What happens at $8.75 in Iowa?

What cannot be denied is that the minimum wage is not enough — not nearly enough — to get by. Any increase will benefit a large number of Iowa working families.

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

Author: iowapolicypoints

Iowa Policy Points is a blog of Common Good Iowa, a new organization built on a collective 50 years of experience of two respected Iowa organizations — the Child and Family Policy Center and the Iowa Policy Project. Learn more at www.commongoodiowa.org.

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