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Tiffin’s public gives input on minimum wage

Russ Meade, a CPA whose business has served the Tiffin area since 1998, was the lone voice of opposition during a public hearing on a minimum wage increase at the Tiffin City Council’s Nov. 10 meeting. (photo by Lori Lindner)

TIFFIN–Tiffin City Council members wanted more input on the minimum wage issue.
They got it last Tuesday, Nov. 10, in a public forum held just for that purpose.
After two council discussions on whether or not to abide by Johnson County’s new minimum wage rule ended in stalemates, the group asked to hold a public hearing on the matter. No separate ordinance was tied to the public hearing and the council expected to take no action, but they did wish to hear from members of the community about how an increase, or lack of one, would impact them.
The Johnson County Board of Supervisors adopted an ordinance that raised the minimum wage, countywide, from the state’s $7.25 an hour to $8.20 per hour effective Nov. 1. Two additional increases are planned in May 2016, to $9.15, and in January 2017, to $10.10. Cities have the authority to adopt their own ordinances setting a lower wage than the county’s or keeping it at the state’s minimum if they choose. So far, Oxford, Solon, Swisher and Shueyville have voted to stay at the state wage level. The other cities in Johnson County have taken no action, allowing the first increase to take effect in their communities.
Nine individuals came to the podium to persuade Tiffin’s government to continue to do nothing in the future.
Many of the speakers cited a moral and ethical obligation, offering personal stories about workers who struggle to make a living while earning minimum wage. Resident Joy Ward said she is a 62-year-old veteran who makes more than twice the minimum wage, draws veteran benefits and has no children to support, but still finds it difficult.
“I work at a job across town, and I can barely make ends meet,” said Ward. “I don’t have credit debt, my car is 20 years old, and I don’t understand how young people can even afford to put kids in daycare while they try to get a job. It’s important not to keep people down at a poverty level.”
Resident Nicole Upchurch said she and her husband, both educators, have three children.
“Even with us having good jobs, we are just making it. That’s just the reality,” said Upchurch. She said she went to nearly every business in Tiffin and spoke with managers and workers to learn how wages affect them.
“One person went to beauty school and felt quickly that she had to drop out because the amount of debt she would incur was beyond what she could fathom. She is working here now at minimum wage,” said Upchurch. “Even $10.10 isn’t enough to pull you out of poverty. But it’s a step in the right direction. When we help everyone, I just think it’s the kind of community we want to be.”
And resident Miriam Aguilar, a single mother with two children and two jobs, said she hoped the council would continue to make Tiffin the kind of place she is proud to call home.
“Since the time we met this tiny city, we fell in love with it. We fell in love with the people and the beauty of a community who cares for others, and a place where we can feel safe,” said Aguilar. She spoke highly of the Clear Creek Amana School District and all the opportunities it provides. “I feel so proud to live in this town who cares for its future and the kids. I also feel responsible for all the other people who don’t have the opportunity to earn the money. So many people dreaming to have a great education in other places, and we have it here. Going back to reduce the minimum wage will take Tiffin out of the pool of the working force.”
Other arguments for an increased minimum wage were grounded in its economic benefits.
Nathan Kieso argued that raising the wage is actually good for businesses.
“When wages go up, turnover goes down. That means you aren’t training (new) people, and that’s good on the bottom line,” Keiso said. “When low wage workers have money in their pockets, they are going to spend it in their communities. It’s going to attract people to Tiffin. If you have good wage jobs in Tiffin, people are going to move here.”
Iowa City resident Robin Clark Bennett, an educator with the University of Iowa Labor Center, also spoke in support.
“It has been eight years since minimum wage has increased. During that time, the minimum wage has not just stayed stagnant, it’s fallen behind,” said Bennett. “People survive, and the way they survive is our tax dollars pay the difference. We subsidize the companies that refuse to pay a living wage through our charitable donations and tax dollars.”
Johnson County’s poverty level is at 18 percent, even though many social service recipients work full time or more than one job. It’s a safety net that should be for non-working people in need, she added, and offered research to the council.
