Iowa’s continuing jobs crisis

The last time the unemployment rate was this high, Charlie Chaplin was starring in Modern Times, and Jesse Owens was upstaging Adolf Hitler at the Berlin Olympics.

In the week ending June 13, another 9,516 Iowa workers filed for unemployment insurance. This brings the total new claims since the start of the COVID recession to over 350,000, or one-fifth of the labor force.

The seasonally adjusted unemployment rate for Iowa in April (the latest month for which data is available) was 10.2 percent, but that is a serious undercount for two reasons:

First, it misses those who, faced with such a dismal job market or family commitments, have dropped out of the labor force altogether. If you are not actively looking for work, you don’t get counted as unemployed. In April, Iowa’s labor force participation rate (the share of the working age population who are working or looking for work) dropped below 70 percent for the first time since the Great Recession.

Second: misclassification. In calculating the April unemployment rates, the Bureau of Labor Statistics misclassified those furloughed or unable to work because of family commitments as “employed but unable to work.”

If we take these factors into account, the real unemployment rate in Iowa is probably closer to 15 percent. The last time the unemployment rate was this high, Charlie Chaplin was starring in Modern Times, Jesse Owens was upstaging Adolf Hitler at the Berlin Olympics, and the cement in the Hoover Dam was not yet dry.

Colin Gordon is senior research consultant for the Iowa Policy Project (IPP), and a professor of history at the University of Iowa. He has provided job and work-life issue analysis for IPP since the organization started in 2001.