Recruiting minimum-wage jobs?

These folks really need to get their stories straight. Do they want to recruit low-wage employers?

For some time, we’ve seen Iowa House Speaker Linda Upmeyer defend inaction on a state minimum wage increase with the excuse that they’re focused on better paying jobs.

Now, many lawmakers and the business promotion groups of the Iowa Chamber Alliance are zeroed in on making sure no county or city officials should act locally to correct an indefensibly low state minimum wage of $7.25.

These folks really need to get their stories straight. It appears their real interest may be in recruiting low-wage employers.

In Saturday’s Cedar Rapids Gazette, Cedar Rapids Metro Economic Alliance policy strategist Barbra Solberg says “it’s hard for recruiting purposes to tell a company that we have 65 different minimum wages throughout the state.”

Well, which is it? Are we focused on high-paying or at least living-wage jobs, or are we actively recruiting companies that will pay the minimum wage? And how much is the Alliance hoping to give away to those companies with the “full funding” it wants for tax breaks? How much will Iowans pay for low-wage jobs?

While we’re at it, what is this nonsense about “65 different” minimums?

Four counties — not 65 — have embraced the demands of leadership and acted to raise local minimums, phasing in increases to between $10.10 and $10.75 from Iowa’s 9-year-old minimum wage of $7.25.

The Alliance does not even suggest an increase — only keeping it the same statewide “regardless of what it would be,” Solberg says. While the wage has remained stagnant, business tax credits have roughly tripled over that time.

Iowa needs a more responsible statewide wage, but local wage markets can easily justify setting that higher — as elected officials in four counties have determined is necessary to promote their local prosperity.

If uniformity is such a concern, is the Quad Cities Chamber pushing for the state of Iowa to raise the wage to Illinois’ level — $8.25 — or to Nebraska’s $9, since a statewide uniform wage is the Iowa chambers’ goal? Or are the Iowa chambers just happy to compete for the lowest wage jobs and to let Illinois and Nebraska and South Dakota ($8.55) and Minnesota ($9.50) get the better paying ones?

For an illustration of real-world ingredients of prosperity, see the analysis here by Peter Fisher of the Iowa Policy Project: http://www.gradingstates.org/the-real-path-to-state-prosperity/

A smart, high-road approach would start there, and get Iowa off the race to the bottom. Our track is already paved with excessive, costly and unaccountable tax breaks, weak services and increased poverty. We don’t need more of any of that.
owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project
Contact: mikeowen@iowapolicyproject.org

 

 

An opportunity for a productive, fair agenda

A good place for the new governor to start is establishing transparency and accountability with reforms of tax credits and other tax expenditures.

Congratulations to Governor Terry Branstad on his nomination as ambassador to China and to Lieutenant Governor Kim Reynolds for her coming role as Governor of our state.

This is a tremendous opportunity for the new Governor to start marking her clean slate with a productive and fair agenda that advances opportunity for children and families, protects the vulnerable and enhances our quality-of-life assets of clean air, clean water, and cultural enrichment.

A good place to start is establishing a new regime of transparency and accountability in state spending with a reform agenda for tax credits and other tax expenditures — something she may embrace as a former county treasurer. Important decisions are being made in the shadows in the Iowa State Capitol. Our incoming Governor has an opportunity to bring them out into the open.

With this type of reform, we may find there are in fact adequate revenues to again cultivate Iowans’ long-held commitments to education, to our safety net, to our environment, and to fairness and safety in the workplace.

At the Iowa Policy Project, we welcome inquiries from the new Governor and her staff about our research. May they — like Iowans around the state — find it to be a credible and reliable resource to better understand our public policy choices.

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

Contact: mikeowen@iowapolicyproject.org

Iowa can win the race to the bottom

However fascinating this experiment may be, make no mistake: People will be hurt.

Basic RGBIn the race to the bottom, all signs indicate that Iowa can beat the competition.

Yes, Iowa has a chance to shed hard-fought achievements toward respect for working families and compassion for the vulnerable. The coming two years will be fascinating if for no reason other than to see how much further we can fall behind, on wages and income, workplace protection, work supports such as child care and health care, and protection and enhancement of our land, air and water.

