In his State of the Union speech, President Obama suggested raising the minimum wage for American workers from $7.25 to $9 per hour.
Senator Tom Harkin has also shown strong support for raising the minimum wage, introducing a bill in 2012 that would have raised the minimum wage to $9.80 per hour. Harkin’s bill would have given raises to tipped workers and indexed the minimum wage to inflation thereafter so that it would keep up with the rising cost of living.
According to an inflation calculator, the minimum wage paid to American workers has not exactly kept up with inflation over the years.
For example, the minimum wage in 1968 was $1.60. In today’s dollars, that is worth $10.56. However, today’s minimum wage of $7.25 is worth $5.44 in the year 2000, which is above the minimum wage at that time of $5.15.
Raising the minimum wage becomes a complicated matter when trying to measure the affect on business owners and any potential harm the move might cause them, not to mention a possible slow-down in hiring due to labor cost increases.
The future of Obama’s plan in Congress looks bleak, as Republicans immediately took aim at the idea. However, 19 states already require a higher minimum wage than the national rate.
Currently in the Iowa Legislature, there is a bill being discussed in subcommittee for an act to increase the state minimum hourly wage and to provide subsequent increases by the same percentage as the increase in federal social security benefits.
HF39 increases the state minimum hourly wage to $7.75 as of January 1, 2014, $8.25 as of July 1, 2014, and $9.00 as of January 1, 2015. The bill increases the state minimum hourly wage for employees employed for less than 90 days to $6.85 as of January 1, 2014, $7.35 as of July 1, 2014, and $8.10 as of January 1, 2015. The bill also increases the state minimum hourly wage, including the minimum hourly wage established for employees employed for less than 90 days, annually on July 1, beginning July 1, 2015, by the same percentage as the cost-of-living increase in social security benefits effective as of the previous December, as authorized by the federal social security administration.
The Iowa House of Representatives is controlled by Republicans.
The Iowa House looked at a bill in 2012 that would have raised the minimum wage for Iowa workers to $10.o0 per hour but it never made it out of committee discussions.
