had nothing to do with their decisions.

New job numbers since then show jobs to be up in Seattle — both overall and in the restaurant and drinking places category — and both over the year and since the first step of the minimum wage increase. While it would be a mistake to suggest the minimum wage is responsible, the leisure and hospitality category alone shows a net gain of 1,100 jobs since the higher minimum went into effect.*

Much number-crunching is yet to be done to enhance understanding about how the Seattle increase is now affecting and ultimately will affect the labor market in that area. But the fact that the scare tactics have had little substance behind them has been pretty clear from early on. See this Seattle Times story. Or this story.

The lesson here is not that the minimum wage increase caused an increase in jobs in Seattle — but that it’s ridiculous to say it hindered jobs.

That is, of course, if you are at all interested in the facts.

Owen-2013-57Posted by Mike Owen, Executive Director, Iowa Policy Project
Learn more about Iowa issues with the minimum wage on our website,
* seasonally adjusted jobs, Washington State Employment Security Department.

Careful with the comments, Council Members

September 16, 2015

As the Solon City Council decides whether to back out of a Johnson County minimum wage increase, good information is available for comparison to recent comments by council members.

Peter Fisher of the Iowa Policy Project took a look recently at what a larger increase — to $15 — would do in Johnson and Linn counties. That report is here.

Separately, we have an Iowa Policy Project fact sheet available here on how Iowans statewide would be affected by an increase to $10.10, which is the level recently established by Johnson County supervisors to be phased in by 2017.

Findings of that research contradicts many comments by council members in Solon. For example, the minimum wage clearly is not, as one suggests, “for kids to go out and have some pocket money, that sort of stuff.”

In fact, the wage has been held so low for so long that it has become is part of a larger low-wage climate in our state, so that parents account for 1 in 5 of those who would be helped by a $10.10 minimum statewide. And almost half — 46 percent — of total family income in homes with a worker making less than $10.10 an hour comes from that job.

One council member ignores a lot of people in Iowa, very likely many of his own neighbors, when he suggests this is all about part-time work. More than 4 in 10 — 43 percent — of the workers who would benefit from an increase to $10.10 in Iowa are working full time.

Finally, an observation by a third council member is particularly noteworthy — that local restaurants are having trouble finding help. Wonder why that would be? Something about low pay, perhaps? How many more would be willing to work if pay were increased? How many more would be patronizing local businesses because they could afford to do so?

It is certainly up to the good people of Solon and their leaders to decide whether to go along with the new Johnson County ordinance, and by doing so to put pressure on the state to raise the state minimum. The latter, by the way, is what some council members are quoted that what they want to see: a statewide increase. Yet with no local pressure, is that really the message they send to state lawmakers who are holding Iowa’s minimum below that of 29 other states?

Whichever way they decide, however, they should be making the decision with good information, not discredited myths.

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

Why $15? Good reasons to consider it

August 12, 2015

There can be little question that Iowa’s minimum wage — like that of the nation — is too low.

At $7.25, it doesn’t come close to a living wage, yet the data show conclusively that in a significant share of households, income from a minimum-wage job is critical to the ability of a family to make ends meet. Plus, in Iowa it has stood at $7.25 since January 2008. An increase is long overdue.

Proposals for how much it should rise, however, are all over the map — literally. Not only do 29 states have wages at various levels higher than the federal minimum, but so do a growing number of cities. Even in Johnson County in Iowa, county officials are thinking of moving to $10.10 over the next 17 months.

In our new report, “The Case for a County Minimum Wage,” we look at the impacts on households of a $15 minimum wage in Johnson County and in Linn County. We find a benefit to over 43,000 workers.

Why $15? First, recognize that it is a conservative number. Had the wage been indexed to the growth in productivity since the late 1960s, it would be over $18 now. The graph below shows how the minimum wage, average wage, and productivity have changed from 1968 through 2014. The stark gap between both the minimum and average wages and the pace of productivity illustrates how income inequality has grown so rapidly — gains are not being shared with average or low-wage workers.


Basic RGBAnother reason to look at $15 is that it would be a significant step toward the wage needed for a basic-needs budget in many Iowa families. Our Cost of Living in Iowa analysis shows a married couple in Johnson or Linn County with one wage earner and one or two children needs a job paying $19 to $27 an hour just to pay for the basic costs of rent, utilities, food, child care, transportation, and health care. With two earners, each parent needs between $13 and $18 an hour. For a single parent, the budget math becomes more daunting, as child care costs must be paid out of a single paycheck. Now an hourly wage of $20 to $31 is needed.

Beyond the philosophical arguments about minimum wages, and speculation about whether a local minimum wage law will pass a court test in Iowa, these basic economic realities offer the context necessary to consider a minimum wage increase and to determine a meaningful level — whether adopted by a city, county, state or the U.S. Congress.

2010-PFw5464  Posted by Peter S. Fisher, Research Director of the Iowa Policy Project

On big issues, Iowa leaders emerging locally

July 23, 2015

If state leaders won’t lead, local leaders in Iowa are showing they will take up the job.

On three big issues in the last several months, we have seen this:

I don’t know about you, but I’m beginning to see a trend.

Public policy matters in Iowans’ lives, in critical ways. We elect people who can take care of it in a way that works for all Iowans, but not enough who will. In the absence of state-level leadership, it’s inevitable, perhaps, that local officials who also are hired to work for their constituents will find a way to help them.

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

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.


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.

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.


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

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.


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


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