New report says minimum wage hike could benefit businesses

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JOHNSON COUNTY, Iowa (KCRG TV-9) Johnson County had a higher minimum wage for about a year and a half, and a new report out shows what impact it had. County leaders say it proves that the higher wage doesn't negatively affect businesses.

"All of the potential downfalls to a decrease in minimum wage seem not to have happened. The most important thing that we are trying to do is get more low-wage workers with money in their pockets. That did happen," said Johnson County Supervisor Rod Sullivan.

The new report shows even though weekly pay went up, business activity didn't go down. Sullivan says he's not surprised.

"Kind of basic economics," said Sullivan. "I mean the real problems that we're having in this community and in this country is that people don't have enough money to spend. We've got to get some dollars in the hands of lower wage folks so that they can spend the money and make the economy hum."

Cedar Ridge Winery Manager Chris Miller says they've raised their pay in the past and have only seen benefits from it. He says his employees even stayed longer.

"We didn't see any ill effects," said Miller. "We were already above that minimum wage and did a raise pay at one point and actually decreased our labor costs because of less turnover."

Sullivan does recognize if there is a raise in minimum wage, there should be some sort of way state leaders can decide which cities might need more than others.

"There's places in like southwest Iowa where you probably don't need quite as much money as Des Moines or Iowa City, but let's account for that then," said Sullivan.

Miller points out that if you do pay employees more, they generally do a better job.

"I think if you value an employee and show time that they are going to work harder for you," said Miller.

Miller says the board will turn this study over to the Iowa legislature. He's hoping it will help strengthen the argument to allow local governments to raise the minimum wage again.