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

170119-IFP-ACA-F1

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the impact on Iowa, and potentially on state finances and responsibilities, if the federal Affordable Care Act is repealed.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: Iowa impacts of ACA repeal

Repeal of the Affordable Care Act will leave fewer people in Iowa with insurance than before the law took effect.

Editor’s Note: The Iowa House of Representatives voted Monday to deny 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, we will offer examples. Here is today’s graphic, to illustrate what could be expected to happen in Iowa if Congress repeals the Affordable Care Act.

170119-IFP-ACA-F2xxRepealing the Affordable Care Act (ACA) without an adequate replacement, as Congress and the incoming Trump administration appear poised to do, jeopardizes the health care coverage and economic well-being of the most vulnerable Iowans. About 230,000 fewer Iowans would have health coverage in 2019 if the law is repealed, including 25,000 children.

In fact, repeal of the ACA could leave tens of thousands of adults uninsured who actually had insurance prior to the ACA. Some 69,000 Iowans covered by an Iowa program, IowaCare, became part of the Iowa Health and Wellness Program with the advent of the ACA, while even more Iowans had insurance with the help of ACA subsidies.

Repeal leaves all three of those programs gone — IowaCare, Iowa Health and Wellness, and the ACA subsidies. Thus, fewer will have insurance than in 2013, prior to the ACA, and low-income Iowans will be worse off. This is an issue that state legislators may be left to address with no help from the U.S. Congress, but is not getting attention at the Iowa Statehouse.

For more information, see this Iowa Fiscal Partnership policy brief by Iowa Policy Project Research Director Peter Fisher.

Today’s virtual House graphic: Cutting wages in four counties

Local minimum wage ordinances cover one-third of the private-sector workers in the state of Iowa.

Editor’s Note: The Iowa House of Representatives voted Monday to deny 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, we will offer examples. Here is today’s graphic, to illustrate where county-level minimum wages have passed and could be repealed.

Iowa 03-BLUE-countiesxljpIowa Policy Project reports have illustrated the impacts of increases in the minimum wage if enacted at the state level or, in some cases, at the local level. Four counties have enacted minimum wage increases in Iowa, with the Johnson County wage of $10.10 taking effect in three steps and fully implemented last month. Polk, Linn and Wapello counties also have passed county-level minimums.

If the state Legislature were to choose to repeal those local minimums, it would affect one-third of the private-sector workers in the state of Iowa. For more information about the minimum wage in Iowa, visit this page, and this blog post by IPP’s Peter Fisher.

Erasing local minimum wage gains

Legislation to end local minimum-wage increases in Iowa would guarantee different minimums in border communities as Iowa’s state minimum wage trails those of most neighboring states.

The state minimum wage in Iowa has been stuck at $7.25 for over nine years. But because of the actions of four county boards, a third of the private-sector workers in the state are now covered by a local minimum wage ordinance. About 65,000 workers in Polk, Linn and Johnson counties already benefit from an increase in their hourly wage to more than $10.00, or will in the next two years. Another 20,000 or more will benefit indirectly.[1]

Iowa 03-BLUE-countiesxljpBut those wage gains would all be erased under a bill filed in the Iowa House, HSB92. That bill would nullify all of the county ordinances; in a single stroke, it would drive down the wages of about 85,000 Iowa workers.

We know something about who those workers are. Over 40 percent work full time. Many are trying to raise a family on low wages. The vast majority are age 20 or over, and one in five are age 40 or above. They are more likely to be women than men. Many live in in poverty despite working full time.

The average low-wage worker in Polk County who would be affected by the Polk minimum wage, which rises to $10.75 in 2019, could look forward to a raise of over $2,700 a year. But not if that bill becomes law.

The beneficiaries ofIowa 03-BLUE-counties the county wage increases are not confined to the counties that passed them. Thousands of workers commute from surrounding counties, and they come home to spend those higher wages at local gas stations, restaurants, grocery stores and other retail shops. They hire local plumbers and builders and electricians. In all, at least 12 counties in addition to Polk, Linn and Johnson will see a substantial increase in resident incomes and local purchases as a result of those three county minimum wages. Nullifying the wage increases will harm local economies, not just low-wage workers.

