New Iowa Minimum Wage Takes Effect: Workers Receive Pay Increase Sunday; Other Policy Options Also Could Help
By the Iowa Policy Project
On Sunday, Iowa becomes the 29th state with a state minimum wage higher than the federal level.
“This
increase is long overdue for low-income families in Iowa,” said David
Osterberg, executive director of the nonpartisan Iowa Policy Project.
“The wage has remained at $5.15 for almost 10 years — and remains there
at the federal level.
“Iowa lawmakers and the governor have
given low-wage workers a chance to make ends meet. As our research has
shown, Iowa’s new minimum wage will ultimately help 257,000 workers and
their families build better lives.”
The law passed this year in
the Legislature and signed by Gov. Chet Culver increases the wage by
$2.10 in two steps, to $6.20 on Sunday, and to $7.25 on Jan. 1, 2008.
“We
kept hearing that Iowa should wait for Congress to act,” Osterberg
said. “Well, we’re still waiting for Congress and we still don’t know
when the federal law will change.”
Iowa joins Illinois, Wisconsin, Minnesota and Missouri among states with a minimum wage above the federal $5.15.
IPP Research Associate Elaine Ditsler noted other state policies “could help families cope with higher costs of living.”
“First among them is an expansion of the state’s Earned Income Tax Credit,” she said.
In
Iowa, 168,000 households benefit from the federal Earned Income Tax
Credit (EITC), but almost half do not claim the state credit, which is
6.5 percent of the federal. The federal credit, unlike the state
credit, is refundable and provides the full benefit of the credit to
taxpayers who qualify. Filers receive a check for the balance if their
tax obligation is not as big as the federal credit, but not for the
state credit.
“Making the state credit refundable would reach
more families,” Ditsler said, noting there are proposals in the House
and Senate for an expanded and refundable state EITC.
The Iowa Policy Project (IPP) is a nonpartisan, nonprofit research and policy analysis organization based in Mount Vernon.
See the July 2006 IPP report, “A Pay Raise for Iowa? Falling Behind at the Minimum Wage.” Other IPP reports about the minimum wage and the EITC are available at the IPP website http://www.iowapolicyproject.org.
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Saturday, March 31
New Iowa Minimum Wage Takes Effect: Workers Receive Pay Increase Sunday; Other Policy Options Also Could Help
by
Sam Garchik
on Sat 31 Mar 2007 06:08 PM CDT
Sunday, March 18
Iowa's Minimum Wage Increase and the EITC
by
Sam Garchik
on Sun 18 Mar 2007 07:37 AM CDT
Iowa's Minimum Wage Increase
By Mike Owen, IPP Iowa lawmakers earlier this year passed a minimum wage increase, the first phase of which will take effect in about two weeks. Many also have supported an expansion of Iowa’s Earned Income Tax Credit, another public policy initiative designed to “make work pay.” Iowa’s EITC — 6.5 percent of the federal EITC — is quite small in comparison to those enacted in other states, and has far less participation among low-income tax filers than the federal credit. One reason is that unlike the federal EITC, the state EITC is not refundable, so not as many taxpayers would benefit from it. There are many alternatives being considered on this issue. We have prepared two two-page backgrounders that may help you in your coverage and/or commentary. Links to those pieces are below and on our IFP website <http://www.iowafiscal.org>, or we could send PDF files directly to you for either or both if you prefer. Please contact us if you need more information. Next Piece of the Puzzle After Minimum Wage, Iowa Looks at Earned Income Tax Credit How the EITC Hits Home Impact of EITC by state legislative district (table and map) Mike Owen Iowa Fiscal Partnership news@iowafiscal.org http://www.iowafiscal.org Assistant Director The Iowa Policy Project 120 N Dubuque St. #208 Iowa City, IA 52245 (319) 338-0773 ipp@Lcom.net http://www.iowapolicyproject.org |
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