Iowa House Democrats propose worker relief package amid Iowa economic headwinds

Iowa House Democrats unveiled a series of legislative proposals aimed at supporting working families as the state faces economic headwinds, including recent layoffs of 780 workers in Decorah and Amana.

Iowa has seen major layoffs this week that have put at least 780 people out of work. As these workers look for what’s next, the Iowa Legislature is well positioned to support these families. 

Iowa Democrats, still firmly in the minority, say they hope Republicans will consider some ideas to help workers. 

“There are things that we can do to blunt the effects of this,” House Democratic Whip Brian Meyer said at a Wednesday press conference. “Obviously, we can’t control the national economic outcome, but we can blunt the effects of layoffs. We can blunt the effects of all of the people that are affected by this by passing some of these bills.”

These efforts come at a crucial time for Iowa, as a new report found the state’s economy actually contracted 0.5% in 2024, one of only two states to do so.  

Here are some proposals Iowa Democrats laid out this week:

Restoring Unemployment Insurance – House File 455 would restore unemployment coverage from the current 16 weeks to 26 weeks. Rep. Dan Gosa explained that many trades depend on unemployment coverage when weather prevents them from being on the job site. Iowa Republicans reduced these benefits by 10 weeks in 2022.

Workers’ Compensation Reform – House File 673 would include overtime and premium pay when calculating workers’ compensation benefits. 

“Workers rely on overtime in their household budgeting. Workers’ compensation benefits need to do the same,” Rep. Jeff Cooling of Cedar Rapids said.

Minimum Wage Increase – House File 283 would gradually raise Iowa’s minimum wage to $15 per hour by 2027 with annual cost-of-living adjustments thereafter. In 2017, Iowa Republicans took away local governments’ abilities to set their own minimum wage within their jurisdictions. 

“If the minimum wage had been allowed to grow with inflation from $7.25, it would be $11.50 right now. And what we’re proposing is to continuing to raise the minimum wage to $15 an hour,” said Rep. Aime Wichtendahl of Hiawatha. 

Expanded Childcare Access – House File 661 would make child care more affordable by expanding tax credits for families and small businesses while also helping childcare workers earn better wages and benefits. The bill would raise income eligibility limits so more families qualify for assistance and ensure child care workers can access these benefits themselves. 

Restoring Collective Bargaining –  Democrats called for restoring collective bargaining rights for public employees, particularly regarding compensation and workplace safety. Iowa Republicans stripped these rights were from public sector union employees in 2017.

Tax-free tips and overtime – This week at a separate press conference, Iowa House Democrats also pushed to exempt tips and overtime pay from Iowa’s income tax.