But however fascinating a low-road experiment may be, make no mistake: People will be hurt. These are Iowans. They are young people who could be our future if we were to invest properly in them. They are middle-aged parents struggling to support families. They are seniors who watch with trepidation as national political games are played with Social Security and Medicare, and as state politicians claim their earned, negotiated pensions are excessive.

The coming threat is to our civic fabric of public education. It is a threat to a safety net that protects individuals and can advance them toward their dreams.

An exaggeration, you say? Have you examined the policy goals of ALEC, the shadowy American Legislative Exchange Council, in which Iowa’s new legislative leadership are entrenched leaders? We at IPP have looked at ALEC. Its agenda is a recipe for fiscal instability and economic stagnation.

ALEC promotes tax cuts and tax structures that benefit the wealthy and corporations, even more than they do now. ALEC would erase already inadequate regulations of private industry that protect workers, communities, and public health.

Iowans, are you hoping for sustainable funding for public schools? A meaningful minimum wage increase? Regulation of polluters, or of unscrupulous employers who steal wages? Are you kidding?

These need to be our priorities. They are not the coming agenda.

The lobby of the Iowa State Capitol is littered with promises that remain unfulfilled. Special-interest forces have successfully put tax breaks and corporate welfare ahead of traditional, responsible approaches to a public infrastructure that serves all Iowans, not just the well-heeled and well-positioned few.

These forces have emerged from an era of divided government, and now they threaten to run the table. The 2017 race to the bottom already has begun. Do we really want to win it?

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

Contact: mikeowen@iowapolicyproject.org

IPP News: Scant progress against Iowa water pollution

FOR IMMEDIATE RELEASE THURSDAY, NOV. 17, 2016

Full report
Two-page executive summary

Scant progress against Iowa water pollution
New report examines water quality in Iowa and Mississippi River Basin

IOWA CITY, Iowa (Nov. 17, 2016) — Despite voluntary conservation efforts under Iowa’s Nutrient Reduction Strategy, progress against nutrient pollution remains elusive.

“All Iowans want to see progress in meeting our goals to improve water quality,” said Sara Conrad, research associate for the nonpartisan Iowa Policy Project (IPP) and lead author of a new report. “Not only do Iowans want cleaner water, but we deserve more accountability than we are getting for our state’s efforts to date.”

The new report from Conrad and David Osterberg of IPP and Michael Burkart, a former U.S. Department of Agriculture researcher and Iowa State University professor, “Water Quality in Iowa and the Mississippi River Basin,” is available at www.iowapolicyproject.org.

Osterberg noted billions of state and federal dollars have been spent to improve water quality.

“The nation is demanding more progress,” Osterberg said. “The Mississippi River Basin and the Gulf of Mexico are being damaged by continued nutrient pollution by nitrogen and phosphorus. This is a problem of land management, and no one is requiring the managers of the land to do better.”

The report examines progress toward goals of the 2013 Nutrient Reduction Strategy (NRS), Iowa’s voluntary approach to the environmental and health effects of nutrient pollution.

The report found:

  • No improvement in the size of the hypoxic zone — or “dead zone” — in the Gulf of Mexico.
  • Progress is overstated in the latest annual report for the NRS, with insufficient focus on long-term trends in conservation reserve acreage and instances where producers have abandoned conservation practices.
  • While the use of cover crops has expanded, the 400,000 acres in cover crops in 2015 represents less than 2 percent of the 24 million acres in harvested row crops.
  • Iowa farmers, in the Iowa State University Rural Life Poll, show more awareness of the NRS, but not necessarily of their need to participate in solutions.
  • Monitoring for particulate and dissolved phosphorus in Iowa lakes and reservoirs has been stagnant, though river and stream monitoring has increased.

“Monitoring nutrient loads in watersheds is critical to accurately reporting trends to both the taxpayers paying for conservation and farmers implementing them,” said Burkart.

Conrad said “the science is clear.”

“Iowa must continue efforts to reduce nutrient levels in Iowa watersheds to improve water quality in not only Iowa’s streams and rivers but also the overall Mississippi River Basin and Gulf of Mexico,” she said.

