Minimum wage increase on the Iowa Senate Democratic agenda

In Iowa, minimum wage last raised in 2007

James Q. Lynch
Published: September 27 2013 | 5:30 am - Updated: 28 March 2014 | 9:01 pm in
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As the Iowa Senate Democratic caucus begins setting its agenda for the 2014 session Friday, increasing the minimum wage will be on the table.

However, Senate Majority Leader Mike Gronstal, D-Council Bluffs, who was in Cedar Rapids for a legislative fundraiser Thursday, couldn’t say whether it will get any further than a bullet point on the agenda.

He expects raising the minimum wage to be in the mix when the Senate Democratic caucus, which holds a 26-24 majority, meets Friday in Cedar Rapids to begin outlining its priorities for the 2014 session commencing in January.

It’s an issue being embraced by Democrats around the country who see it as a fairness issue. They want to help low-wage workers who have seen their buying power diminish as large corporations have been reporting record profits.

If the minimum wage had kept pace with inflation it would be $10.74 Friday, not $7.25 an hour, they point out.

In Iowa, the minimum wage was last raised in 2007 when Democrats controlled both chambers of the Legislature and the Governor’s Office. It went from $5.15 to $6.20 and then $7.25 in 2008. Iowa has matched the federal rate since 2009.

Although Democrats are willing to raise the minimum wage, Gronstal said that with the House in Republican control, it’s one of many issues that will require compromise.

“I think we’ll have a discussion” with House Speaker Kraig Paulsen, R-Hiawatha to gauge the interest in raising the minimum wage, he said.

“If there is a willingness on their side to consider it, we’re certainly open to having that discussion,” Gronstal said. “If there is little likelihood of it succeeding, I’m not inclined to do it.”

That could change if Republicans push a “highly-charged partisan agenda,” Gronstal said. Then his caucus is more likely to respond in kind.

Business groups tend to oppose increasing the minimum wage. They argue employers struggling to come back from the recession can’t afford the higher wages and may lay off workers. They also argue that employers who pay minimum wages are not large companies, but small businesses and independently-owned franchises operating on narrow profit margins.

However, there is some business support for an increase. Officials at Starbucks and Costco, for example, have voiced support. A poll earlier this year by a Democratic polling firm found nearly 70 percent of small business owners favoring an increase as a way to help the economy.

Gronstal believes the economic objections to an increase “are largely exaggerated.”

He doesn’t believe that neither an increase signed by Gov. Terry Branstad in the late 1980s nor the increase approved in 2007 had a negative impact.

“I don’t think you can find any particular evidence that it cost jobs,” Gronstal said.

In California, Democratic Gov. Jerry Brown has singed $10-an-hour minimum wage legislation. In North Carolina, South Dakota, Pennsylvania and Arkansas are either pushing for an increase or using the issue to win support at the ballot box.

The push comes as organized labor and liberal interest groups have backed strikes and other actions in the fast-food industry calling for higher minimum wages. They are calling for the national minimum wage of $7.25 an hour to be increased to $15.

States cannot set a minimum wage lower than the federal standard, but many have higher thresholds.

Washington State has the highest at $9.19. California’s will grow to $10 in 2016. In addition, 120 cities require businesses with city contracts to pay so-called living wages of $9 to $16 an hour.

Iowa Democratic U.S. Sen. Tom Harkin introduced a bill in July to raise the federal rate to $9.80 by 2014 and establish annual increases.

 

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