The current U.S. economy has given the nation the longest continuous peacetime expansion in our history. For almost a decade, unemployment has remained low and inflation under control. The same period has seen huge increases in CEO compensation. Unfortunately, unlike the same period of economic expansion in the 1960s, the wealth being created is not shared broadly across all sectors of the population. A living wage ordinance is a modest attempt to address this imbalance.

Iowa has too many low-wage, low-benefit jobs. Almost half of all jobs in Iowa pay less than $10 an hour. One out of seven Iowans work for an hourly wage of less than $7 an hour. Overall, Iowa is 38^th in the country in terms of wages.

Thus, the Iowa Federation of Labor, AFL-CIO supports the following two initiatives to address this imbalance:

In addition, the Federation opposes the proposal to tout Iowa’s right to work status on economic development material.

A minimum wage increase is part of a broad strategy to end poverty. As welfare reform forces more people to rely on their earnings from low-paying jobs, a minimum wage increase will have a greater impact in reducing poverty.

It should be noted that the last minimum wage increase was in 1997. To maintain the purchasing power of the $5.15, the rate today would have to increase to $5.56. By the time the Vilsack-proposed $0.50 increase takes effect in January 2002, the minimum wage will be slightly below its 1997 rate.

A living wage is a wage that would support a family with only one full-time worker above the federal poverty level. That rate is $8.20 an hour and the Governor’s proposal to require that rate as a condition of economic development grants or aid to a company deserves support.

It is absurd that our tax dollars would be used to subsidize sub-poverty pay which is the situation today. Ironically, while companies profit on the backs of these workers many of the workers have to turn to food stamps, housing and heating assistance and Medicaid to make ends meet.

As tax payers, we are hit with a double whammy: first, we’re subsidizing low wage companies; then we have to provide services to assuage the poverty of their workers.

Better that the companies be required to pay fair wages from the start. The Federation would urge that the living wage also be extended to those contractors that provide service to the state.

The desire of some legislators to mandate Right to Work language in Iowa Department of Economic Development promotional materials belies the claim that Iowa is interested in high road economic development. Right to Work is synonymous with low wages.

Thus, to promote it is to encourage low-wage, low-road employers. Rather, Iowa Economic Development material should stress the position: our excellent education system, our productive work force.

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