Iowa JobWatch: Jobs Rise in August, Still Sluggish

Posted September 19, 2014 by iowapolicypoints
Categories: Economic Opportunity

Tags: , , , , ,

IOWA CITY, Iowa — Iowa nonfarm jobs increased in August to 1,553,500, but the unemployment rate remained at 4.5 percent, down from 4.7 percent a year ago. The Iowa Policy Project today released the following statement by research associate Heather Gibney about the latest numbers:

“The month of August saw a very small increase in total nonfarm jobs, which is right in line with the fact that Iowa’s major job sectors lost about the same amount of jobs that were gained. Professional and business services and leisure and hospitality saw the largest gains while construction experienced the biggest loss.”

“It’s also important to look at long-term trends rather than one-month changes. Iowa is now above pre-recession job levels — but those jobs serve a 4.9 percent larger population, according to the Economic Policy Institute (EPI). The net job gain since the December 2007 start of the recession is only 28,600 — but 75,400 jobs were needed by now to keep up with population growth. Therefore, the state shows a job deficit of 46,800 jobs.”

Job Growth Perspective

Governor Branstad set a goal of 200,000 new jobs over five years. Iowa’s economy has produced 77,300 net new jobs through the first 43 months of his term. To add the remaining 122,700 jobs, Iowa would need to add 7,200 new jobs per month over the next 18 months, compared to a pace of 1,800 for the first 43 months.

Key Numbers

  • Nonfarm jobs held steady in August at 1,553,500. Nonfarm jobs are 18,000 ahead of where they stood a year earlier.
  • Nonfarm jobs are 25,500 ahead of the May 2008 peak of 1,528,000, and 28,600 ahead of the level at the start of the last recession in December 2007.
  • The unemployment rate remained at 4.5 percent in August but was down from 4.7 percent a year earlier.
  • The labor force — those working or looking for work — rose by 2,400 from July to 1,703,000 and was up 29,800 over 12 months.
  • Initial unemployment claims were 11,445 in August, down 11.2 percent from July and 4.6 percent from a year earlier. The number of continuing claims — 23,053 — was down 6.6 percent for the month and down 7.5 percent for the year.
  • Five sectors posted gains in August led by professional and businesses services and leisure and hospitality (1,200), trade and transportation (500), financial activities (300) and mining (100).
  • These increases were offset by losses of 1,100 in construction, a loss of 600 in education and health and government jobs, a loss of 500 in manufacturing, 200 in other services, and 100 for information jobs.

Key Trends

  • All job sectors except information and manufacturing have shown net gains over the last 12 months. Construction jobs are up 3.2 percent over the year, with changes in other major categories up by less than 2.4 percent over 12 months.
  • 300 jobs were added during the month of August.
  • Iowa averaged a monthly increase of about 1,500 jobs over the last 12 months.
  • For a full year, Iowa has remained above the previous job peak of 1,528,000, reached in May 2008, just before jobs began to plummet during the last recession.

 

Stop politicizing water quality

Posted August 26, 2014 by iowapolicypoints
Categories: Budget and Tax, Energy & Environment, Organization

Tags: , , , , ,

Water quality in Iowa is so bad that any new initiative to improve our waters is probably a good thing. That said, Iowa farm groups’ new initiative to take action on agricultural pollution of our waters comes with a troubling rollout.

Making the announcement with Governor Branstad not only politicizes water quality, something that should be above politics, but masks the governor’s own decision this year to delay action.

The Governor’s veto of $11 million for water quality — funding passed by a divided legislature — makes an important statement about water quality. In addition, the governor also vetoed $9 million in funding for the REAP program, which is used by counties and cities to acquire and protect natural areas and to preserve Iowa’s environment.

Twenty percent of REAP goes to farmers to improve soil and water practices. If you are promoting a voluntary system to reduce nutrient runoff, shouldn’t you make sure farmers have resources to put sensible measures into practice?

The new group established to improve water quality needs to be taken seriously by the environmental community and by all Iowans. But this rollout does not engender trust.

The Iowa Policy Project recently released a report on water quality in Iowa. [See A Threat Unmet: Why Iowa’s Nutrient Reduction Strategy Falls Short Against Water Pollution] We showed that the addition of six new policies to the state’s new Nutrient Reduction Strategy would make it possible for the strategy to succeed.

One of those policies is the kind of effort the new farm group plans to push — bringing attention to the problem. A second policy is more funding, and farm group muscle could improve the chances in the Legislature. However, even if the Legislature acts, as in the 2014 session, legislation still has to get by a governor’s veto.

Maybe the best starting place to build broad support would be to invite an environmental group to the table, rather than a politician in the middle of a heated campaign. We know plenty who could help.

