Today’s virtual House graphic: minimum wage boosts families

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Often lost in the spin surrounding debates over the minimum wage is the reality of who benefits. As indicated in the graphic above, the typical talking points promoted by the business lobby fall through the cracks — the same way many people attempting to support their families fall through the cracks due to Iowa’s current minimum wage policy. The illustration above outlines the demographic makeup of over 300,000 workers who would benefit if Iowa raised its minimum wage to $10.10. Four counties have moved to go that high, or higher, between now and 2019 under ordinances already passed.

There is no pending legislation to raise Iowa’s paltry $7.25 state minimum wage — and, in fact, choices being made in the Legislature effectively will render that state law meaningless. That is because local minimum wages are targeted for repeal and the Senate majority leader has indicated he will not entertain any legislation to raise the state wage, leaving that issue up to Congress, which shows no sign of action, either.

For more about the minimum wage in Iowa, both statewide and locally, visit this page on the IPP website.

Editor’s Note: The Iowa House of Representatives now denies the ability of lawmakers to use visual aids in debate on the floor. To help Iowans visualize what kinds of graphics might be useful in these debates to illustrate facts, on several days this session we are offering examples. In today’s graphic, we illustrate the impact of a statewide minimum wage increase. Previous “virtual House graphics” illustrate impacts of local minimum wages approved in counties where wages higher than the statewide $7.25 has been approved.

Tax credit reform, yes — but what kind?

Optimism for tax-credit reform must be tempered. There is a great opportunity; there also are pitfalls.

Reform of business tax credits in Iowa is long overdue, so the natural instinct is to welcome with open arms the interest of state legislators in a review of Iowa’s runaway spending on tax credits.

Yet, optimism must be tempered. There is a great opportunity; there also are pitfalls.

Fooled us once

Iowa’s last look at tax-credit reform came in the wake of scandal in its film industry tax credit program. Despite a strong report with potentially game-changing recommendations from a special task force of state agency heads in 2010, not much came from the Legislature. As we noted then, legislators acted with fierce caution that no doubt sent the business lobbyists off to celebrate.

That time, the review resulted from a scandal of law and ethics. What remained, and remains today, is a scandal of fiscal ignorance and arrogance. Iowa’s spending on business tax breaks has soared in recent years, and this budget choice has been a contributing factor to the stagnant or declining commitment to public responsibilities: education, the environment, health and public safety.

Fool us twice?

Such skepticism should be understandable not only with the anti-bargaining and anti-worker legislation Iowans have seen in this session, but with comments by legislators. In one shot across the bow, Rep. Pat Grassley stressed legislators would put everything on the table, including the Earned Income Tax Credit (EITC), which benefits low- and moderate-income Iowans.

Past study already has shown that, unlike Iowa’s most lucrative business tax credit, the Research Activities Credit:

•   the EITC has obvious benefits to the economy and Iowa working families.

•   the EITC benefits only people who need the help, where RAC is unlimited and in fact benefits some of the most profitable companies in the country.

•   the EITC benefits people when Iowa’s regressive tax system is otherwise stacked against them, where the RAC benefits those who already do well by Iowa’s tax code.

Already we know that the individual state and local tax system in Iowa — all effectively governed by state law — demands that people at the bottom of the income scale (actually the bottom 80 percent) on average pay 10 percent of their income in tax. At the same time, the wealthiest and most well-connected pay much less — 6 percent at the very top.

Already we know that Iowa’s total state and local taxes on business — again, all effectively governed by state law — are below the national average and by one national business consultant’s measure are among the lowest in the nation.

In a nutshell, heading into this discussion, beware the false equivalencies and more of the same business-lobby spin that has produced the unaccountable and unfair system that makes it difficult to fund critical public services.

And be sure we do not lose some important pieces now in place, including the transparency we have on the RAC with annual reports from the Department of Revenue.

We have called for reform and better oversight for years. If legislators are serious about it, this could be a good thing. If it is merely cover to further burden the poor, reduce transparency, or heap new breaks on corporations that do not pay their fair share, it could be one more step in Iowa’s low-road march to the bottom.

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

mikeowen@iowapolicyproject.org

Less government means ‘less us’

Because government means “us,” less government means “less us.” It almost always means more corporate interest, not public interest … and … more inequality, injustice, and disparity. Worst of all, it means fewer public services.

Imagine new occupants of a large historic building who decide to do a major remodeling project, and they do not take the time to learn how the building was built and what previous structural changes were done to the building. They tear into this column, that wall, or that beam, without thinking that these are indeed load-bearing walls and beams that keep the building standing.

The remodeling fever we are seeing in Washington and the Statehouse involve trashing all things public: public schools, public services, public health, and public employees — the load-bearing foundations of democracy and daily life.

