Digging a little deeper on Iowa jobs

Iowa job trends closely track regional and national trends, and show considerable fluctuation month to month.

Colin Gordon
Colin Gordon

Governor Branstad’s claim that Iowa’s economy has created 100,000 jobs in two years is nonsense. We make this case in this morning’s Des Moines Register, pointing out that the Governor’s measure counts (and miscounts at that) only one side of the ledger. The actual jobs record since January 2011 is a net of 18,700 nonfarm jobs.

Here are a couple of graphs to underscore this point. The first traces the trajectory of job creation in Iowa, the West North Central States, the entire Midwest, and the country as a whole. These are plotted with a common starting point: December 2007 (the start of the recession) is set at “100” for each measure, so that each line shows the percentage change in employment over time. The Branstad Administration (since January 2011) is shaded in yellow.

What jumps out here is a simple fact. There is nothing exceptional about the Iowa experience. Our job numbers closely track national and regional trends, although — as with the rest of the West North Central Region — insulation from the housing crash and high commodity prices cushioned us from the full impact of the recession. And the rate at which we are adding jobs (much too slowly) is virtually identical to that of the region and the nation.

Figure 1. Iowa Job Trends Follow Regional and National Trends

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What about the actual job creation record in Iowa? Figure 2 below plots the month-by-month gains (and losses) in nonfarm jobs since December 2007. Again, the period since January 2011 — the focus of the Governor’s claims — is shaded in yellow. Over that 22-month span, we gained jobs in 14 months and lost jobs in the other eight—for a net gain of 18,700 jobs, or about 850 jobs per month. There is nothing exceptional about this. Indeed, in the year preceding the current administration (January 2010 to January 2011) we added about 13,000 nonfarm jobs — over 1,000 per month.

Figure 2. Iowa Jobs Both Gain and Fall Over Last Two Years

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Posted by Colin Gordon, Senior Research Associate

Scrap the political math

The Governor is using political math, not real math.

At the Iowa Policy Project, we are pretty careful about the way we count. The way we use numbers reflects on our credibility as an independent, nonpartisan resource for all Iowans, no matter their political stripe. It is important for our state’s political debates to be fought on a foundation of facts, so that our leaders can better debate the issues on their merits, rather than political spin. That is why we’re here at the Iowa Policy Project.

We also have counted since our earliest days on the work of Colin Gordon, a professor of history at the University of Iowa and IPP’s senior research consultant. Colin is author of our annual State of Working Iowa report — he offered an innovative twist on it this year with interactive graphs that you can try out for yourself at www.stateofworkingiowa.org — and like the rest of us at IPP, he was disturbed to see Iowa job data being distorted in recent days by, of all sources, the Governor’s Office. The Governor in his Condition of the State address Tuesday used an inflated number to tout progress on Iowa jobs. He is choosing to count only jobs gained, not those lost. This is political math, not real math.

Gordon wrote about it today in The Des Moines Register. In the piece, Gordon notes that using the Governor’s approach to math, Iowa could have a $6 billion surplus. “Why not just count the revenues?” he asked. Excerpt:

And, of course, the governor’s political opponents could offer up a number of “gross jobs lost” since January 2011 — a measure (about 56,000 lost jobs) that would be just as impressive, and just as silly. …

In the bigger picture, these job numbers are not even shaped much by state policy, by what governors do or do not do. Jobs are won or lost by national economic conditions. States can try to pirate jobs or investment from other states, but the only sustained impact of state policy is on the quality of state jobs. Higher labor standards and better investments in education are places to make that impact.

Iowa’s leaders can move these discussions forward constructively, but that starts with ending the politicization of basic economic data, as the governor’s staff has done with numbers on job growth.

Posted by Mike Owen

Manufacturing trends by state through the years

Manufacturing jobs have particular significance because they pay better than jobs in other sectors to equivalent groups of workers.

Colin Gordon
Colin Gordon

In September, prompted by President Clinton’s discussion of the overall U.S. “jobs score” under Republican and Democratic presidents since 1961, Stephen Herzenberg of the Keystone Research Center and I analyzed trends since 1949 in manufacturing employment by presidential administration.[1]

Manufacturing jobs have particular significance because they pay better (even today) than jobs in other sectors to equivalent groups of workers, and because they leverage more related employment (up and down the supply chain) and more export growth than any other sector. In addition, manufacturing workers and many manufacturing-intensive regions (e.g., in Pennsylvania, Michigan, Ohio, Wisconsin) have political significance: Their swings back and forth between the two parties often decide the outcome of presidential elections.

Since the release of our national manufacturing jobs score analysis, we learned that the Bureau of Labor Statistics maintains data that make it possible to examine trends in manufacturing employment by state since 1939.[2] We have produced a briefing paper on these issues, beginning with an exploration of manufacturing employment trends since 1948 nationally, in four multistate regions, and in individual states.

