Johnson County, Two Others See Minimum Wage Rolled Back, But Pay Cuts Might Not Follow

Mar 30, 2017

Laura Taylor owns Woofables, a gourmet dog bakery in Coralville.
Credit Katarina Sostaric / IPR

Iowa’s minimum wage remains at $7.25 an hour in all counties. Gov. Branstad has signed a bill maintaining that wage level and barring any county or local government from setting a higher minimum.

Five counties have already done that, including Johnson County, which has the highest minimum wage in the state. But the new law does not necessarily mean workers who have recently gotten raises will be taking a pay cut.

Laura Taylor is the owner of Woofables, a gourmet dog treat bakery in Coralville.

Taylor said it was difficult at first to adjust to the Johnson County minimum wage of $10.10. But she said she won’t cut wages after the minimum drops back down.

“I’ve just already gone through the pain and the steps that the company has to go through to accept the $10.10 rate,” she said.

Taylor added she needs to pay that much to stay competitive. And she said when hiring, you get what you pay for.

“It’s important to me that I have an employee--even if it’s for an hourly entry-level job--that I’m getting someone who cares and is going to come in here and put that kind of effort into what they’re doing, even if all they’re doing is applying stickers to a bag,” Taylor said.

Johnson County is one of five counties in the state that have approved an increase in their minimum wage. Linn and Wapello counties have joined Johnson in already enacting higher wages, and Polk and Lee counties were planning to implement increases this spring.

The state has now outlawed those increases and set the statewide minimum wage at $7.25.

But some business owners in Johnson County are saying they will not cut wages for employees who got a raise.

“That’s not something I would feel good about doing to an employee,” said Jon Sewell, owner of DP Dough in Iowa City. “But I think what we would probably do is drop back to a lower entry-level hourly rate while people are training.”

Sewell never paid his employees as low as the state minimum of $7.25, but he says the $10.10 rate is more suitable for an employee who has been working for him  for at least six months.

Jessica Dunker is president of the Iowa Restaurant Association, which signed on in support of the minimum wage preemption bill.

“I have not heard of a member whose intention is to take someone’s wage down from where it currently is in any county in any city in Iowa, at all," Dunker said. "I do think that the payment strategies for people moving forward may take into account a difference.”

Dunker said it is possible some restaurants may make cuts to their tipped wages for new employees, but most people who work for tips will still make well over $10 an hour.

At Oasis Falafel in Iowa City, owner Naftaly Stramer said he won’t be reducing wages at all.

“[I'm] definitely not going to make any employee get a pay cut just because of the state decided whatever they decided," he said. "So we’ll keep it as it is.”

He said he would like state officials to work together with local governments rather than play a political game with local control.

“I am on the board of the downtown district and I hear all of the businesspeople—the uncertainty is definitely not good for businesses,” Stramer said.

A representative of the Iowa City Area Chamber of Commerce said he thinks wages will stay about the same as they are now.

The Iowa Association of Business and Industry and associations representing grocery stores, gas stations and restaurants supported the preemption law. It remains to be seen how businesses in the three counties with higher wages will decide to handle the change.

Supervisors of Johnson and Linn counties said they hope that business owners will choose to continue paying workers more than the state minimum wage.