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Editorial: Minimum-wage considerations
Op-Ed · May 04, 2017
Gov. Terry Branstad signed the minimum-wage bill on March 30, undercutting the action taken by our neighboring county to the west where many West Branch-area residents shop and do business.
That signature also removed minimum-wage increases for Polk, Linn, Wapello and Lee counties that, in all, affected about 85,000 workers.
Branstad said he, like other Republicans, is willing to see a moderate increase in minimum wages, but they would prefer to see those wages increase equally across the state. However, such action did not accompany this bill.
The cost of living in Cedar County is significantly lower than that of Johnson County -- we hear that all the time and state statistics bear that out. Further, border cities and counties, as well as businesses whose customers may cross state lines, have to compete with Illinois, Nebraska, Missouri, Minnesota, etc. That means statewide increases in minimum wages will affect people differently.
Local governments understand this and felt they were in a better position to experiment with their small pockets of citizenry. City and county jurisdiction only reaches to their own borders.
Johnson County implemented three 95-cent increases from November 2015 to January 2017, for a total of $2.85 more than the $7.25 federal minimum wage, or $10.10 per hour. In all, this amounted to a 40-percent increase for minimum-wage recipients.
However, there are ample criticisms that preceded this county board vote: The county did no serious research to study profit margins, especially for small businesses; the board also did not to evaluate possible reduction in hours (businesses shifting more work to salaried employees, outsourcing, or machinery) or evaluate the spending habits of minimum-wage earners to see how much of those additional wages would be absorbed by related increases to consumer goods; and the list goes on.
Johnson County Board Supervisor Rod Sullivan wrote an op-ed piece in the April 22 Gazette to argue that the board’s vote “was good for our local economy,” but his data and arguments are too broad to show actual good or harm, or based on too short a time (barely 1 1/2 years) to show meaningful trends.
None of this really is fundamental to the question of state or local control of minimum wage.
The state likely is not interested in counties and cities experimenting with their own populations, especially when those populations, like Johnson County, work at large state institutions like the University of Iowa and the University of Iowa Hospitals and Clinics.
We would like to see the state take time to consider some key questions before deciding on a figure for a statewide minimum wage: At what point do jobs increase or decrease? At what point will businesses innovate to increase their profit margins? At what point will niche or unique businesses expand, stagnate, decline, or move away? At what point will consumers and businesses significantly decrease purchasing local commodities they can get online or across the border? How does this impact the cost of living for college students? How does this affect the ability of high school students to land summer jobs? How does this affect state income tax revenues?
We would urge the state to seriously consider these questions, report its findings to the citizens and take whatever action is appropriate.
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