The most meaningful insight I gained from serving on the City Council involved learning the functioning of government at the community scale: police protection, fire protection, water, sewer and inspection services, planning services, utilities, arts and cultural services, a fantastic library, community center, great schools and services for children with special needs. I get up every morning thinking about these public services and the people who make them happen, and I am grateful.

That is why I find it astonishing that so many people continue to fall for the falsehood that “government is bad.” Many of us immigrants have come from countries that have fallen apart in violence and disorder in the absence of a functioning government. Thousands of U.S. troops have died to establish a decent governing process in Iraq and Afghanistan, but here at home, we are told government is bad, private-everything is good, corporations are the greatest, and all things public are bad. Do our troops serving in Afghanistan know about the rush to diminish government at home?

Because government means “us,” less government means “less us.” It almost always means more corporate interest, not public interest, making decisions for us, and invariably leads to more inequality, injustice, and disparity. Worst of all, it means fewer public services. We have heard “government should be small,” but why have we not heard “corporations should be small and their influence on government limited?”

Less self-governance, providing fewer services, has produced results: contaminated eggs sickening thousands and contaminated meats killing children because we have not inspected and protected our food supply. Inspection services supposedly are “too much regulation.” Toxic releases, polluted air, contaminated drinking waters, the national financial crisis are all clear and predictable results of “less regulatory burden,” “less government” and more corporate irresponsibility.

Let us not forget that our properties, our lives, our neighborhoods, and our businesses are richer and better because there is police and fire protection, law, order, a system of fair courts, and regulations. We are better off because we are situated in and are beneficiaries of a publicly organized infrastructure that offers basic services to all, including protecting Iowa’s commonwealth which provide ecosystem services such as clean air and clean water. Public works.

While the process of governing ourselves is not perfect and can be improved, “less government” is no improvement. We are the lucky beneficiaries of many generations before us who gave so much to build this nation, but, as many of us immigrants know, democracy and self governance are highly perishable. They are not something we have, but something we have to make every day and nurture through our involvement. Like a garden, you have to tend it.

kamyar-enshayan5464300Kamyar Enshayan served on the Cedar Falls City Council from 2003 to 2011. Enshayan is director of the Center for Energy and Environmental Education at the University of Northern Iowa, where he teaches environmental studies. He has been a member of the Iowa Policy Project board of directors since July 2016.

Virtual House graphic: Closer look at who gains with local raises

Well over half of those benefiting from local minimum-wage increases are women, workers over age 20, and full-time workers.

Basic RGBAs we have shown, about 85,000 Iowa workers stand to gain from local minimum-wage increases in Linn, Johnson and Polk counties when they are fully phased in as scheduled in 2019. As we show above, the beneficiaries are not who minimum-wage proponents typically attempt to portray in dismissing the importance of the wage.

Well over half are women, workers over age 20, and full-time workers. These are jobs that are essential in meeting household budgets.

Iowa’s minimum wage is $7.25, where it has stood for over nine years. Johnson, Linn, Polk and Wapello counties have passed increases scheduled to reach between $10.10 and $10.75 by 2019.

For more about the minimum wage in Iowa, both statewide and locally, visit this page on the IPP website.

Editor’s Note: The Iowa House of Representatives now denies the ability of lawmakers to use visual aids in debate on the floor. To help Iowans visualize what kinds of graphics might be useful in these debates to illustrate facts, on several days this session we are offering examples. In today’s graphic, we illustrate the impacts of local minimum wages that have been approved in Iowa. We focus on three of the four counties where wages higher than the statewide $7.25 has been approved. In the fourth county, Wapello, the impact has been blunted by the refusal of the city of Ottumwa to go along with it.

Today’s virtual House graphic: Iowa impact of ACA repeal

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Yes, whatever actions are taken on the Affordable Care Act will come from Congress, but state legislators may be left to pick up the pieces. Iowa legislators, are you paying attention? Are you talking to your federal counterparts about this? (Some are in the state this week.)

What many may not know is the impact the ACA has had on reducing the uninsured population in Iowa. The Medicaid expansion under the ACA is one of the big reasons we have seen a greater share of the Iowa population covered by either public or private insurance.

For more information on how the ACA has affected uninsurance in Iowa — and the stakes of repeal without an adequate replacement — see Peter Fisher’s policy brief, Repealing ACA: Pushing thousands of Iowans to the brink.

Editor’s Note: The Iowa House of Representatives now denies the ability of lawmakers to use visual aids in debate on the floor. To help Iowans visualize what kinds of graphics might be useful in these debates to illustrate facts, on several days this session we are offering examples. Here is today’s graphic, to illustrate the impact on Iowa, and potentially on state finances and responsibilities, if the federal Affordable Care Act is repealed.

