Iowa’s minimum wage workers probably don’t have a raise in their future – not from the Iowa Legislature this session, anyway.
A three-member Senate subcommittee approved a bill Thursday that sought to increase the state’s hourly minimum from the current $7.25 level to $8.75 an hour next July 1 and then to $10 per hour on Jan. 1, 2013. Senate File 2040 provided lower thresholds for employees who had not completed 90 calendar days of employment.
However, Sen. Wally Horn, D-Cedar Rapids, said he did not believe there was support to get a minimum wage increase to Gov. Terry Branstad’s desk this year, so he did not intend to bring the measure before the full Senate Labor Committee, which he chairs.
That decision would effectively end consideration of the issue, given that next Friday is the first “funnel” deadline for non-money bills to clear a standing committee of the House or Senate to remain eligible this year.
Sen. Tom Courtney, D-Burlington, the bill’s sponsor, said anyone currently earning the hourly minimum is making a little more than $14,000 a year, which is not enough to live on.
However, business representatives and Sen. Mark Chelgren, R-Ottumwa, argued that a state-mandated increase would be detrimental to Iowa’s economic recovery, and would hit young people particularly hard.
“I don’t think there’s any proof that the minimum wage makes businesses go under,” Courtney said.
Chelgren, who said he has owned small businesses and managed employee costs, warned that raising minimum pay to the levels Courtney envisioned would have a “chilling effect” on young people’s work ethics and would hurt Iowa’s economic climate by exceeding the federal minimum wage requirement.
John Gilliland of the Iowa Association of Business and Industry said he has data indicating that thousands of jobs were cut when the state minimum wage was increased in 2007. He said it hurt young people the most because 85 percent of minimum-wage workers are teenagers living with their parents.
Courtney and Charlie Wishman of the Iowa Federation of Labor, AFL-CIO, refuted that claim, saying most minimum-wage earners are aged 20 years or older and often are single parents, minorities or college students.
“Every year we raise college tuition. To me this is the greatest thing we could do for young people so they can afford college,” said Sen. Dick Dearden, D-Des Moines, who joined Courtney in supporting the bill. “This is not going to put anybody out of business and I think it’s the right thing to do.”
Wishman said the bill would not impact union members but he said the Iowa Federation of Labor supported it as “a matter of economic justice. This isn’t going to lift anybody out of poverty, but it’s going to help keep the lights on and the car running,” he said.
Craig Walter of the Iowa Restaurant Association said he was concerned a minimum wage increase would hit business “crawling out of that hole” from one of the nation’s worst recessions, causing them to consider eliminating jobs, cutting back on staffing hours or raising menus prices – none of which were preferred options.
“If you’re interested in putting Iowans back to work, then you need to make it easier to be an employer in the state of Iowa, not harder,” said House Speaker Kraig Paulsen, R-Hiawatha.