IPP-osterberg-75 Posted by David Osterberg, co-founder of the Iowa Policy Project

Beware the “business climateers”

Posted August 18, 2014 by iowapolicypoints
Categories: Budget and Tax, Economic Opportunity, Organization

Tags: , , , , , , ,

Fisher-GradingPlacesIowa’s business lobby appears to be preparing a new assault on the ability of our state to provide public services.

It would be the latest in a long campaign, in which lobbyists target one tax at a time under a general — and inaccurate — message about taxes that we will not repeat here.

Suffice to say, Iowa taxes on business are low already. Many breaks provided to businesses are rarely reviewed in any meaningful way to make sure that taxpayers are getting value for those dollars spent, ostensibly, to encourage economic growth. Rarely can success be demonstrated.

The Iowa Taxpayers Association is holding a “policy summit” this week and promoting a new report by the Tax Foundation to recycle old arguments that are no better now than they have been for the last decade.

Fortunately in Iowa, we know where to turn to understand claims from the Tax Foundation, and that resource is Peter Fisher, our research director at the Iowa Policy Project. Fisher has written two books on the so-called “business climate” rankings by the Tax Foundation and others, and is a widely acknowledged authority on the faults in various measures of supposed “business climates” in the states.

Fisher, in this guest opinion in the Cedar Rapids Gazette, noted weaknesses in the Tax Foundation’s claims, not the least of which is that the anti-tax messages are not supported by the foundation’s own report. Fisher notes this about the Tax Foundation’s “State Business Tax Climate Index”:

It is a mish-mash of 118 tax features … weighted arbitrarily and combined into a single number for the index.

This number has no real meaning. It produces wacky results because it gives great weight to some minor tax features (such as the number of tax brackets) while leaving out completely two things that have a huge impact on corporate income taxes in Iowa: single sales factor, and federal deductibility.

This past spring, this Iowa Fiscal Partnership two-pager noted:

A variety of factors influence the decisions businesses make about whether they want to locate or expand within a given state. These factors include available infrastructure, the proximity to materials and customers, the skill of its workforce, and whether the state has good schools, roads, hospitals, and public safety. As we have shown elsewhere, state taxes play at best a minor role.

In Iowa, we constantly hear the same old argument … used to enact large tax cuts for commercial and industrial property this past year and continues to be an excuse used to justify giving away large tax credits to businesses throughout the state.

But this argument just isn’t true…

Whether we are looking at the entire range of taxes that fall on businesses or just the corporate income tax, the fact is that business taxes in Iowa are low.

Only if Iowa policy makers and the public ignore the reality on Iowa business taxes will these special interests get their way again.

Owen-2013-57 Posted by Mike Owen, Executive Director of the Iowa Policy Project

*View Peter Fisher’s reports for Good Jobs First on business climate rankings:

 

What I learned on the Great March for Climate Action

Posted August 13, 2014 by iowapolicypoints
Categories: Energy & Environment, Organization

Tags: , , , ,
photo of Ed Fallon, turbine

Climate March organizer Ed Fallon in wind country.

After a hard day of marching along gravel roads in Iowa, I set up my tent in the city park in Cumberland and walked a few more blocks to see what the small town had to offer.

I met a guy in the town bar with a Siemens logo stitched on his shirt and cap. That company makes wind turbine blades in Fort Madison, Iowa, and also does maintenance on some of the wind farms in the state.

Not only did I find out the size of the turbines in the nearby 193-turbine wind farm (2.3 Megawatts each) and how high they stood from the ground (260 feet up), but also the salary of guys who have to climb nearly 30 stories up inside the steel tubular towers to do maintenance. A technician salary starts at $24.50 per hour, which is very good money in rural Iowa. Crew members work hard and they get pretty well compensated.

Wind energy is helping to mitigate climate disruption. Close to 30 percent of all electricity generated in the state comes from wind power plants like the ones we passed by. The industry also supports a number of families in rural Iowa.

[To learn more about the Great March for Climate Action, click here]

IPP-osterberg-75Posted by David Osterberg, founder of the Iowa Policy Project

 

[See Des Moines Register story, August 8]

osterberg-walk-01

On the Climate March, other lessons

Posted August 7, 2014 by iowapolicypoints
Categories: Energy & Environment, Organization

Tags: , , ,

140807-DO-walk-222640IPP co-founder David Osterberg this week is on the Great March for Climate Action.

On the March, which is currently proceeding through western Iowa, Osterberg is seeing good examples of another issue he’s passionate about: care for the land, and controlling water pollution. Or not, as in the photos in this post.