Today’s virtual House graphic: The real business of business taxes in Iowa

The secret is out: Iowa’s business taxes are low

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One of many measures showing Iowa to be low or in the middle of the pack on business taxes is a study by the business consulting firm Anderson Economic Group. In its 2016 business tax rankings, Anderson ranked Iowa business taxes fourth-lowest.

In that analysis, Anderson looked at 11 taxes on business, and examined more than tax collections, but also how taxes paid by business compared to income available to pay the tax. Anderson said it used “taxes paid as share of profits, as this measure directly compares taxes paid to business income available to pay the tax.”

In fact, by the Anderson measure, Iowa ranks below all of its regional neighbors except South Dakota, which is lower only by one-tenth of a percentage point.

This finding is not unusual despite claims from the business lobby about Iowa taxes on business, as we have shown before. The latest examination by a widely known business accounting firm, Ernst & Young, puts Iowa state and local business taxes in the middle of the pack and below the national average, at 4.5 percent of private-sector GDP.

Editor’s Note: The Iowa House of Representatives now denies the ability of lawmakers to use visual aids in debate on the floor. To help Iowans visualize what kinds of graphics might be useful in these debates to illustrate facts, on several days this session we are offering examples. Here is today’s graphic, to illustrate where Iowa rates vs. other states, by responsible measures, on business taxes.

Today’s virtual House graphic: Who gains with local raises

Local power to raise the minimum wage allows higher-cost-of-living communities to adopt wages that better match their housing and living costs.

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About 29,000 Iowa workers have already seen pay raises because the supervisors in Johnson and Linn counties enacted a local minimum wage, held at a mere $7.25 statewide for over nine years. That number will more than double to 65,000 come April, when the first step of the Polk County minimum wage takes effect.[1] By January 2019, when wage rates in all three counties will top $10.10, about 85,000 Iowa workers will be enjoying a substantial increase in their pay.[2]

All of those wage gains will be rolled back if a bill under consideration in Des Moines is passed and signed into law. House File 295 would prohibit counties from enacting any law that sets standards for wages, benefits, scheduling, or other employment practices that are higher than state law. It would also nullify the wage ordinances already enacted in four counties where the elected representatives took action to help low-wage workers in the face of nearly a decade of state inaction.

Who are the workers who have gained, or who will gain, these pay raises? They are disproportionately women (56 percent) and disproportionately non-white (20 percent), compared to the overall population shares. Only 1 in 6 is a teenager; 31 percent are age 40 or older, while 53 percent are age 20 to 39. Almost three-fifths work full time, while only 13 percent work 20 hours per week or less. Of the workers seeing a bigger paycheck, 31 percent are parents.

Iowa is a low-wage state in an increasingly low-wage economy. In 2016, the median wage (half of Iowa workers earn less than that, half earn more) was $16.04 an hour, just 13 cents higher than it was in 1979 when adjusted for inflation. Since that time, worker productivity has risen 167 percent, but the gains from that greater productivity have not gone to workers. Minimum wage increases are one of the most important ways of ensuring that the gains from economic growth are widely shared instead of being captured by the richest 1 percent of households.

Local power to raise the minimum wage allows higher-cost-of-living communities to adopt wages that better match their housing and living costs. Local, democratically elected boards have passed laws overwhelmingly supported by Iowans that are raising the wages of about 85,000 Iowa workers, helping not just those workers and their families, but local economies dependent on their spending.

[1] The Johnson County minimum wage rose to $10.10 in January, 2017, and increases by the rate of inflation after that. The first step of the Linn County wage to $8.25 also took effect in January, and the last step, to $10.25, is scheduled for January 2019. The Polk County minimum becomes $8.75 April 1, and rises to $9.75 January 2018 and then $10.75 January 2019.

[2] A county minimum wage was also enacted in Wapello County, but the city of Ottumwa, home to most of the jobs in the county, nullified it within the city by enacting their own ordinance leaving the wage at the state level. We do not include any estimates for Wapello County in our figures. In Johnson and Linn counties, a few small towns have also enacted ordinances establishing minimum wages below the county level, but few jobs are affected. The number benefiting from the higher minimum wage includes all those projected to be earning less than that wage as of the year the minimum goes into effect (about 65,000 workers), as well as those whose wages are a little above the new minimum but who can be expected to get a raise in order to retain parity within a business or in order to remain competitive in the labor market (another 20,000).

2010-PFw5464Posted by Peter Fisher, research director of the Iowa Policy Project
pfisher@iowapolicyproject.org

Editor’s Note: The Iowa House of Representatives now denies the ability of lawmakers to use visual aids in debate on the floor. To help Iowans visualize what kinds of graphics might be useful in these debates to illustrate facts, on several days this session we are offering examples. Here is today’s graphic, to illustrate how many Iowans are gaining from locally approved minimum wages.