The NRS report noted the federal Conservation Reserve Program (CRP) shows increased acreage over the last five years. The IPP researchers said that isn’t the whole story.

“In fact, the longer-term trend is less positive,” Osterberg said. “Even with that recent improvement, Iowa remained a half million acres below the 2 million acres it once had in CRP.”

Researchers also noted farmers’ investment in conservation. In Iowa State University’s Farm and Rural Life Poll, 51 percent of farmers reported spending nothing on conservation in the 10 years prior to the 2011 survey. This improved by 2014, but even then, more than 40 percent of producers spent less than $5,000 over the previous 10 years, or less than $500 per year.

Moreover, the researchers pointed out, nearly half of farmers surveyed reported they were not certain their farms contribute to hypoxia in the Gulf.

“Clearly, awareness of the NRS is not enough to assure good practices are adopted voluntarily, and maintained.” Conrad said.

“Iowa’s efforts under the NRS show minimal if any progress on the health of the Gulf of Mexico, let alone Iowa’s waters. At best, we can say Iowa has not increased nutrient levels in streams. We need to actually reduce those levels to substantively reduce the size of the Gulf hypoxic zone and improve the health of Iowa water systems.”

The Iowa Policy Project is a nonpartisan, nonprofit public policy research organization based in Iowa City. Reports are available at www.iowapolicyproject.org.

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We gratefully acknowledge the generous support of the McKnight Foundation and the Fred and Charlotte Hubbell Foundation, which made the preparation of this report possible. While these funders support the research that went into this report, they may not necessarily agree with policy recommendations that are included. Policy recommendations are solely the perspective of the authors and the Iowa Policy Project.

Of course the $33 million matters, Governor

The Governor’s rose-colored glasses on Medicaid privatization do not obscure the very real cost of an extra $33 million out the door to private companies.

It seems no Governor Branstad costume is complete without rose-colored glasses, even after Halloween.

For on the final day of October, as goblins prepared to venture out to neighbors’ houses for treats, the Governor offered news on his unilateral decision to privatize Medicaid: It will cost the state an extra $33 million this fiscal year, payments to private companies not previously anticipated.

But he’s telling us not to worry about that spending. For example, the Des Moines Register story prominently noted reassurances from the Governor and his chief of staff, Michael Bousselot:

But the situation will not negatively impact the state budget because Medicaid cost savings will exceed $140 million when compared to the old Medicaid program, they said.

 

Hmmm. So, we’re going to spend $33 million more — $33 million we weren’t planning to spend — and that doesn’t “negatively impact” the state budget?

That is not what we’re told when it’s $33 million for schools, or cracking down on polluters or businesses that deliberately stiff their employees for wages owed. For those things, we just don’t have the money.

Think of it this way: Last month, the Revenue Estimating Conference projected that the state would take in $72 million less in FY2017 than it had estimated in March. That means those funds will not be coming in and may affect what can be spent. Now, we learn of an extra $33 million charge. Already, some $100 million less for the current year.

Of course the $33 million matters. There is an impact on the budget bottom line, and it is disingenuous to suggest otherwise.

Budget projections are always a difficult thing. But from the start of the Governor’s decision to privatize Medicaid, without legislative consent, we have been asked to accept optimistic assessments of what to expect. And if the optimism is misplaced? Education funding and other general-fund priorities inevitably lose.

Medicaid privatization already has scared a fair number of Iowans about their access to health care. Those fears are not resolved. Neither are concerns about the fiscal side of this issue.

owen-2013-57Posted by Mike Owen, Executive Director of the Iowa Policy Project
mikeowen@iowapolicyproject.org

Will local wage laws spark state action?

The question in October is a question for January: Will local minimum wage efforts force a serious debate and action on a meaningful minimum wage for Iowa?

The pressure is building in Iowa for a minimum wage increase.

Polk County last week became the latest county to take matters into its own hands as Iowa lawmakers and Congress have left the state and national minimum wages at $7.25. Four counties have now approved minimum wage increases above $10 per hour by 2019, with one of them — in Johnson County — scheduled to be fully phased in by Jan. 1.

Within several days of that, the Iowa Legislature will convene and the ball will be in state lawmakers’ court.

