Press "Enter" to skip to content

Op Ed: Give St. Louis wage a chance — you just might like what you see

In this tale of two cities, passing a local minimum wage increase was the best one could make of the worst of times.

Dickens might have his own observations on the stark inequalities characterizing our day and age, but the contrasting tales of similar wage ordinances in Johnson County, Iowa — the Iowa City-Coralville area — and St. Louis, Missouri, vividly illustrate the difference local and state policies can make.

In both Midwestern communities, local officials acted in 2015 to raise the minimum wage for similar reasons: the ongoing failure of state and federal lawmakers to address the growing crisis of poverty wages. Johnson County’s 2015 ordinance boosted the minimum to $8.20 November 1 that year, $9.15 on May 1 of 2016, and finally to $10.10 in January of this year. The St. Louis ordinance was similar. It would have gone to $8.25 on October 15th, $9 on January 1, 2016, and $10 on January 1, 2017. In both cases, opponents argued that such an increase would cost jobs.

In the St. Louis case, opponents were able to tie up the increase in judicial proceedings, while the Iowa City-area wage was implemented on schedule, permitting a real-world test of opponents’ arguments in both locales. No evidence supports the typical, unfounded arguments made against local wage increases during three steps implemented over 14 months in Johnson County.

Unemployment in Johnson County hovers between 2 and 3 percent, remaining steadily below Iowa’s already low rate (blue line), continuing a downward trend that began well before the three local bumps in the minimum wage since November 2015. The local economy continues to thrive; employment in the retail, accommodation and food service sectors has continued to grow since the wage was raised.

Screen Shot 2017-04-04 at 4.35.44 PM

Ignoring the experience of Johnson County, Iowa’s state legislators and governor nullified the wage increase. Now, legislators in Missouri threaten to do the same, not even giving the St. Louis ordinance a chance.

Special interest groups like the National Restaurant Association with a vested interest in low wages have the ear of legislators when everyone should be paying attention to the facts.

The Iowa Policy Project and Economic Policy Institute have estimated that 10,000 Johnson County workers have already benefited from the increases. Estimates from St. Louis predict benefits to as many as 69,000 workers. The modest raise lets low-wage workers spend a few more hours with their children instead of working extra in second and often third jobs. They can buy the kids shoes that fit or worry a little less about paying the utility bill. This is critical, because the National Federation of Independent Business, a perennial opponent of minimum wage increases, often notes the importance of consumer spending in driving economic growth.

Businesses in this community get it. Offered the chance to return to a low-wage economy, many employers so far are saying no. Not only can they count on lower turnover at the higher wage, and a boost to business from workers’ increased spending power, they also can appeal to local consumers who like to patronize high-road businesses.

So, despite state legislators’ desire to roll back wages in Iowa, $10.10 will remain as a moral wage floor in Johnson County, with spillover effects in neighboring communities, until voters can compel the Legislature to repeal the new ban on local increases or raise the statewide standard.

How would St. Louis workers, employers, and consumers be faring now had the city’s 2015 ordinance been given a chance to take hold? Johnson County offers a compelling vision, because we know thousands benefited and will continue to do so, only because local leaders took the initiative to set a higher bar.

If local officials can help to lead workers out of poverty, why would state legislators — in any state — stand in their way?

Mike Owen
Director, Iowa Policy Project