Iowa Dems release plan for paid family leave, $15 minimum wage

Iowa House Democrats economic plan hits on a host of issues they say will help working families survive Iowa’s worst in the nation economy. 

Iowa House Democrats unveiled a sweeping agenda Wednesday that would dramatically reshape the state’s approach to worker pay, healthcare affordability, and family support. House Minority Brian Meyer positioned it as an alternative to Gov. Kim Reynolds’ agenda. 

“We [Democrats] are addressing the affordability crisis squeezing working families across Iowa. Too many of our neighbors are working hard, playing by the rules, but still falling behind,” Meyer said in a press release. “House Democrats are focused on raising wages, protecting benefits, and helping Iowans retire with dignity.”

The proposal, branded as the “Working Families and Affordability Plan,” includes raising Iowa’s minimum wage to $15 per hour, establishing mandatory paid family leave, freezing utility rates through 2030, and eliminating the state’s Education Savings Account program to fund health insurance subsidies.

Fight for $15

At the heart of the proposal is a phased increase in Iowa’s minimum wage, which has remained frozen at the federal $7.25 per hour since 2009. Under the Democratic plan, the minimum wage would increase to $10 in 2026, $12.50 in 2027, and $15 by July 1, 2028. After that, the wage would automatically adjust annually based on inflation..

Iowa now stands in stark contrast to its neighbors. Four surrounding states increased their minimum wages at the start of 2026. Nebraska and Missouri both have a $15 minimum wage. Minnesota has increased to $11.41. And South Dakota rose to $11.85. Illinois has held at $15 since 2025. Only Wisconsin matches Iowa’s $7.25 rate.

“It’s particularly important that we in eastern Iowa understand that the Iowa minimum wage is less than half than the Illinois minimum wage for businesses to secure the workers they need,” Iowa Rep. Ken Croken (D-Davenport) told WVIK in December.

Mandatory family, medical leave

The Democratic package would establish 12 weeks of paid family leave and 12 weeks of paid medical for both full- and part-time workers. These are paid days a worker could take to bond with a new child, care for a family member with a serious health condition, or support a family member with a military deployment

Employers would cover the cost. Currently, 13 states have mandatory paid family leave systems; Iowa is not one of them. 

Rep. Larry McBurney (D-Urbandale) pointed out that Reynolds approved four weeks of paid parental leave for state employees. “Now it’s time to go a step further and ensure that every Iowan has the opportunity to take time from work and spend time building their family,” [McBurney said according to Radio Iowa.

In Iowa, eligible workers are only able to access up to 12 weeks of unpaid leave under the federal Family and Medical Leave Act. 

ESA-to-ACA switcharoo

House Democrats are also taking a swing at Reynolds’ controversial private school voucher system. The idea: redirect that funding to replace expired federal health insurance subsidies.

Iowans who bought health insurance through the Affordable Care Act (ACA) Marketplace benefited from expanded subsidies due to laws passed during the Biden administration. Congressional Republicans consistently opposed extending these subsidies and allowed them to expire on Jan. 1. 

House Democrats’ plan would take the $350 million currently being spent on private school tuition and use it to help make health insurance more affordable.

Without the enhanced subsidies, premium payments are estimated to more than double for millions of subsidized enrollees, a 114% increase on average, according to a KFF analysis. Premiums are estimated to rise from $888 annually to $1,904 in 2026.

The package also includes the following:

• Homebuyer assistance – Increasing Iowa’s first-time homebuyer closing-cost grant from $2,500 to $10,000 under the FirstHome Program. This is a priority that was echoed by Reynolds during her Condition of the State address.
• Utility rate freeze – Freezing residential electric and natural gas rates through December 31, 2030
• Retirement savings – Creating a state-run portable retirement savings option for workers whose employers don’t offer retirement plans
  

Iowa Republicans control both chambers of the Iowa Legislature, as well as the governor’s office. That means that these proposals would need buy-in from them to advance.