16 years of neglecting fair pay

Posted on January 1, 2024 at 12:00 AM by Mike Owen

It has now been 16 years since Iowa last signaled that our state values work in one of the most fundamental ways it can: a responsible minimum wage.

The Iowa Legislature in 2007 passed a two-step increase moving from $5.15 an hour to $7.25 on Jan. 1, 2008.

When Iowa lawmakers took up the issue that year, Iowa was among leaders in the states. Only the five Pacific states and six Eastern states (New York, Vermont, Rhode Island, Massachusetts, Connecticut and New Jersey) were at $7.15 or above. Iowa was ready to join the group.

Now, four of our neighboring states are above $11 an hour and another is close.

Thirty states plus Washington, D.C. have a minimum wage higher than the federal $7.25. Twenty-two states increased their minimum wage to start 2024. Many do so automatically, which helps workers keep up with inflation. Sometimes legislatures set increases. In some states — such as Nebraska, Missouri and South Dakota — voters ordered the change with ballot issues.

Iowa does nothing. It barely enforces the law in place. Employers stealing wages from minimum-wage workers is over one-fourth of the $900 million annual wage theft problem in Iowa.

Research by the Economic Policy Institute has found that a minimum-wage increase to $17 would benefit some 387,000 Iowa workers — almost a quarter of employed Iowans.

Forget the scare tactics often trotted out by some in the business lobby — and routinely discredited by research — whenever minimum-wage proposals are raised. A March 2023 study at UC Berkeley found, for example, that in low-wage industries, minimum-wage increases mean higher wages, not disemployment. "A minimum wage increase doesn't kill jobs," noted Michael Reich, chair of UC Berkeley's Center on Wage and Employment Dynamics. "It kills job vacancies, not jobs. The higher wage makes it easier to recruit workers and retain them. Turnover rates go down. Other research shows that those workers are likely to be a little more productive, as well."

The issues are settled matters in over half of the states, where minimums are set higher than the exceedingly meager federal level of $7.25. What is it about Iowa businesses that makes policy makers think they couldn't handle a higher, responsible and sustainable number?

There are many good reasons to act, and not a single good reason for Iowa's leaders not to stand up to protect low-wage workers in our economy. But each year they do not act, it makes correcting the problem seem even more daunting, and the scare tactics about fixing it even more shrill.

It's pretty simple. Set meaningful standards that make a difference for working families and in the end actually boost their employers and other businesses — and set them in public policy for a level, reasonable labor marketplace.

Sixteen years. The clock is ticking.

Mike Owen is deputy director of Common Good Iowa. Contact: mowen@commongoodiowa.org.