In the subsequent section of the paper, we detail the findings for a single state, Pennsylvania, but we also provide charts online for all states, inviting similar analysis of states besides Pennsylvania.) The last part of the paper considers what our numbers mean, drawing on our published work on the national manufacturing jobs trends.

The Keystone Report details our findings — and their implications — for Pennsylvania. But we also provide an interactive map and chart that allow investigation of the numbers for any state or region. The chart below examines Iowa manufacturing job trends from 1948 to present.

graph of manufacturing job trends in IowaPosted by Colin Gordon, Senior Research Consultant

Connecting dots draws tough course for Iowa jobs

Why is job outlook dim? Don’t blame an educational gap or the business cycle. Long-term projections favor low-wage service jobs over better-paying sectors.

The chart projecting Iowa jobs in the near future is not pretty.

click on image for interactive version

Using the most current state level numbers, for 2008-2018), this graph shows that the fastest growing jobs taking larger shares of the Iowa job market through 2018 are in sectors that pay lower than the state median wage. Dots represent occupations; blue dots pay higher than the statewide median wage (2011 numbers) and red dots pay lower. Move your cursor to each dot to see the occupation, its 2008 employment, its median wage and projected employment.

Only 4 of 18 occupations projecting job gains over 1,500 by 2018 pay better than a median wage, and only one of the 10 occupations projecting job gains over 2,000 pay better than the median. Six occupations (retail sales, office clerk, nursing aides, home health aides, food preparation, and customer service) project job growth greater than 4,000 and the highest wage in this group falls more than $2.00 short of the median wage.

Why is this happening? Don’t blame it on an educational gap, in which workers with skills pull away from the rest. As the Center for Economic and Policy Research has shown — here and here and here — today’s low wage workers are older and better educated  than ever.

It also is not an artifact of the business cycle, as the Department of Labor estimates in long-term projections that about a third of new jobs through the next decade will be in low-wage service occupations (retail, home health care, child care, janitorial).

Combine these projections with the troubling trend of the last business cycle, which hit good jobs hard. The National Employment Law Project has shown (here and updated here), that job losses during the recession were concentrated in mid-wage occupations, while job gains during the recovery have been concentrated at the low end.

Our work, it seems, is cut out for us — well-paid or not.

Posted by Colin Gordon, Senior Research Consultant

Note: Colin Gordon is a Professor of History at the University of Iowa and Senior Research Consultant at the Iowa Policy Project. This post is taken from his blog, TelltaleChart.org

Minimum wage affects workers above $7.25, too

Wages of Iowa workers since 1979 shows the importance of the minimum wage in raising floor for all low-wage workers.

Colin Gordon
Colin Gordon

When politicians and others dismiss the minimum wage as an important issue to working families, they miss some important points.

First, many people work at the minimum wage, and they’re not just teen-agers. Recent work by the National Employment Law Project reminds us that most minimum-wage workers are adults toiling for large firms — most of which are counting impressive post-recession profits. An inadequate minimum wage makes it needlessly tough on these families: A little bit more would mean a lot, and their employers can afford it.

Second, the minimum wage serves as a floor for low-wage workers generally. When the minimum wage rises, it affects wages of people who make just a little more. This is because the competition for low-wage workers forces some employers to stay just ahead of that level.

Third, as work by colleagues Center for Economic and Policy Research underscores, the slipping value of the minimum sits in stark contrast to both the simultaneous spike in key family expenses (such as health insurance or higher education, and the rising educational attainment of low-wage workers.

This graph plots the wages of low-wage (10th percentile) workers in Iowa since 1979, and underscores the importance of the minimum wage as a floor for low-wage work. An interactive version of this map is available on The Telltale Chart blog. As it shows, wages at the 10th percentile rise and fall with the minimum (blue lines) — with the sole exception of the economic boom at the end of the 1990s, when tight labor markets brought wage gains without an increase in the statutory minimum.

graph from telltalechartBy raising the minimum wage in Iowa — which has held at $7.25 since January 2008 without any increase for inflation — the state of Iowa could do the right thing by many thousands of Iowa families whose employers will not do so on their own.

Posted by Colin Gordon, Senior Research Consultant

 

Coming this weekend: The State of Working Iowa 2011

State of Working Iowa 2011 coverIt’s almost Labor Day, and that means it’s time for another edition of The State of Working Iowa.

Be watching this weekend in Iowa media and on the Iowa Policy Project website for The State of Working Iowa 2011. Authored this year by Noga O’Connor, Colin Gordon and Peter Fisher, the report takes a look at how Iowa is doing in recovery from the 2007 recession, the challenges ahead and potential policy options to deal with them.

Find previous reports in the series here.