May 18, 2021 - News

Des Moines sees upward pressure on public and private wages

Illustration of an animated 10-dollar bill, with the number changing to 11, 12 and 13.

Illustration: Brendan Lynch/Axios

Wages are rising in Des Moines as employers try to lure potential workers — and it's especially true for low-training jobs.

The state of play: Locally, wages for restaurant hosts have risen to $11-12 an hour and cooks can earn between $18-20 an hour, Jessica Dunker, president of the Iowa Restaurant Association said on Iowa Press.

In the public sphere, Polk County supervisors agreed last week to increase election worker and seasonal employee pay to at least $15 an hour in a series of steps over the next two years.

  • That move affects around 1,000 people who work election nights. Many of them currently make $10 an hour. About 50 summer or seasonal employees will also see increases.
  • The extra costs to Polk County are anticipated to be $80,611 for the fiscal year that begins July 1.
  • And Supervisor Matt McCoy has proposed that the county sever its ties with private contractors who fail to pay $15 an hour, though it didn't act on that because it might affect work with nonprofits that assist with food and shelter distributions.

What's happening: Economists are still stumped by why some people don't want to re-enter the labor market, but higher wages don't address larger pandemic-linked issues, like child care shortages.

  • Our Axios Local colleagues in Charlotte, Tampa Bay and the Twin Cities all have reported on similar trends.
  • Even McDonald's, the longtime brunt of wage jokes, announced it would raise starting wages from $11 to $17 at its company-owned restaurants, though they represent only 5% of its locations.
  • But John Deere, a popular local employer that offers competitive wages, could only fill 50 of its 300 recent job openings, according to Peter Orazem, an economics professor at Iowa State.

But it comes at a cost to consumers, who may bear the burden of those new deferred costs, said Orazem.

  • And they could face the double whammy of enduring higher prices for goods if inflation keeps creeping up, he added.
  • But that temporary inflation may be the nudge that moves our worker shortage into equilibrium.

The bottom line: At least for now, "expect to pay more at McDonald's," Orazem said.


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