In the meantime, Iowans tired of the nine-year wait for an increase may keep acting locally to boost prosperity for low-income working families — which is critical as about 1 in 5 Iowa do not earn enough for a basic-needs household budget.

Here is the current local minimum-wage lineup in Iowa:

Johnson County is currently at $9.15 in the second step of its three-step increase to $10.10 on Jan. 1, indexed to inflation after that.
Linn County has approved an increase to $10.25 by 2019 (three $1 steps, Jan. 1, 2017-19).
Wapello County will move to $10.10 by 2019 (three 95-cent steps, Jan. 1, 2017-19).
Polk County approved a wage of $10.75 by 2019 (three steps: $1.50 April 2017, $1 more in January 2018 and 2019), indexed to inflation afterward. Includes exception for workers under age 18.

There has been discussion or interest in a similar move in at least four other counties: Lee, Woodbury, Des Moines and Black Hawk. For some, this has become a county supervisor campaign issue.

The question in October is a question for January: Will the pressure of these local efforts, which are growing, be enough to force a serious debate in the Legislature on a statewide increase? And if it is, will that effort produce a wage that pushes Iowa closer to a cost of living wage? (Hint: Even $10 an hour is nowhere close.)

Stay tuned.

owen-2013-57Posted by Mike Owen, Executive Director of the nonpartisan Iowa Policy Project. mikeowen@iowapolicyproject.org

Iowa plants cookies in data center megadeals

The report’s recommendation: Cap data-center subsidies at $50,000 per job and be ready to walk away from bidding wars that guarantee losses for taxpayers.

161011-gjf-datacenter5x5A new study by Good Jobs First shows Iowa has two of the 11 “megadeals” in which states have awarded a total of $2 billion to Google, Microsoft, Facebook, Apple and Amazon Web Services for data center projects.

“The average cost of their 11 ‘megadeals’ profiled here is astronomical: $1.95 million per job. At that price, taxpayers will always lose, because a worker will never pay $1.95 million more in state and local taxes than public services she and her dependents consume,” the report states.

Sound familiar? It should. Iowa has two of the cited “megadeals,” which the report describes as subsidy deals of $50 million-plus. Both Iowa deals were with Microsoft — a $107.3 million subsidy in 2014 and a $65.3 million subsidy in 2010 for its “megadeal” list. Both fell below the $2 million per job average cost, but the Microsoft megadeal costs per job were $1.28 million and $964,627, respectively. In addition, the report notes competition between Washington and Iowa in 2010 for a Microsoft center, and Nebraska and Iowa in 2013 for a Facebook project.

Good Jobs First’s recommendation to all states: Cap data-center subsidies at $50,000 per job and be ready to walk away from bidding wars that guarantee losses for taxpayers.

In the new report, “Money Lost to the Cloud,” author Kasia Tarcynzska finds that states routinely subsidize data-center projects with special tax breaks that are not central to companies’ choices on where to locate.

“Decisions on where to locate data centers — which consume large amounts of electricity but employ few workers — are primarily based on the availability of reliable, low-cost electricity,” she wrote.

“Despite their New Economy allure, internet companies have fully embraced Old Economy habits of playing states and localities against each other in bidding wars, putting public officials in a ‘prisoners’ dilemma’ and causing governments to grossly overspend for trophy deals.”

Iowa, which has made deals with the likes of Google, Microsoft and Facebook, is one of eight states with special sales and use tax exemptions on electricity purchased by data centers.

In addition, the report notes, property taxes are often the largest taxes paid by companies, and local property tax abatements can be the largest component of subsidy packages — but frequently are not disclosed.

“Data centers create very few permanent jobs, so one of the biggest benefits that a community can hope for is a stronger tax base. But that benefit fails to materialize when the major taxes such as sales, utility and property levies are abated,” the report states.

The report concludes with a “larger question,” one that should be asked of any subsidy at any time when state and local officials try to attract development from big, stable companies. Why, Tarcynzska asks, “should communities use their limited financial resources to subsidize such self-sufficient companies to build something the companies must have?”

See the report here and the news release here from Good Jobs First.

Posted by Mike Owen, executive director of the Iowa Policy Project
mikeowen@iowapolicyproject.org