Iowa's next minimum wage hike isn't where you'd expect

OTTUMWA, Ia. — Until now, the debate over raising the minimum wage has raged in Iowa's largest and wealthiest counties.

No longer.

Wapello County, one of Iowa's poorest counties, is a step away from raising its minimum wage to $10.10 per hour by 2019 — nearly $3 an hour more than the current federal and state minimum of $7.25.

The hike could have a particularly large ripple effect, given that one-fifth of county residents live below the poverty line.

"We’re falling behind other counties," Wapello Supervisor Greg Kenning said. "And one of the reasons is wages."

On Monday, the county's three-member board of supervisors unanimously approved the second reading of an ordinance to raise the county's minimum wage, with a final vote to come Sept. 13.

If the ordinance passes as expected, the county's actions potentially give the minimum wage debate traction beyond the state's large urban centers, where it has been focused so far.

• Johnson County already passed a minimum wage ordinance, which will see local minimum wage increase to $10.10 by January.
• A Polk County task force finalized its proposal that would roll out a minimum wage of $10.75 by 2019.
• And Linn County supervisors will take the first of three votes this week on an ordinance that would raise the wage to $10.25 per hour.

IOWA MINIMUM WAGE: More news stories and opinions

Those counties are all larger and wealthier than Wapello County, according to an analysis of U.S. Census data from the Iowa State Data Center:

• Wapello's poverty rate ranks third among all 99 Iowa counties.
• At $21,909, Wapello's per-capita income is the second-lowest in Iowa.
• At $51,364, the county's median household income is also the state's second lowest.

While some detractors used the county's poverty levels as an argument against the wage hike, arguing that the county couldn't afford it, Kenning said those statistics demonstrate why workers need to be paid a better wage.

"I would think that that would even add more strength to our argument," he said.

Minimum wage gaining momentum?

John Solow, a University of Iowa professor of economics, said he was surprised but not shocked that Wapello was the next Iowa county to move on the minimum wage.

"I don’t know if you had given me a list and said, 'OK, pick the next one,' that would necessarily have been the first on my list," he said.

That's because the minimum wage is as much a political issue as it is an economic one, experts say.

In Wapello County, about 41 percent of voters are registered Democrats, and only one-quarter are registered Republicans, according to the Iowa Secretary of State.

"If I had to make predictions, I would imagine it would tend to be happening in counties in the eastern half of of the state, rather than the western half of the state for that reason alone," Solow said.

So far, few other counties seem ready to jump into the debate.

Supervisors in Scott, Pottawatomie, Blackhawk, Dubuque and Woodbury counties told the Register they have no plans to examine a minimum wage increase any time soon.

One of the three Democratic supervisors in Woodbury County recently moved to create a task force to study the minimum wage, but that motion failed to gain support.

"I don’t think it’s the role of the county to set a minimum wage. I think it's full of complications," said Jeremy Taylor, one of two Republicans on the Woodbury County board. "I want to be focused primarily on economic development and growth."

Story County supervisors have kept a close watch on Linn, Polk and Johnson counties, supervisor Rick Sanders said. But so far, that county's three board members haven't taken up the issue.

"At this point, we're going to wait and see what the Legislature does, if anything, this year," he said.

William Peterson, executive director of the Iowa State Association of Counties, said he would expect some of Iowa's urban counties to at least examine the minimum wage. But it hasn't happened yet.

"I wouldn’t say that I would expect that there would be many more counties," he said.

Wapello County opposition mounts

Even in Wapello County, discontent is rising over the prospect of a wage hike

Butch Annis, who owns and operates Floyd's sandwich shop inside Ottumwa's Market on Main, said he can't afford to hire help at the current minimum wage of $7.25 per hour, let alone at the county's proposed higher rates. He operates the sandwich shop without hired help six days a week, he said.

Annis said supervisors should spend their time on maintaining streets and highways, not the minimum wage. That authority rests with state and federal leaders, he said.

"Myself as a small-business owner, I would get an attorney to go after you to see if this is correct," he told supervisors Monday.

Mike Inman, director of operations for 17 Pizza Hut restaurants including the one Ottumwa, said he starts employees at the minimum wage of $7.25, followed by regular raises based on experience and performance. If the minimum wage is raised, it will force him to raise wages across the board so experienced workers will still earn more.

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"We’re not just talking about the people making $7.25," he told supervisors at their meeting Monday. "We’re talking about the ripple effect."

Inman’s franchise company owns restaurants in Iowa, Illinois, Missouri and Minnesota. Among those states, only Iowa’s minimum wage remains at the federal rate of $7.25. He said his Iowa stores are the most profitable.

Unlike other businesses, he said he can't easily raise prices, because the national chain competitively advertises its prices across the country.

"If I could sell a $20 medium pizza and pay employees $20 an hour, I would love to," he said after the meeting.

Connie Hammersley-Wilson, executive director of the Ottumwa Chamber of Commerce, said she surveyed more than 130 county businesses. More than 87 percent opposed the supervisors' action, she said.

Aside from a wave of price increases, she said some full-time employees would be scaled down to part time to afford the change. Local businesses want the state or federal government to address the issue, she said.

"They just don’t feel like this is the time or the place to be doing it," Hammersley-Wilson said.

Supervisors: 'No is not an option'

Despite the critics, all three Democratic supervisors said they must do something to help struggling workers in the county.

Supervisor Steve Siegel acknowledged that the minimum wage is not a perfect instrument for combating poverty. But he said it is a good step.

"To me no is not an option here, to say, 'No, we’re not going to do this,'" he said.

Wapello's ordinance would raise the minimum wage in three increments: $8.20 in January 2017, $9.15 in January 2018 and $10.10 in January 2019.

It will then be subject to annual increases, based on the Consumer Price Index.

IOWA MINIMUM WAGE: More news stories and opinions

At the $10.10 rate, Siegel estimated that about 12 percent of the county's 24,000 workers would be affected.

"That’s a pretty significant chunk," he said.

Supervisors agreed that they would prefer to see a national or statewide solution to the minimum wage. Across the country, 29 states and the District of Columbia have raised their minimum wages beyond the federal rate.

But congressional and legislative inaction have kept Iowa's minimum wage at $7.25 since 2008.

"I think the Legislature, the Iowa General Assembly, has kicked that can down the road," Kenning said. "And it's landed squarely on communities and counties."