Iowa jobs: Where we are

Over a decade later, post-recession Iowa is way behind where it should be in jobs, wages and economic security.

Over a decade since the housing bubble burst in late 2007, and almost nine years since the start of the recovery, we are far from where we should be in job growth, wages, and economic security.

Iowa climbed back to pre-recession levels of nonfarm employment in July 2013. But, as the recovery staggers along, that threshold becomes increasingly meaningless. Since 2007, the state has continued to add to its labor force through immigration, domestic in-migration, and high school or college graduation.

Just to keep pace with growth in the working-age population (about 7 percent since 2007), while sustaining pre-recession rates of employment and labor force participation, we should have added (as of last month) 106,100 net jobs over that span. Instead, we gained back only 67,800 jobs — leaving a jobs deficit of 38,300.  For the latest numbers, see our monthly “JobWatch” report.

In turn, we face another persistent deficit: a shortage of good jobs. In our State of Working Iowa discussion of wages, we underscored remarkably weak wage growth in Iowa despite historically low rates of unemployment.

This partly reflects the lack of worker bargaining power: Without access to collective bargaining and robust, well-enforced labor standards, there is little prospect of winning wage real and lasting gains. And in part, this reflects the changing contours of Iowa’s labor market. Over the last generation, and across the last business cycle, we are steadily trading good jobs for bad.

Two factors are driving the loss of good jobs: the composition of jobs (which sectors are growing or declining), and the quality of jobs (declining wages and standards within sectors or occupations).

During the recession, employment losses were heaviest in middle- and high-wage sectors of the economy — especially manufacturing, which shed nearly 30,000 jobs between December 2007 and June 2009. Early in the recovery, these losses continued and — in Iowa and across the nation — job gains were concentrated in low-wage occupations.

181227-SWI-Figure1a

The pattern of gains and losses across sectors in Iowa is summarized in the figure above. As of late 2018, large recessionary losses in manufacturing and information have still not been recovered (indeed, the information sector continued to shed jobs during the recovery).

The largest net gains are in the low-wage leisure and hospitality sector, construction, professional and business services, and education and health services.

In the latter, the job gains are all on the health care side of the ledger. This largely reflects hiring in health care in response to a surge in demand sparked by increased coverage under the Affordable Care Act — something to consider about the consequences of public policy choices on health care.

 

2015-CG-5464Colin Gordon is Senior Research Consultant for the Iowa Policy Project.

cgordonipp@gmail.com

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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