The federal minimum wage of $7.25 an hour is a cruel joke. If it had kept pace with increases in U.S. labor productivity since the 1970s, it would be at least $18 an hour today. Assuming full-time year-round employment, it yields $14,500 per year, well below the federal poverty level for a three-person family ($20,420). That’s why 29 states, though not Iowa, have raised their minimum wage beyond the federal mark.
The poverty level is another cruel measure. It is based on a hopelessly antiquated 1950s formula that multiplies a minimum food budget three times and is not adjusted for significant geographic variations in the cost of living across the nation.
What does it really cost just to get by today? The prestigious Economic Policy Institute’s comprehensively researched and locally adjusted Family Budget Calculator, the annual expense of a minimally adequate no-frills standard of living for two parents with two children in Iowa City (the most expensive city in the state of Iowa), is $67,710.
This might sound too high until you add up the monthly expenses: housing ($851), food ($782), child care ($1,046), transportation ($608), health care ($843), other necessities ($789), and taxes ($724), for a total monthly outlay of $5,643. The basic two-parent-two-kid family budget is lower but still daunting in other rural Iowa, $60,650, and in other Iowa cities, ranging from $61,792 in Davenport to $66,064 in Council Bluffs.
Keep the EPI’s figures in mind the next time you hear the U.S. Chamber of Commerce or the American Enterprise Institute express horror at the notion that the minimum wage should go as “astronomically” high as $15 an hour. That would mean $30,000 a year for a full-time worker fortunate enough to stay employed year-round. In rural Iowa, two parents working full time at that supposedly exorbitant wage would still fall short of a minimally adequate standard of living. In Iowa City, the state’s most expensive town, those parents would be more than $7,000 short.
Responding to the stark penury of the federal minimum wage and to differentials in the cost of living across geography, elected boards in four Iowa counties have recently increased their minimum wages to $10 an hour. Johnson County, home to Iowa City, is already at $10. The three other counties — Polk (home to Des Moines), Linn (Cedar Rapids), and Wapello (Ottumwa) — are scheduled to hit that mark at the beginning of 2019.
The $10 minimum is a real gain but it translates to just $20,000 a year. Two parents with two children working full time year-round at $10 an hour come in at less than two-thirds of the EPI’s modest basic family budget cost.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Thank you for signing up for our e-newsletter!
You should start receiving the e-newsletters within a couple days.
How coldly Dickensian is it, then, for the reigning Republicans in Des Moines to be moving ahead with a state bill (House File 295) that would nullify the recent county-level minimum wage increases and pre-empt local and county jurisdictions from passing any such measures again in the future? HF295 recently passed in the Iowa House.
HF295 sponsor Rep. John Landon (R-Ankeny) says that his measure seeks to create “a level playing field” in all Iowa communities. “This comes,” he told the Cedar Rapids Gazette, “because of the patchwork effect that it creates on trying to operate businesses that are multicounty, that are multistate. It makes it difficult to keep track of each and every initiative that is passed that would impact that business as far as wages or other conditions.”
Does Landon really think Iowa employers are incapable of adjusting compensation to city- and country-level ordinances among other factors that create different labor markets across locales? Does it not matter to him that it costs considerably more to live in Iowa City and Des Moines than in Red Oak or Fort Dodge? Does he really want to begrudge a full-time American worker the right to make at least $20,000 a year, giving employers the right to push that annual income back as far as $14,500? How about passing a uniform state increase in the minimum wage?
Johnson County employers have recently been asked by the Center for Worker Justice of Eastern Iowa to “stand up for our workers, and our values, and pledge that you will continue to honor the Johnson County minimum wage of $10.10 — no matter what the politicians in Des Moines decide.” It’s a moderate request. I’d also push those employers to begin moving their lowest wages much closer to the real cost of local living here. Try $15 an hour for starters. Along the way, it would be useful for them to lobby the state’s right-wing politicians, telling them to stand down from their ugly assault on basic decency for Iowa workers and to join most of the nation’s states in raising the minimum wage beyond its current pathetic federal level.
• Paul Street is an author and journalist in Iowa City. His latest book is They Rule: The 1% v. Democracy (Paradigm-Routledge, 2014).