The bill goes beyond revoking the minimum wage laws passed recently by locally elected officials. It prevents any local elected body from enacting any ordinance in the future that is aimed at improving the lot of our low wage workforce. City councils and county boards would not be allowed to pass a law aimed at improving local wages, benefits, or sick leave policies, or reforming hiring or scheduling practices, regardless of how badly such measures are considered by elected officials to be needed, or how widely they are supported by local residents.

While some have hoped the state would grandfather in existing local ordinances, and would raise the state minimum by some amount, they stand to be disappointed. The bill leaves the state minimum at $7.25. This despite 70 percent support in Iowa for raising the minimum.

The bill reveals that the alleged concern over a “hodge-podge” of local ordinances was not the real issue. As we have argued elsewhere, the hodge-podge is a bogus argument. Labor markets are local, not statewide, and a local ordinance aimed at dealing with local market conditions makes sense. Nor is it plausible to argue that paying a different wage to different workers is a burden to businesses, who do that all the time.

Ironically, the bill would actually mandate that the current hodge-podge of minimum wages that exists in all of our border metro labor markets must remain. Quad City and Dubuque area businesses will still face an $8.25 minimum on the Illinois side. Council Bluffs and Sioux City businesses with employees on both sides of the river will still face $9.00 minimum wages in Nebraska. South Dakota’s minimum just went to $8.65, Missouri’s to $7.70. No increase in the minimum wage in an Iowa county to bring it into line with a bordering state will be allowed at the local level.

This bill, in sum, would help to guarantee that Iowa will remain a low-wage state.

[1] These estimates are based on an analysis of data from the American Community Survey by the Economic Policy Institute.

2010-PFw5464Posted by Peter Fisher, Research Director of the Iowa Policy Project

pfisher@iowapolicyproject.org

Ratcheting down public workers’ pay

Iowans must ask if we can continue to attract and retain good workers if we provide them no hope of gaining ground against the rising cost of living.

A bill just introduced in the Iowa Legislature would make sweeping changes to Iowa’s laws governing public employees, union and non-union, from teachers to snow plow drivers to child abuse caseworkers to nursing home inspectors.

Here we focus on one aspect of that bill, HSB84: the provisions that would drive down employee compensation on both the wage/salary side and the benefits side.

First, HSB84, prohibits an arbitrator from granting a wage increase in excess of the rate of inflation, or 3.0 percent, whichever is less. This applies to all public workers represented by a union — state, city, county, school — except for public safety workers (police and fire).

That restriction on an arbitrator will weigh against anything better than the cost of living, maxed out at 3 percent, since any impasse that leads to arbitration would enforce that limit. As the bill would remove all other topics from negotiation, there is no way for unions to negotiate for something else — better benefits, hours, working conditions or vacation — to compensate for a low wage offer.

The law also takes increases in the employee share of health insurance costs off the table. This means that any premium increase above inflation (and health care costs have been rising faster than prices generally for a very long time) will mean a loss of real wages, even in a year of low inflation overall.

What does this mean? The mathematical certainty is declining real income for public workers. Anytime inflation exceeds 3 percent, employees could lose ground. Anytime inflation is less than 3 percent, they could get no more than just enough to cover the rising cost of living, even to make up for those years of higher inflation. They could never catch up — unless the public employer agreed to it.

Suppose this mandate had been part of the collective bargaining law passed in 1974. What followed was a decade of inflation well in excess of 3 percent every year. After 10 years, the paychecks of public workers could have lost 37 percent in purchasing power. That’s a decline in your standard of living by over a third in one decade.

While inflation moderated in subsequent decades, it nonetheless exceeded 3 percent in 12 of the next 32 years (1985 through 2016). By now, wages would be just 59 percent of what they were in 1974. With employee health insurance costs thrown in, the real take-home pay of public workers could have fallen by half, or more.

