Johnson County businesses offer much more than minimum wage: 'No one is going to work for $7.25'

Grayson Lottes works a minimum-wage job at Iowa Chop House in downtown Iowa City, as a food runner and occasionally as a server, making anywhere from $5.25 to $7.25 an hour, plus tips.

On a good night after workers are tipped out, he said he makes up to $25 an hour on tips alone, although on average it's between $11 and $12 a night. He said Iowa Chop House makes sure all of its workers reap the rewards of busy nights, so that everybody gets paid more and the business can attract more workers.

"They don't have to do that, but let's be honest, no one is going to work for $7.25 nowadays," Lottes said.

This certainly seems to be true in Johnson County, where businesses are offering much more than the state-mandated minimum wage in order to try to find workers in an economy where jobs are plentiful. Signs at local Burger King and Popeyes restaurants are advertising starting positions for $13-$15 an hour, while postings on Indeed include a crew member at Trader Joe's starting at $14-$16 an hour and one for a concessions associate at Marcus Theatre's Coral Ridge Cinema at $11 an hour plus free movies.

It's not hard to find a job in the service industry in today's economy. Online job boards show few open positions in Johnson County advertised at below $10 an hour.

Iowa Chop House's policy, Lottes said, is meant to attract more workers by offering higher pay than is required by the state of Iowa.

"Ninety percent of the time you'll get way over the minimum wage," he said.

The Press-Citizen reported in April that local employers in the food industry are cutting back business hours while also increasing starting wages in an effort to lure new workers.

More: Iowa City restaurants struggle to fill job openings as student workforce shifts its priorities

The U.S. Bureau of Labor Statistics reported last May that the mean wage for the lowest-paying jobs in Johnson County were already above $11 an hour, far exceeding the state's minimum hourly wage at $7.25 and just below Johnson County's recommended minimum hourly wage of $11.56.

The jobs with the lowest mean wage were child care workers at $11.16 an hour, with dishwashers at $11.17 and recreational protective service workers — such as lifeguards — at $11.32 an hour.

These mean reported wages were before inflation in the U.S. skyrocketed and the labor force was still relatively early in recovery from the impacts of the COVID-19 pandemic on the economy. Once BLS takes stock of more recent wages, these numbers could go up.

Lottes said he does feel like he is being paid fairly, since he is 19 and a second-year student at the University of Iowa.

While Johnson County's wage is unenforceable, businesses are getting in line

Johnson County Supervisor Rod Sullivan told the Press-Citizen he thinks wages are on the rise in the county for a variety of factors, including market forces, the county's minimum wage and because workers have taken more control and are demanding more from their employers.

Sullivan said he has noticed employers around Johnson County offering higher pay for what have been traditionally low-paying jobs. He said he hopes this is a sign that the economy is rebalancing and profits are being less concentrated at the upper echelons of society.

"We've got all these billionaires and we've got people who are close to being trillionaires. It's obscene," he said. "And on the other end of the spectrum, you've got people making $10 an hour. That just shouldn't be in a civilized country."

USA Today reported that the labor shortage has helped spark a ripple effect, enabling younger people entering the workforce to earn higher wages, more experienced employees to pursue new positions and potentially higher pay, and blue-collar workers to demand union representation and better work conditions.

But as wages are rising, inflation is driving up the cost of living across the United States and in Iowa.

More: Will cost-of-living raises push inflation even higher? Maybe, but the effect is small.

Iowa took away the power of local municipalities to set a higher minimum wage in 2017 soon after Johnson County set its wage at $10.10 an hour, almost $3 higher than the state's wage, which mirrors the federal minimum wage. Despite inflation and changes to the economy, neither the state nor the federal government have raised the minimum wage since 2009.

Sullivan said, while he was disappointed the state outlawed the county's ability to set a higher minimum wage than the state, he thinks most businesses that raised their wages to meet the county's level kept them there.

"We were dismayed when the governor and the Legislature took money out of people's pockets and disallowed what we had done," he said.

Sullivan said he thinks most businesses have continued to give raises to employees, and the law, despite being unenforceable, has had a positive impact.

Sullivan and the other four Johnson County Supervisors just voted to increase the recommended minimum wage again this year to $11.56 starting July 1. The board uses Consumer Price Index data to set the increases, which is based on inflation.

Sullivan he said he thinks the original 2015 ordinance opened the eyes of many people and employers in Johnson County. He doubts Iowa will change its minimum wage, but has hope that the federal government will soon.

"It's a pendulum. It had been so far flung against low-wage workers for so long that somebody need to do something to start moving it in the other direction. And I think that that has happened and continues to happen, and I think that is good," he said.

George Shillcock is the Press-Citizen's local government and development reporter covering Iowa City and Johnson County. He can be reached at (515) 350-6307, GShillcock@press-citizen.com and on Twitter @ShillcockGeorge

This article originally appeared on Iowa City Press-Citizen: Johnson County's entry-level workers find much more than minimum wage