“Studies refute all the sky-is-falling claims,” Bennett said. “The arguments against it have been the same since 1938 when the federal minimum wage went into effect; that it’s government overreach; that businesses would go under; that people wouldn’t have jobs. Those are the most disproven myths in our country’s history. We have hundreds of examples of the wage going up, and the sky has never fallen, but more money goes into people’s pockets and they have a little more to survive.”
Just one person spoke against the county’s statutory increase. CPA Russ Meade, of rural Tiffin, said his accounting firm works with more than 100 small businesses in the area to help them comply with federal and state payroll laws. Most businesses with less than $300,000 gross annual receipts are exempt from having to pay a wage higher than the federal minimum. Until recently, he said, it wasn’t an issue here because the county, state and federal minimum were the same. Also, the first 90 days of employment are exempt from the higher minimum wage requirement. Therefore, Meade concluded, daycares could continue to hire summer help at $7.25 per hour if the employees work 90 days or less. However, for permanent workers, smaller businesses making less money would have a competitive advantage by being allowed to pay them less.
“In a town like Tiffin, we are going to be in a situation where we’ll have one daycare that is exempt and one isn’t. That is the primary reason I oppose this,” Meade said. “We need to have a level playing ground so businesses can succeed.”
With the rule change, Meade’s firm is recommending daycare businesses increase their fees between 15 to 25 percent to offset the impact of the new wage and its accompanying taxes and benefits.
“If a family was paying $800 per month for child care, they should expect to pay over $1,000 per month in the near future,” he said.
Enforcement was another concern for Meade. According to a poster on Johnson County’s website, the rule may be enforced in several different ways. Claims may be made with the Iowa Division of Labor. Also, violations are considered county infractions, punishable by a civil penalty up to $750 for each initial violation. Investigations of county infractions are within the jurisdiction of the Johnson County Sheriff, according to information on the document, and that troubles Meade.
“How comfortable are we with sending in sheriff deputies to review books and records?” Meade asked. “I believe our sheriff deputies’ time can be put to better use in the City of Tiffin.”
Further, Meade said in an interview after the meeting, current labor laws provide privacy protection for businesses under investigation, but information collected by the sheriff’s department often becomes public information.
“The State of Iowa is the best and most efficient option for enforcing labor laws,” Meade said. “It is in Tiffin’s best interest to opt out.”
After hearing from the public, city council members came no closer to consensus.
Councilor Al Havens continued to advocate for a tiered system that would allow employers to pay the lower state wage to workers under age 18, afraid the higher wage would encourage businesses to hire only adult workers and eliminate jobs for teens.
“There are several states that have adopted a tiered minimum wage based on age or student status,” said Havens. “There is a precedent.”
Fellow council member Mike Ryan remained supportive of the county ordinance and against a tiered system.
“There are myths that the minimum wage is only designed for entry-level for teenagers, and the facts don’t support that,” Ryan said. “The average age of minimum wage workers is 35 years old. And 88 percent of minimum wage earners aren’t teenagers.”
Ryan said while he believes job opportunities could decrease for teens, the risk to the adult work force should be of more concern.
“If we give businesses a choice of hiring a single person with a dependent who is 20 years old at a higher wage, or get a 17-year-old to do the same work, they will… hire as many children as they can to avoid paying living wage to adults,” he said.
Havens wasn’t moved.
“My response to that is any business still has to look at their liability,” Havens replied. “I think the businesses in this community are responsible and respectful enough to hire the best people, regardless of the wage.”
In previous meetings, council member Jim Bartels supported the required increase, while councilor Jo Kahler opposed it. Neither offered additional comments last week.
Council member Peggy Upton remained uncommitted, questioning the increase and its true benefits.
“Russell (Meade) made a good point as far as daycare costs. Is that going to make it a wash, if we do this?” she asked. “And I don’t think it will just be daycare that will go up; everything will go up. I don’t think the businesses will absorb those costs, I think they will pass them on to all of us. Maybe that’s acceptable. But if other costs go up incrementally, have we really done any good?”
Ultimately it may be six months before Tiffin explores that question in any more depth. Since the next increase won’t come until next spring, Mayor Steve Berner said he does not expect the council to take any action or hold additional discussion on the issue until then.