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House Democrats offer bill to increase minimum wage

CheckbookA group of House Democrats offered a bill this week to substantially increase the state minimum wage in Iowa, and to increase it annually based on inflation.

House File 71, which is sponsored by state Rep. Bruce Hunter (D-Des Moines) and 16 of his House colleagues, proposes to incrementally increase the minimum wage from its current $7.25 per hour incrementally to $10.10 per hour by Jan. 1, 2017. It calls for intermediate increases to $8.20 on Jan. 1, 2016, then $9.15 on July 1, 2016.

Beginning July 1, 2018, the minimum wage would rise by a percentage every successive July 1, based on the percentage increase in Social Security benefits as of the previous December, as authorized by the U.S. Social Security Administration. For instance, a 2-percent increase would be a 20 cent-per-hour increase in the minimum wage in 2018.

For a full-time employee, $10.10 per hour equates to roughly $21,000 per year.

The Iowa Federation of Labor/AFL-CIO, Iowa Citizens for Community Improvement Action Fund, Plumbers and Steam Fitters Local 33, and the Iowa Catholic Conference have declared their support for the proposed legislation. The Iowa Grocery Industry Association, the Iowa Greenhouse Growers Association, and the Iowa Lodging Association are all opposed to the bill.

House File 39, another of Hunter’s pet projects, would require – contingent upon funding – Iowa State University to study the “the economic, fiscal, and social effects that a living wage, or self-sufficiency wage, would have in Iowa.”

The bill also details specific criteria the study must include. These are:

  • a proposal for a two-tiered “living wage,” one tier with benefits and one without benefits, for family sizes ranging from two to six people, for all 99 counties;
  • an evaluation of the impact that a “living wage” would have on full-time workers, the multiplier effect of a “living wage” on the economy, and whether more jobs would be created by this multiplier effect;
  • how a “living wage” would impact public assistance programs, particularly whether it would reduce costs;
  • how a “living wage” would impact state and local economic development programs;
  • how a “living wage” would assist or hinder the housing market; and
  • taking all of the other above criteria into account, an examination of whether there would be an overall positive impact on the economy considering possible business concerns of inflation and job loss.

HF 39 also requires the Iowa Department of Workforce Development, the Iowa Economic Development Authority, the Iowa Department of Human Services, the University of Iowa, and the University of Northern Iowa to participate. Non-governmental bodies, including the Iowa Child and Family Policy Center, the Iowa Policy Project, representatives of labor organizations, and business and industry associations, are required to also participate in the study, if the bill is approved.

The bill has the support of the Iowa State Education Association, the Iowa Annual Conference of the United Methodist Church, the Iowa Catholic Conference, the Iowa Federation of Labor/AFL-CIO, and AFSCME Iowa Council 61. The National Federation of Independent Business is opposed to it, while dozens of other interest groups have declared they are currently undecided on the proposed legislation.