Cedar Rapids Weather
More Than 80 Protest in Iowa City Over $7.25 Minimum Wage
By Alison Sullivan and Chris Earl, Reporters
IOWA CITY, Iowa - Workers clad in red shirts wielded colorful signs marched on the Iowa City Pedestrian Mall, as the group of 80 chanted over and over, "Can't survive on $7. 25."
Local workers and supporters demanded stronger enforcement of wage payment laws and increasing the minimum wage at a rally on Thursday. They insisted the current rate of $7.25 an hour is not enough to support their families.
"Everything keeps going up," said Valentine Ruiz, a local worker from Lone Tree. "Why doesn't the minimum wage increase?"
The last minimum wage increase was in 2009 as part of the Fair Minimum Wage Act of 2007. President Barack Obama proposed raising the federal minimum wage from $7.25 to $9 in the next few years, during his February State of the Union speech. Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., later proposed the Fair Minimum Wage of 2013, which would raise the minimum wage over the next three years to $10.10 by 2015.
The Harkin-Miller bill also calls for increasing wages for tipped workers, who can be paid as low as 60 percent of the minimum wage at $4.35 an hour. The proposal also calls for indexing minimum wage with inflation, which would adjust the rate annually and automatically.
The Bureau of Labor Statistics reported that 25,000 Iowa workers were paid minimum wage in 2012, while another 21,000 made below minimum wage.
Hans Isakson, economic professor at the University of Northern Iowa, said an increased minimum wage can force business owners to make tough decisions.
"There will be plenty of employers who then cut back on the hours of their workers," Isakson said. "They'll cut back hours or might lay some people off."
A study from the Iowa Policy Project disputes claims jobs would be lost and said if the minimum wage was increased to $10.10 under Harkin's proposed bill that would generate $51.5 billion in raises to millions of workers over the three increases and increase GDP by $33 billion as workers spend at local businesses. The increased economic activity could add 140,000 new jobs, the report said. A study from the Economic Policy Institute estimated the bill would affect about 332,000 Iowans.
"When everyone in a community can afford to pay rent and buy from a local grocery store that helps everyone, including local business owners," said Misty Rebik, executive director of Center for Worker Justice of Eastern Iowa and organizer of Thursday's rally. The event was organized by CWJ and the Iowa City Federation of Labor, AFL-CIO.
The rally also addressed stronger wage payment laws. Ruiz, 48, said a court case proved a former employer owed him $1,600 in unpaid wages and he has yet to receive what he said he's owed.
John Solow, economic professor at the University of Iowa, said minimum wage is largely a political decision as politicians respond to constituents' calls for higher wages, but with the current onslaught of economic issues he said Washington D.C. is a little tied up.
"Right now the fact that the government is shut down and the debt ceiling needs to be raised within the next two weeks and the U.S. might default on its debt, the consequences of that are far more troubling," Solow said.