Stagnant objections to minimum wage increases

While passage of an increase is uncertain, Iowans working at the minimum wage will have to get by with creativity, possibly working two jobs and needing work supports.

Heather Gibney, Research Associate
Heather Gibney

Dialogue about increasing the minimum wage is finally emerging in 2013. President Obama proposed an increase in the minimum wage to $9.00 per hour in his State of the Union address, and Senator Tom Harkin and Representative George Miller have introduced the Fair Minimum Wage Act of 2013 — which would raise the minimum wage from $7.25 an hour to $10.10. The Harkin-Miller bill would raise the wage in three steps of 95 cents before indexing it to keep up with the rising cost of living.

Iowa’s minimum wage now matches the federal. Raising it to $10.10 per hour would put nearly $6,000 more dollars in the pockets of Iowa families, and for the first time since the late 1970s a single parent with two children would be above the federal poverty level — a wage gap that we should have seen diminishing over time, but have not.

poverty vs min wage

Recognizing that the federal minimum wage is too low, 19 other states, including the District of Columbia have a higher minimum wage than the federal and 10 states annually increase their minimum to keep up with the rising cost of living. Unfortunately, attempts to raise the federal minimum wage and set automatic adjustments to keep pace with the rising cost of living have been hindered by bad economics. Beliefs that increasing the minimum wage will lead to job loss, that the majority of those benefiting would be teenagers and that it would decrease output for certain industries is the consensus among opponents, however unfounded. A recent report from the Center on Economic Policy and Research (CEPR) looked at the most influential research done on the minimum wage in the last 20 years and continuously found insignificant or no discernible effects feared — and promoted — by opponents of raises in the minimum wage.

While the passage of any of these proposals remains uncertain, Iowans working for the minimum wage will have to get by with their creativity; possibly working two jobs, relying on cash assistance and tax credits, going without those amenities that make life a little more enjoyable and hoping that one day they might join the middle class.

Posted by Heather Gibney, Research Associate

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s