Minimum wage increase worked in Johnson County
In November of 2015, the Johnson County Board of Supervisors raised the minimum wage $. 95 countywide to $8.20. It went up another $. 95 on May 1, 2016 to $9.15. It went up yet another $. 95 to $10.10 on January 1, 2017. Then, in late March of 2017, Republicans in the Iowa Legislature lowered the minimum wage back to $7.25.
So — Johnson County had a higher minimum for just under a year and a half. What was the impact?
For one, other counties took similar action. Polk, Linn, Wapello, and Lee Counties followed suit. And with their actions, the Republican Legislators took higher wages away from as many as 85,000 Iowa workers.
As low-wage workers have more money to spend, consumer demand is creating jobs. Grocery stores, restaurants, repair shops, clothing stores, etc. all have more customers with more money. Businesses need to hire in order to meet demand. That means jobs. (Consumer spending makes up 70 percent of the US economy.) Other jurisdictions have seen increases in employment follow increases in the minimum wage; we are seeing that, too.
Some claimed jobs would move elsewhere. This did not happen. Unemployment in Johnson County remains less than 2.5 percent — one of the lowest numbers in the whole country!
Others claimed that business owners would cut back on hours. But our economy is lacking consumer demand. When workers have more income, they spend it at local businesses. Those businesses will need employees to keep up with demand. So while anything can happen at any given business, most employers have seen a need to fill more shifts, not less. This is borne out by federal wage statistics.
Some claimed prices would go up. We were already paying for low wage jobs — through our taxes. What’s more, studies do not bear out a huge jump in prices.
You probably heard the debate over a lower wage for teens. But according to the Economic Policy Institute, the average age of workers who benefited from a higher minimum wage was thirty-five. Eighty-eight percent were over the age of twenty.
I have heard concerns expressed for small businesses. But two-thirds of all minimum wage workers are NOT employed by small businesses. Better yet, one survey shows three out of five small business owners favor raising the minimum wage; their profits require more money in local consumers’ hands. Sad to say, 50-80 percent of small businesses already fail for various reasons, even with a minimum wage that has not kept up with inflation. Factors other than labor costs seem far more significant to business success.
Some claim we need a single minimum wage for the whole state. Why? We have different sales tax rates, different property tax rates, different prices for utilities and insurance … heck, wages ALREADY vary dramatically throughout individual companies. Why is the minimum wage different?
While things might be a bit better because we raised the wage, still far too many of our citizens are in crisis. One out of every six of our kids lives in poverty. Families double up because they cannot afford the rents in Johnson County. Families routinely use food banks to get through the week. (19,000 Johnson County citizens are food insecure.) Cars go unrepaired. Kids go to school with clothes that do not fit. One small anomaly — an illness, something breaks down, etc. — and a family’s world comes crashing down. People work 2-3 jobs, yet still cannot get ahead.
Federal and state governments refused to address this crisis. So local government stepped up. Raising the minimum wage has been a good thing for the people of Johnson County. Why did the Republicans in the State Legislature take that away?
Whenever possible, I like to make decisions based upon data. The data here is clear — raising the minimum wage was good for our local economy.
• Rod Sullivan serves on the Johnson County Board of Supervisors