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State of Working Iowa 2011

In Uncategorized on December 17, 2012 at 12:55 pm
By Noga O’Connor, Colin Gordon and Peter S. Fisher
Full report (25-page PDF) 9/2/11
Executive summary (also below) (1-page PDF)
News release

Each fall, we mark Labor Day with a report on the recent experience of working Iowans and their families. The State of Working Iowa 2011 examines key trends in wages, job growth, and job quality — with particular attention to the impact of the 2007 recession, and the pace of recovery. While Iowa (as other states with limited exposure to the housing bubble) was spared the worst ravages of the recession, its impact was nevertheless significant —— and the recovery has been painfully slow.

Our key findings:

• Iowa’s unemployment rate peaked at 6.2 percent in late 2010 (nearly 4 percentage points below the national peak), but this understates the impact of the recession both for Iowa and the nation: The rate of underemployment in Iowa (taking into account those who have stopped looking and those who are working less than they would like) rose to 11.6 percent and the rate of long-term unemployment (the share of the unemployed out of work for six months or longer) nearly tripled to over 33 percent.

• Even 17 months into the Iowa recovery the state faces a substantial jobs deficit: We need 72,600 jobs to get back to the employment levels of early 2008. 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.

• The damage is compounded by the fact that we have not lost (or gained) jobs evenly across the economy. Recessionary losses were concentrated in sectors offering good jobs — those paying higher wages and offering job-based health insurance at higher rates. And recovery gains have, by and large, come in lower-wage sectors. The 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 more than $5,000 less — only $32,990.

Iowa’s Jobs Deficit — Lost Jobs, More Population
Jobless Rate MapsTo understand the challenge in returning Iowa jobs to where they stood before they started declining in 2008, analysts point out not only lost jobs, but jobs needed to keep up with population growth, must be considered. The deficit: over 72,000 jobs.

• Wage growth slowed to a crawl during the recession; indeed Iowa wages for low-wage, median and high-wage workers were all lower in real dollars (adjusted for inflation) in 2010 than they were a decade earlier — a record matched by only two other states.

• This wage stagnation has fallen unevenly across Iowa’s population. Especially hard hit have been the earnings and employment prospects of men.

• The recession, in turn, struck hard: The greatest increases in unemployment and underemployment were felt by men, the middle (25-54) age cohort, and those with a high school education but less than a four-year college degree.

Our policy recommendations are straightforward and pragmatic. As wages and job quality slip, it is more important than ever that we buttress the “floor” of the economy with strong wage and work supports (an indexed minimum wage is one recommendation). And, as competition for new investment grows keener, it is more important than ever that we sustain the long-term investments (education, infrastructure) that are proven to attract and retain private employment.

About the authors

Noga O’Connor, Ph.D. (Sociology of Education), has served as visiting faculty at the University of Iowa. O’Connor joined the Iowa Policy Project in July 2010 as a Research Associate, with a focus on issues of post-secondary training and the labor market, looking especially at the performance and well-being of Iowa workers. Her academic publications center on minorities in higher education.

Colin Gordon, Ph.D. (History), Professor, Department of History, University of Iowa, is a Senior Research Consultant for the Iowa Policy Project. He has authored or co-authored several IPP reports, including most in the State of Working Iowa series, to advance effective and accountable policies that help working families. He is the author of New Deals: Business, Labor, and Politics in America, 1920-1935; Dead on Arrival: The Politics of Health Care in Twentieth-Century America; and Mapping Decline: St. Louis and the Fate of the American City.

Peter S. Fisher, Ph.D. (Economics), Professor Emeritus of Urban and Regional Planning at the University of Iowa, and is research director of the Iowa Policy Project. He is a national expert on public finance and has served as a consultant to the Iowa Department of Economic Development, the State of Ohio, and the Iowa Business Council. His reports are regularly published in State Tax Notes and refereed journals. His book Grading Places: What Do the Business Climate Rankings Really Tell Us? was published by the Economic Policy Institute in 2005.