Iowa: Once a Leader, Now a Laggard on Minimum Wage
Outdated Policy Compounds Status as Low-Wage State
Labor Day Fact Sheet

1-page PDF

Iowa was once a leader among states on the minimum wage. In 2007, lawmakers passed a two-step increase in the state minimum wage that took effect a year-and-a-half before the federal wage.

  • Iowa’s minimum wage rose to $7.25 on January 1, 2008. The federal minimum wage finally reached that level in late July 2009.
  • At the time Iowa moved to $7.25, only Illinois among neighboring states was higher.
  • Iowa has now remained at $7.25 for 6 1⁄2 years — that’s 6 1⁄2 years of price increases in gas, housing, utilities, groceries, clothes — and no increase in pay.
  • To date 23 states and Washington, D.C., have a minimum wage above the federal wage.*

Increasing the minimum wage to $10.10 would have a positive impact on 306,000 Iowans — or about  about one-tenth of Iowa’s population.

  • Of those affected, almost 4 out of 5 workers — 78 percent — are age 20 or over. Don’t be fooled by the old myth that this is about teen-agers.**
  • Of those affected, 43 percent work full time.**
  • Of those affected, 58 percent are women.**
  • More than 4 in 10 who would be affected have at least some college education (43 percent). In fact, 9.2 percent have at least a Bachelor’s degree.**

In many cases, those who would be affected by an increase in the minimum wage have families to support and are barely making ends meet.

  • Of those affected, 20 percent are parents.**
  • Over 25 percent have a family income that is less than $20,000.**
  • For all workers affected, minimum wage on average accounts for 46 percent of family income.**
  • Almost 18 percent of those affected are the sole providers of family income; among those who are parents, 20 percent are the sole providers of family income.**
  • As we have shown in our most recent Cost of Living in Iowa report, the minimum wage doesn’t even come close to paying the bills — a single parent who has two children and is working a full-time job would need to make $28.11 per hour just to be able to pay for a basic, no-frills monthly budget; $56,212 annually before taxes and credits.*** Minimum wage pays less than $15,000.

Iowa is a low-wage state.

  • The Iowa median wage tracks below national trends and below regional trends.****
*     U.S. Department of Labor, http://www.dol.gov/whd/minwage/america.htm                 
**    Economic Policy Institute, December 2013, http://www.epi.org/publication/raising-federal-minimum-wage-to-1010/
***   Iowa Policy Project, The Cost of Living in Iowa 2014, http://www.iowapolicyproject.org/2014Research/140810-CostOfLiving.html; assumes no work supports such as child care, housing, food or energy assistance.
****  Iowa Policy Project, The State of Working Iowa 2014, http://stateofworkingiowa.org/wages-2/
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