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Higher minimum wage gets maximum support

Public hearing moves county closer to new wage ordinance
Ten-year-old Joshua Hurtado was one of nearly 60 people who spoke at the Johnson County Board of Supervisors’ Aug. 12 public hearing on a proposed ordinance to raise the minimum wage countywide. (photo by Lori Lindner)

JOHNSON COUNTY– Though the Johnson County Board of Supervisors heard overwhelming support for an ordinance that would raise the minimum wage countywide, there are still many unanswered questions, pockets of uncertainty and details to be worked out before a final vote.
The board held a public forum Wednesday, Aug. 12, at the Johnson County Health and Human Services building to allow the public to weigh in on a proposed ordinance that would increase the minimum hourly wage for all workers in Johnson County from $7.25 to $10.10 by January 2017.
The proposed implementation timeline would require employers to pay at least $8.20 by Nov. 1, increase it to $9.15 by May of next year, and add a final increase on Jan. 1, 2017, to reach the $10.10 mark.
Last Wednesday, approximately 150 people filled the meeting space and spilled into the hallway, as more than 50 area residents lined up at the podium to make a case for or against the proposal.
Most of those who spoke thanked the supervisors for their effort, and many offered personal stories of how difficult it is for families to make ends meet on the current minimum wage, even when two adults in the household are working; sometimes at multiple jobs.
“I have a job and my husband works a job, and even then it’s difficult for our children,” said Irma Botello, a member of the Center for Worker Justice of Eastern Iowa. “What we are facing is trying to pay our bills– our water and (electricity). We are not trying to live in luxury.”
But not everyone spoke in support of the wage increase, and some remained undecided on the issue, including North Liberty business owner Dennis Tallman.
Tallman said he attended the forum to learn more about the proposal. He owns and operates an AlphaGraphics printing franchise with eight employees, and said there are many financial considerations when operating a small business, including wages.
“The health of a business is determined by several different ratios, and we call those KPI– key performance indicators,” said Tallman. “Those are things like ratios of salaries to sales, rent to sales, taxes, employee benefits, expenses for equipment and materials. If any of those get out of whack, your business is no longer healthy; any of those can actually cause a business to fail. Our prices are determined by the market, and consequently, our wages are too.”
Tallman said his workers make well above the minimum wage, but he knows how closely employers must track those KPIs.
“I can accommodate higher wages with higher sales, as long as I can continue to grow my business. But typically, growing a business means hiring more workers, not necessarily giving everybody a raise. The market determines the wage for a given job and the value of that job,” he added.
While the supervisors have each stated support for raising the minimum wage since bringing it to the board’s agenda earlier this summer, the concerns of business owners, like Tallman, were also on Supervisor Terrence Neuzil’s mind when the board met the following day, Thursday, Aug. 13, and again addressed the ordinance.
“Is anyone going to be a voice for the employers?” Neuzil asked. “This is a pretty quick turnaround on a pretty major thing. We are asking businesses, (to do this) by Nov. 1, who maybe have a two- to five-year strategic plan on how they are going to run their business.”
Supervisor Rod Sullivan replied that keeping the increases incremental should make it easier.
“The first step is $8.20 an hour,” said Sullivan. “I’m just not that sympathetic to anyone who isn’t already paying $8.20.”
In addition to business owners, Neuzil also wanted to hear from the county’s municipalities before making a decision. While the proposed ordinance would increase the minimum wage across the county, cities would still have the legal ability to pass their own ordinances to set a lower minimum. As long as city and county ordinances are not in conflict with or less restrictive than state code, it is generally understood that they can set their own laws, reminded Supervisor Janelle Rettig.
“Cities do not have to back us. They can pass whatever ordinance they want,” Rettig said. “But I am not willing to put 19,000 people on hold so that a bunch of elected bureaucrats can discuss whether or not poverty needs to be addressed.”
Neuzil said he still wanted cities’ support.