Finally, the law prohibits bargaining over any wage increase or benefit based on seniority. Where public workers now can move up the pay scale through seniority, there is no guarantee that such pay scales will even exist in the future. The entire schedule of pay bumps based on experience and seniority could be eliminated by the employer. Employees would have no recourse.

We need well-qualified, experienced, dedicated workers teaching our children, taking care of the elderly, driving our buses and snow plows, protecting children from abuse and neglect. Iowans must ask if we can continue to attract and retain good workers if we provide them no hope of gaining ground against the rising cost of living.

2010-PFw5464Posted by Peter Fisher, Research Director of the Iowa Policy Project

pfisher@iowapolicyproject.org

IPP Statement: IPERS is strong

Governor Branstad and Lieutenant Governor Reynolds are discussing a potential task force to examine whether to replace the IPERS defined benefit pension plan with a defined contribution plan, like 401(k) plans.

The Iowa Policy Project, which has researched this issue already, today released this statement:

The governor’s proposed task force on public pensions is unnecessary. The evidence is clear that a defined contribution plan is inferior to a defined benefit plan in the fundamental purpose of a pension: to assure a secure retirement for an employee. The IPERS law also clearly states its purpose of reducing turnover and attracting high-quality public workers.

Therefore, any task force should be charged with those two fundamental tasks: (1) assuring a secure retirement for public employees, and (2) enhancing the ability of the state to attract and maintain good workers. Public employment should not be reduced to temp work.

It is noteworthy that the assurances offered current employees — which include the Governor, Lieutenant Governor and state legislators — pit current employees against future employees. It would replace a secure retirement with one at the mercy of the ups and downs of the stock market.

IPERS is strong — stronger than most such systems and stronger than it was after ill-advised underfunding and a recession. As long as legislators do not take the easy way out and choose to underfund this fundamental responsibility again, there is no reason to consider a change. A fair task force will discover this.

The effort to change this stable and secure pension plan for public employees is driven by political arguments — not economic or fiscal arguments. To better understand the issues and the political spin that is clouding them, see also these newspaper guest opinion pieces:

Alarmist rhetoric sells Iowa pension plan short,” by David Osterberg in the Cedar Rapids Gazette, December 2013

Strengthen, don’t break, Iowa pension plans,” by Peter Fisher in the Iowa City Press-Citizen, March 2014

 

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

Contact: mikeowen@iowapolicyproject.org

County Minimum Wages Spread their Benefits Widely

Clearly, any action by the Iowa Legislature to roll back county minimum wages would harm workers and local economies in many of Iowa’s most populous counties.

It’s not just four counties that benefit from the higher local minimum wages that go into effect this year. Those four counties — Polk, Linn, Johnson and Wapello — account for a third of all private-sector jobs in the state. And a large number of people holding those jobs live in neighboring counties.

Polk, Linn and Johnson counties are the hubs of metropolitan areas, surrounded by counties where a sizeable share of the workforce commutes to the hub. Those commuters earn higher wages thanks to the county supervisors in the three counties. And they come home to spend those higher wages at local gas stations, restaurants, grocery stores and other retail shops. They hire local plumbers and builders and electricians. In all, at least 12 counties in addition to Polk, Linn and Johnson will see a substantial increase in resident incomes and local purchases as a result of those three county minimum wages.

The map below shows the percentage of lower wage workers in each suburban county who are employed in the hub county with the higher minimum wage.[1] Clearly, any action by the Iowa Legislature to roll back county minimum wages would harm the workers and the local economies in many of the state’s most populous counties.

Iowa 03-BLUE-counties

[1] Lower wage is defined as earnings of $3,333 per month or less. Restricting it to those earning $1,250 or less results in very similar percentages; the lower figure, however, would represent a wage of even less than the current minimum for someone working full time, whereas the county minimums when fully phased in will benefit all those earning under $10.10 (Johnson) to $10.75 (Polk), and some workers above those levels. These earnings cutoffs were the only ones provided in the Census data.

2010-PFw5464Posted by Peter Fisher, Research Director of the Iowa Policy Project

pfisher@iowapolicyproject.org