Local wage hike achieved its goals

A sign supporting a minimum wage of $10.10 is displayed in the window of Velvet Coat in Iowa City on Wednesday, Mar. 29, 2017. (Stephen Mally/The Gazette)
A sign supporting a minimum wage of $10.10 is displayed in the window of Velvet Coat in Iowa City on Wednesday, Mar. 29, 2017. (Stephen Mally/The Gazette)

Johnson County’s experiment with increasing the local minimum wage appears to have been a qualified success. Now county leaders hope state lawmakers will reverse their decision to nix the local wage increase.

The county imposed a gradual minimum wage increase in 2015, reaching $10.10 in January 2017 and tying future increases to inflation. However, the project was halted by state legislators last year, who passed a law to imposing a uniform minimum wage across the state. Lawmakers declined to address the state’s $7.25 hourly wage floor, which hasn’t been increased in more than a decade.

Local economists studying the impact of the Johnson County minimum wage increase reported their findings to the Board of Supervisors in December. Overall, it was good news.

Researchers compared several economic indicators in Johnson County to Linn, Black Hawk, and Story Counties, before and after the minimum wage increase.

In almost all cases, Johnson County’s figures after the wage hike remained on pace with pre-hike trends. One highlight was higher wage growth for thousands of workers in Johnson County’s leisure and hospitality sector.

As a caveat, the analysis — prepared by Peter Fisher and John Solow, both members of the Johnson County Minimum Wage Advisory Board — is based on a narrow snapshot of the local economy.

“It is difficult to draw strong conclusions about the impact of the Johnson County minimum wage ordinance; the increased minimum wage was only in place for six quarters, and was phased in over that period of time. In addition, other forces that affect the economy of Johnson County were, as always, in play,” Fisher and Solow wrote in their report to the Board of Supervisors.

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While the figures show the minimum wage increase did not unleash economic ruin on Johnson County, they also show no sign of the sweeping economic boom advocates claimed would follow the minimum wage increase.

Supervisor Rod Sullivan wrote in a guest column to The Gazette last year, “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.”

Sullivan’s theory is not supported by the data. County leaders overstating their case are unlikely to find sympathetic ears in the Republican-controlled Iowa Legislature.

What’s more, the Johnson County Board of Supervisors now plans to keep increasing their unenforceable minimum wage, commensurate with increases in the consumer price index.

“The rug was pulled out from under our feet. … We can’t enforce our ordinance, but we’re going to keep our ordinance. It’s still on our website, it’s still our recommendation that people follow it,” Supervisor Janelle Rettig said during the board’s December 21 meeting.

It’s hard to see what the county’s hollow minimum wage increase will accomplish. Instead, it seems like progressive Johnson County is needlessly thumbing its collective nose at conservative Iowa lawmakers.

We overwhelmingly agree with the Board of Supervisors on the substance of their arguments — we supported the minimum wage increase, and believe strongly local governments should still have that power. We’re skeptical that a so-called “patchwork” of local wages is a burden on businesses that already deal with an array of local rules, ordinances and tax rates. Short of a return to local control, we’ve advocated that state leaders move to enact an overdue increase in the statewide minimum.

However, we also are aware of the political realities of one-party control in state government. If Johnson County leaders insist on sidestepping the wage law passed by lawmakers last session, they shouldn’t be surprised when lawmakers ignore their pleas for reform.

• Comments: (319) 398-8262; editorial@thegazette.com



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