The State of Working Iowa 2011

FOR IMMEDIATE RELEASE SEPTEMBER 2, 2011
CONTACT: Mike Owen (319) 338-0773, ipp(at)Lcom.net

View or download report 25-pg PDF


IOWA CITY, Iowa — Policy makers should buttress the Iowa economy with strong wage and work supports to hasten recovery and lay a foundation for future prosperity, Iowa researchers say.

In the annual Labor Day weekend report from the nonpartisan Iowa Policy Project (IPP), researchers examine key Iowa trends in wages, job growth and job quality, with particular attention to the pace of recovery from the 2007 recession.

“Iowa was spared the worst ravages of the recession, but its impact was nevertheless significant — and the recovery has been painfully slow,” said Colin Gordon, senior research consultant for IPP.

IPP Research Associate Noga O'Connor noted the growing attention not just to unemployment, but to underemployment.

"It is important to recognize that in our slow recovery, people have left the labor force because they are discouraged, and some who are working want — and are qualified for — better jobs,” O'Connor said. “That is the phenomenon of underemployment.”

Key findings from the report:
• Iowa’s unemployment rate peaked at 6.2 percent in late 2010 (nearly 4 percentage points below the national peak).
• Underemployment in Iowa rose to 11.6 percent.
• Long-term unemployment (the share of the unemployed out of work for six months or longer) nearly tripled to over 33 percent.
• Iowa faces a “jobs deficit” of 72,600 — the number of jobs needed to return Iowa employment to early 2008 levels, taking the increase in population into account.
• Wages slowed to a crawl and in fact were lower at low-, median- and high-wage levels in 2010 than they were a decade before when adjusted for inflation.

“So, we have 1 in 3 unemployed who have been out of work for six months or more, and those people are feeling the impact of the 'jobs deficit,” O'Connor said. “To erase this deficit and keep up with Iowa’s population growth, we will need to add 3,000 new jobs a month for the next three years. By any measure, this will be the longest ‘recovery’ in Iowa’s modern history.”

Another measure often noted by State of Working Iowa reports is in job quality: trends in jobs offering better pay and benefits.

“The news there is not good,” Gordon said. “Recessionary losses were concentrated in job sectors that on average pay higher wages and more likely to offer job-based health insurance. Where there have been gains in recovery, they have come, by and large, in sectors averaging lower wages.”

The report noted that average annual pay (2010 figures) for jobs lost during the recession was $38,850; the average annual pay for jobs added during the recovery is almost $6,000 less — only $32,990.

To boost job and wage growth, the authors recommend:
• Raising and indexing the minimum wage, so that gains achieved with an increase are held constant with inflation.
• Strong work support policies, such as an expanded Earned Income Tax Credit for moderate-income working families, as well as child care assistance, public health insurance and the voluntary preschool program.
• Assuring equity in a tax system that maintains commitments to public services, and recognizes that new tax breaks for business are unlikely to prompt new investment.

The Iowa Policy Project is a nonpartisan public policy research organization in Iowa City. Reports are available at www.IowaPolicyProject.org, and short notes on current analysis are available on IPP's Iowa Policy Points blog, at www.IowaPolicyPoints.org.

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