Iowa’s minimum wage laws are outdated


In 2020, 25 states increased their minimum wage, and Iowa was not among them. In fact, Iowa is among the 21 states still stuck at $7.25, the federal minimum wage since 2009. This isn’t a survivable income for anyone regardless of lifestyle or frugality. According to a 2020 report from the National Low Income Housing Coalition, Iowans would need to work 85 hours a week in order to afford to rent a two-bedroom apartment on a minimum wage income, and this is only taking rent into account – don’t count on affording groceries, utilities, insurance or anything else.

When the cost of living increases, so should the minimum wage; if it doesn’t, the minimum wage will quickly become insufficient. A gallon of Prairie Farms milk cost $2.69 in 2009 – the year the federal minimum wage was increased to $7.25. Now, it costs $4.12 in 2020, though the federal minimum wage remains the same. Most states have reflected this economic change and increased their minimum wages, though Iowa continues to employ a regressive approach, and its people are suffering for it.

But doesn’t increasing the minimum wage lead to higher prices? According to a study conducted by the Upjohn institute, not only does a small minimum wage hike (about 5-15% at a time) not lead to higher prices, they actually tend to decrease. Larger minimum wage hikes may result in small price increases. 

Therefore, from a practical outlook, it stands to reason that we can please both those concerned about insufficient income and those concerned about inflation by gradually increasing the minimum wage in increments (which most states are in the process of doing currently).

Of course, it’s important to remember that price increases, when they do occur, tend to be minimal at best. To compensate for a 10% minimum wage increase, a business would only need to raise their prices by a maximum of 0.1% – this is the equivalent of changing a $100 product to $100.10. This is a small price to pay for financial security and livable wages for all workers.

According to George Akerlof of Georgetown University, businesses also benefit from the morale boost linked to the wage increase – sort of like how a raise works. Higher morale means higher productivity, which benefits the business just as much as the workers. Economists Laura Bucilia and Curtis Simon also concluded that higher minimum wages are associated with lower rates of absenteeism for non-illness reasons.

There are over 500,000 minimum wage workers in Iowa, 86% of whom are adults. Many of these workers have dependents, such as children and elderly parents who rely on them, and should not have to work more than 40 hours per week in order to live comfortably and have financial stability. A full-time worker should be able to afford bills and housing regardless of their job and education level, and Iowa’s regressive minimum wage laws prove that Iowa legislators don’t value the working class. When cries for a livable wage are met with indifference or concern over paying a few more cents for goods, it shows an undeniable level of privilege and disinterest in the needs of others.