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Tiffin council split on new wage ordinance

Two businesses oppose increase

TIFFIN– Tiffin needs more information before taking action on the county’s new minimum wage ordinance.
The Tiffin City Council had a spirited discussion on the issue at its Oct. 14 pre-meeting work session, with two councilors expressing support of an increase, two councilors expressing opposition and one who wondered if a compromise setting age classifications and commensurate wages for workers would be legal.
After 30 minutes of discussion, members came no closer to a consensus about whether or not the City of Tiffin should accept Johnson County’s minimum wage ordinance mandating increases beginning next month.
Instead, the group directed City Administrator Doug Boldt to research its two biggest questions: can the city pass a tiered wage system based on age of employees, and what is the potential impact of waiting until after Nov. 1 to take action.
On Nov. 1, the county minimum raises to $8.20 per hour, with an increase to $9.15 on May 1, 2016 and a jump to $10.10 in January 2017. Thereafter, the county minimum wage would increase by an amount corresponding to the U.S. Consumer Price Index.
At last week’s work session, two Tiffin business owners spoke against the increase, as did Mayor Steve Berner.
“I would like to see the city opt out,” Berner said. “I think it’s going to be detrimental to certain businesses, and potentially, people that patronize those companies will be paying higher prices. That’s where the pain will be felt.”
That point was also raised by resident Bob Conrad, who plans to build a daycare center in the new Prairie West development on Highway 6 near Clear Creek Amana High School. Conrad said his startup costs would be high because he is building a large facility that will meet the community’s daycare needs now and in the future.
“One startup cost is for employees,” said Conrad. “If we can’t afford to hire good employees, obviously the business will fail.” Conrad said tenured employees will earn above minimum wage, but he also plans to hire high school students in part-time positions. “When I am bringing on all these high schoolers, giving them the opportunity to work right here in the community within walking distance from the high school, minimum wage is better than $10–plus an hour. It affects our bottom line.”
Council member Mike Ryan, who strongly supports the increase, rebuffed arguments that minimum wage jobs are held primarily by high school kids.
“I see a lot of adults with children who work at daycares, I see a lot of young adults– people in their 20s, maybe 30s– who work at nursing homes as aides for barely minimum wage. The high school kid excuse doesn’t go very far with me because we don’t make a delineation,” Ryan said. “We have (households) in this country– in this county, in this community– with two wage earners who work 40 to 50 hours a week who live in poverty, and I can’t abide by it. It’s a moral issue for me.”
Council member Al Havens questioned whether a tiered system of employment allowing younger workers to be paid a different minimum wage would be feasible at the local level, but Ryan said since the federal government’s initiation of a minimum wage, no such distinction had ever been made.
Conrad reasoned a higher wage requirement always impacts both consumers and where businesses choose to locate.
“We are going to have to pass that on to our parents,” Conrad said. “We will adhere to whatever wage you choose, but we are looking at getting other businesses in Prairie West, some drawing a lot of part time jobs, and if they decide not to come to your community because you raised your minimum wage…”
Council member Jim Bartels said he supported the minimum wage increase, especially because housing in Tiffin is so costly.
Councilor Peggy Upton said she understood that problem; when her children were young, she said, her family did not own a house because she paid daycare expenses instead of a mortgage.
“It is hard to be the working poor– (speaking) as one of those– to live here and pay the expenses because the cost of living is high. By the same token, I don’t think government has any business getting involved with private enterprise and telling them what they should and shouldn’t do. It’s more of a market thing. People are going to be forced to cut the number of employees if they are forced to pay those wages.”
Council member Jo Kahler agreed.
“I think we should opt out. I don’t think we should say what businesses should pay. I don’t think that’s our right,” Kahler said.
Ryan rejected the position that government should not meddle in private enterprise.
“We’ve heard the argument nationwide and statewide that there is no justification for raising the minimum wage and (we should) let the market decide: well, the market will kick you in the face if you don’t have resources,” Ryan said. He pointed to the city’s economic development policy that offers tax rebates to new and expanding businesses. “We have people coming in here and saying, ‘I have $100,000, but can you give me $40,000 more so I can start a business, and we’ll all benefit.’ Nobody cares they are going to pay $2 or $3 more in taxes for a tax rebate that gives more resources to (businesses). Yet we are going to actively take a stand and say ‘we’ve got to tamp down those wages and let the market decide?’”
Later, during the council’s formal meeting, Conrad returned to the podium to explain his application for a multi-year tax rebate in the total amount of $110,000 to build his new daycare, the agreement for which was on the council’s agenda for initial approval. Ryan said he found particular irony in the situation.
“Don’t you feel a little funny?” Ryan rebuked Conrad. “You are talking about suppressing the wages of the people who work there, but (saying) ‘I’m going to come up here and ask for $100,000 over four years.”
Conrad contended he did not “feel funny” at all.
“I’m bringing full time jobs and part time jobs into your community, investing in the tax base that will continue on for years that will help the community grow, and providing a service that not only is wanted but needed for this community,” he said. “If you want people to move in this area, if you don’t provide the service, they may move somewhere else.”
While Ryan voted to move forward with Conrad’s agreement and said he strongly supports using Tax Increment Financing (TIF) to assist economic development, he reiterated his point for the broader audience.
“When we talk about minimum wage, we can say government shouldn’t get in the middle of that, but a businessman comes with his hand out and says ‘Help me help you,’ and by God, we justify it,” Ryan said hotly.
Since 2008, Iowa has followed the federal law, setting the minimum wage at $7.25 per hour. But because Iowa is a home rule state, county and municipal governments are able to set different standards as long as they don’t go below the state’s minimum. The Johnson County Board of Supervisors employed the home rule when approving its new ordinance, and now cities must choose whether to follow suit or opt out.
To date, Solon and Swisher are the only communities that voted to reject the county’s ordinance, keeping their local minimum wage at $7.25. North Liberty and Iowa City’s councils decided to let the county’s first increase take effect and evaluate its impact after several months of implementation.
In that scenario, the unanswered question remained: what happens if a municipality abides by the county ordinance as of Nov. 1 but decides to reject it later?
“Does it revert to $7.25?” Upton asked. “Employers would be subject to raising (wages) and then lowering them again, and as an employee, I would not be happy with that.”
The only other conclusion the council reached was to continue the discussion at a future council work session.
Ryan offered a parting promise to his colleagues.
“I won’t be part of an organization that actively chooses to suppress wages for working people,” said Ryan. “Do what you will, but I will not be part of an organization that does something this unconscionable. I will not stand for it.”