This is the report Paul Iversen presented at Iowa CCI's event to bust minimum wage myths!

1. MINIMUM
WAGE MYTH
BUSTING
CCI MINIMUM WAGE FORUM
JUNE 28, 2016

2. HIERARCHY OF LAWS IN THE
UNITED STATES

3. PROBLEM:
FEDERAL AND STATE INACTION

4. SOLUTION:
LOCAL INITIATIVES

5. LOCAL MINIMUM WAGE LAWS
•Washington, D.C.
•Six Counties, including Johnson
County, IA
•28 Cities, including Chicago, St.
Louis, Kansas City, and Portland
and Bangor Maine

6. IT IS LEGAL FOR
IOWA COUNTIES
TO PASS MINIMUM
WAGE
ORDINANCES
LOCAL ORDINANCES PLAY A
VITAL ROLE IN KEEPING
MINIMUM WAGE MEANINGFUL

7. FAIR LABOR STANDARDS ACT
•Passed 1938
•During Depression.
•Stated Purpose
–To keep America’s workers out
of poverty, and
–increase consumer purchasing
power in order to stimulate the
economy.

8. OPPONENTS PREDICTED
ECONOMIC RUIN
“Do not let any calamity-howling executive
with an income of $1,000.00 a day, who has
been turning his employees over to the
Government relief rolls in order to preserve
his company's undistributed reserves, tell
you -- using his stockholders' money to
pay the postage for his personal opinions --
tell you that a wage of $11.00 a week is
going to have a disastrous effect on all
American industry.”
- FDR fireside speech, June 24, 1938

9. FLSA ALLOWS HIGHER COUNTY
MINIMUM WAGES
• No provision of this chapter or of any order
thereunder shall excuse noncompliance
with any Federal or State law or
municipal ordinance
establishing a minimum wage
higher than the minimum wage
established under this chapter
29 U.S.C. §218(a)

10. IOWA COUNTY HOME RULE
• Counties . . . are granted home rule
power and authority, not inconsistent
with the laws of the general assembly,
to determine their local affairs and
government, except they shall not
have power to levy any tax unless
expressly authorized by the general
assembly.
Constitution of the State of Iowa, Article III, Section 39A.

11. STATE LEGISLATURE DOES
NOT NEED TO GIVE COUNTY
POWER
•The proposition or rule of law that a
county or joint county-municipal
corporation possesses and can
exercise only those powers granted
in express words is not a part of the
law of this state.
Constitution of the State of Iowa, Article III, Section 39A.

12. COUNTY HAS POWER UNLESS
LEGISLATURE SPECIFICALLY
TAKES IT AWAY
•A county may exercise its
general powers subject only
to limitations expressly
imposed by a state law.
Iowa Code § 331.301 ¶ 3.

13. COUNTIES ALLOWED TO SET
HIGHER LOCAL STANDARDS
•A county shall not set standards and
requirements which are lower or less
stringent than those imposed by state law,
but may set standards and
requirements which are higher or
more stringent than those imposed
by state law, unless a state law provides
otherwise.
Iowa Code § 331.301 ¶ 6.a.

14. IOWA MINIMUM WAGE LAW
• Short Statute.
• Adopts Fair Labor Standards Act except
–Changes Jurisdiction Amount to
$300,000 in revenue instead of
$500,000;
–Allows training wage for first 90 days for
any age worker; and
–Sets tipped minimum to 60% of
minimum wage.
• Does not say Municipal Ordinances are
unlawful.

15. POLK COUNTY
NEEDS A RAISE
MINIMUM WAGE TOO LOW TO
FULFILL ITS INTENDED
PURPOSE

16. 2016 FEDERAL AND STATE OF
IOWA MINIMUM WAGE
•$7.25 per hour

17. MINIMUM WAGE TODAY BUYS
LESS THAN IT DID IN 1968
$11.05
$7.25
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
1968 2016
Min.Wagein2016Dollars
Year

18. PERCENTAGE OF IOWANS EARNING
LESS THAN 1968 MINIMUM WAGE
Occupation Percent below
1968 Min.
Wage
Number of Workers
(approx.)
All Occupations 25% 381,737
Food Preparation and
Serving Related
Occupations
77% 100,962
Personal Care and Service
Occupations
58% 26,256
Sales and Related
Occupations
45% 66,744
Building and Grounds
Cleaning and Maintenance
Occupations
45% 21,087

19. THE PEOPLE
SUPPORT A
HIGHER MINIMUM
WAGE
COUNTIES AND CITIES
AROUND THE COUNTRY ARE
RAISING THE MINIMUM WAGE

21. August 13-18 2015 McLaughlin Associates Poll of Likely Voters in 7 Swing States
77%
97%
87% 87%
23%
3%
13% 13%
0%
20%
40%
60%
80%
100%
120%
Republicans
Republicanos
Democrats
Demòcratas
Independents
Independientes
All Likely Voters
Do You Support Raising The
Minimum Wage?
Yes No

22. 71%
75%
63%
29%
25%
37%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$11.00 $12.50 $15.00
Do You Support Raising the
Minimum Wage to the Following
by 2020?
Support Oppose
Source: Hart Research Associates Poll of 1002 Adults Nationwide, conducted from January 5 to 7, 2015

23. 92%
53%
73% 75%
8%
47%
27% 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Democrats Republicans Independents Total
Do You Support $12.50 Minimum
Wage By 2020?
Support Oppose

24. WHEREVER VOTERS GOT TO
DECIDE:
A HIGHER MINIMUM WAGE WON
+ Illinois passed a non-binding referendum, but legislature expected to listen to voter

25. MINIMUM WAGE
EFFECT ON JOBS
NO LOSS OF JOBS

27. WHY DOES HIGHER WAGE
NOT MEAN FEWER JOBS?
Low Wage
Workers Have
More Money Buys
Things
couldn’t
afford
before
Store
orders more
goods
Factory
makes more
goods
Economy
Grows,
creating Jobs

28. RESEARCH CONFIRMS EFFECT OF
HIGHER COUNTY MINIMUM
WAGE
• University of California, Berkeley Study
• 288 US counties who raised their minimum
wage while a neighboring county did not,
• Between 1990 and 2006
• Found no evidence of lower employment in
counties with a higher minimum wage
compared to the lower-wage county next to
it.
Michael Reich, Arindrajit Dube, and T. William Lester, “Minimum Wage
Effects Across State Borders,” Review of Economics and Statistics

29. RESEARCH CONFIRMS EFFECT OF
HIGHER COUNTY MINIMUM WAGE
• Center for Economic Policy and Research
Study
• City minimum wage increases in San
Francisco, CA and Santa Fe, NM
• Found that “citywide minimum wages can
raise the earnings of low‐wage workers,
without a discernible impact on their
employment…”
John Schmitt, Why Does the Minimum Wage Have No
Discernable Impact on Employment? (February 2013),
Center for Economic and Policy Research

30. LOWER EMPLOYER COSTS
OFFSET SOME OF THE COST
• University of California, Berkeley study
• Effect of a wage increase for workers at the
San Francisco Airport from $6.45 to $10 per
hour.
• Found that annual turnover among security
screeners plunged from 95 percent to 19
percent.
• Reducing turnover saved employers a
significant amount by reducing recruitment,
re-training and re-staffing costs.
Michael Reich, Peter Hall, Ken Jacobs, “Living Wages and Economic
Performance: The San Francisco Airport Model” 2003.