Johnson County planning for another minimum wage increase

IOWA CITY - With a new study showing that Johnson County's two-year-old minimum wage increase has provided raises for some residents, yet hasn't hurt businesses, the county Board of Supervisors plans to continue with another recommended pay increase next year.

Since state pre-emption rules passed earlier this year make the county's local minimum wage ordinance unenforceable, the pending raise will be voluntary for business owners, yet highly recommended by the board, which was the first in Iowa to pass a minimum-wage increase in late 2015.

Janelle Rettig, chair of the Johnson County Board of Supervisors, said Thursday that increase will be based on the Consumer Price Index, which - if done with the most recent data - would account for a 22-cent per hour increase.

'The Board of Supervisors intends to do that ... we don't know what it will be, but you should expect us in February or early March announcing a likely increase in the minimum wage,” she said.

When passed in 2015, supporters of the local minimum wage said it would help the county's lowest earners, while opponents argued it would hurt businesses.

A study of Johnson County's economic performance before and after the minimum wage increase, completed by University of Iowa economics professor John Solow and Peter Fisher, an economist with the Iowa Policy Project, was presented Thursday to the Board of Supervisors. Solow and Fisher also are members of the Johnson County Minimum Wage Advisory Commission.

The study found that the growth rate of earnings for workers in the leisure and hospitality sector saw a nearly threefold increase between 2015 and 2017.

In the same time span, comparable counties, including Black Hawk, Linn and Story, saw a growth rate in weekly earnings that was less than double what they were the year before

'I think it's a pretty strong indication that there is a substantial gain in earnings in this sector of the economy,” Fisher said.

Meanwhile, tax filings for Johnson County businesses showed that the number of eating and drinking establishments, as well as sales at those businesses, remained relatively unchanged after the local wage increase.

'It's really hard to detect any great loss of business in any eating and drinking establishments at any time in the year as a result of the increase in the minimum wage,” Solow said.

The study also found little change to countywide employment and unemployment numbers.

Supervisors in 2015 passed a countywide minimum wage increase, which was phased in over time from the federal minimum of $7.25 an hour to $8.20 an hour in November 2015, to $9.15 in May 2016 and to $10.10 on Jan. 1 of this year.

However, as a handful of Iowa counties began to follow suit, including Linn and Polk, state lawmakers earlier this year passed pre-emption rules, which eliminated a county's ability to enforce a minimum wage higher than the state rate.

In response, Johnson County officials - led largely by Supervisors and the Center for Worker Justice - began reaching out to area business owners requesting they maintain the local $10.10 rate. More than 160 businesses have pledged to keep the higher rate, according to a Wednesday news release from Center for Worker Justice executive director Rafael Morataya.

Supervisor Rod Sullivan said he hopes the 14-page report will be used as a reference point for state lawmakers during minimum wage discussions in the upcoming Iowa legislative session.

'When the legislature goes back in January and they are having this argument, we've got a report to which they can turn, which gives them some of the facts,” he said.

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