140807-walk-195651

Whether it’s a dirty stream, as at left, or crops planted where a stream should be, above, the picture is one of what happens when our public policy expectations are low. We can see examples around us, if we just look.

For more about issues of water pollution caused by ag runoff, and better approaches to reduce it, see several reports on our Iowa Policy Project website.

In particular, see our recent report on Iowa’s Nutrient Reduction Strategy, which relies heavily on voluntary measures instead of enforcement of public standards.

 

Bargain, schmargain

Posted July 30, 2014 by iowapolicypoints
Categories: Budget and Tax, Organization

Tags: ,

It’s back again: Iowa’s SALES TAX HOLIDAY.

What a charade. Retailers love it, because it’s a gimmick to lure people into their stores to buy things at full price, instead of waiting for a back-to-school sale.

The happy-talk label disguises its real impact: to throw away revenue while pretending to, as one report put it, “help boost the economy and give consumers a break.” It does neither.

Iowa’s policymakers are selling you a pig in a poke. You’re told you’re saving money, but you’re buying dirty water, underfunded schools and fees for amenities such as parks. The cost is estimated at over $4 million.

For two days, Iowans will spend money on the same things they would have spent money on anyway, in those two days or others, so it doesn’t boost the economy. Sales taxes do hit low-income folks hardest, but those families would be better served by a break that went all year. They still have only so much to spend in these upcoming two days.

Let’s also recognize that consumers won’t save all that much, if at all — and may in fact pay more. How many times have you rushed off to a “6 Percent Off” or “7 Percent Off” sale? Who’s to say a retailer, with this officially sanctioned “holiday” marketing, won’t bump prices by 10 percent or call off a 20 Percent Off sale that might have been in place?

But it is a deal for politicians who like to brag about cutting taxes, while pointing fingers at others when they cut teachers and police officers because budgets are tight.

If we were honest with ourselves, we would welcome Tax Day and loathe the first weekend of August.

2010-PF-sqPosted by Peter Fisher, IPP Research Director

 

 

Comforting the comfortable

Posted July 25, 2014 by iowapolicypoints
Categories: Budget and Tax, Economic Opportunity

Tags: , , , ,

Comfort the comfortable and penalize the poor. Like the idea? If so, you’ll really like legislation scheduled for consideration today in the U.S. House of Representatives.

The House is scheduled to take up legislation that would gut improvements for low-income Americans in the Child Tax Credit (CTC), improvements passed originally in 2009, renewed in 2010 and 2012, the latter as part of the “fiscal cliff” package, where it was used as a bargaining chip to pass very expensive exemptions in the estate tax — a benefit only to America’s super-rich.

To put this in context, the House leadership bringing this new legislation to a vote will not even consider an increase in the minimum wage, now stagnant over five years nationally (6 1/2 in Iowa). The CTC, it must be noted, is one of the nation’s most effective anti-poverty tools, offsetting part of the cost of raising a child. So, as families earning at or below the minimum wage continue to lose ground, the CTC proposal will set them back even further. As noted by the Center on Budget and Policy Priorities (CBPP):

But a single mother with two children who works full time throughout the year at the minimum wage of $7.25 an hour (which House leaders oppose raising) and earns just $14,500 would lose $1,725. Her CTC would disappear altogether.

A loss at lower incomes — yet a boost at higher incomes. According to Citizens for Tax Justice, the Iowa impact of the new legislation would be:

  • a $285 loss on average to families with incomes below $40,000, and
  • a $696 benefit (tax cut) to families with income above $100,000.

Here’s how it works, according to a summary by CTJ:

The House Republican bill, H.R. 4935, would expand the CTC in three ways that do not help the working poor. First, it would index the $1,000 per-child credit amount for inflation, which would not help those who earn too little to receive the full credit. Second, it would increase the income level at which the CTC starts to phase out from $110,000 to $150,000 for married couples. Third, that $150,000 level for married couples and the existing $75,000 income level for single parents would both be indexed for inflation thereafter.

Adding insult to injury for low-income folks is that the improvements targeted for repeal came in the aforementioned “fiscal cliff” package, which made permanent big estate tax breaks for the rich, while extending improvements in the Child Tax Credit and Earned Income Tax Credit for only five years. CBPP’s Robert Greenstein at the time called that a “bitter pill.”

That was before these new proposals not only to cut back the CTC for lower-income families — but to expand access at higher incomes — and to adjust the high end for inflation, something lawmakers have refused to do for the minimum wage.

A bitter pill? At least. For some, all of this might seem to be an overdose.

Owen-2013-57Posted by Mike Owen, Executive Director, Iowa Policy Project


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