“This doesn’t work without city governments,” said Neuzil. “If they all vote against this, it will be a nice ordinance for rural residents.”
In order to keep communication with the county’s municipalities open, the supervisors directed Administrative Assistant Andy Johnson to distribute an update of the board’s conversation and a copy of the draft ordinance showing its recent revisions.
Those revisions changed language in the draft specifying who would be required to pay the new wage, how it would be sustained in the future and how it would be enforced.
The ordinance initially stated it would apply to anyone operating a facility within Johnson County, but the supervisors were concerned that would give companies a loophole to establish headquarters just outside the county and still have its employees working here while paying them less.
Also, the supervisors changed the way the raise would be structured after January 2017. Hoping to keep the wage commensurate with inflation, they suggested tying it to the Consumer Price Index, or CPI. Published annually by the federal Bureau of Labor Statistics, CPI is a quantitative measure of inflation at the consumer level, and is used to make cost of living adjustments to Social Security payments and employee pay rates.
Sullivan noted that if the State of Iowa (which last raised its minimum wage in 2007) had used even a three percent figure to keep pace with the rising cost of living, “we’d be at $8.91 right now,” he said. “At the very least, people who are poor would have had seven years of more money, and that’s an important thing to not overlook.”
Sullivan wanted to include the CPI provision in the new ordinance to stave any future disparity.
“That’s why I would like to see indexing; because we are not always going to be the five that sit up here,” Sullivan said.
As for enforcement, the current draft follows Iowa Code Chapter 91A, which gives the State Labor Commissioner the authority to investigate wage claims and enforce wage laws; however, officials from the Labor Commissioner’s office have been quoted in the media questioning the supervisor’s constitutional authority to even impose a minimum wage different than the state’s.
That was also the concern of North Liberty council members when they discussed the county’s proposal at their Aug. 11 meeting.
North Liberty City Council member Coleen Chipman said she questioned the legality of it based on comments she had heard, and feared it could actually hurt the local economy.
“You could have employers choosing not to locate or grow a business anywhere within Johnson County if they have to pay that much of a higher wage,” Chipman said. “Across the state, it’s easier to justify, but (not) if it’s only one county.”
Councilor Brian Wayson agreed.
“I don’t think it’s the county’s role, or for that matter our role, to say how much employers should pay,” Wayson said.
Johnson County Attorney Janet Lyness submitted an opinion, last week, that there was no case law concluding that an ordinance setting a minimum wage higher than the state or federal level was illegal, and offered her support for it to move forward. But the new ordinance as drafted did not provide for local enforcement.
Rettig insisted, therefore, the ordinance be written with language allowing the Johnson County Attorney’s office to handle wage complaints.
“If you’re poor, you are already being taken advantage of by your boss, and then you’re told go to the state– which is already understaffed and doesn’t want to do this– or find a lawyer and file a lawsuit. They should be able to come to the county government, who adopted the ordinance, and say ‘help me,’” Rettig said.
During the board’s meeting, Sullivan refuted arguments the ordinance could harm businesses or the economy, pointing to data that suggests its positive effects, including a report issued this month by the Iowa Policy Project, which evaluated the impact of a higher local minimum. The report, authored by Peter Fisher, concluded that a higher minimum wage boosts spending, reduces employee turnover and hiring costs, and leads to additional local retail and service jobs.
“Decisions made on data are a very good way to go,” Sullivan said. “There is all this data out there, and we’ve seen a bunch of it; where is the data that shows that this is bad? What we can study is what has happened, and the data is supportive of this.”
Find Fisher’s report at http://www.iowapolicyproject.org/2015docs/150811-minwage.pdf.
The board of supervisors plans to appoint a citizens’ advisory committee to study the issue and advise the board on how to implement the ordinance to keep pace with the county’s economic circumstances. They also plan to continue discussion throughout the week, with a goal to have the ordinance ready for a first vote on Thursday, Aug. 27, at 9 a.m. The ordinance must pass through three readings in order to be adopted.