EDITOR’S NOTE: This historical background here provides useful context, but for the most up-to-date Iowa jobs numbers, see the Iowa Policy Project’s monthly Iowa JobWatch report.

The State of Working Iowa is shaped by long-term trends in productivity, job creation, wages and incomes, as well as the more immediate state of the economy — or where we are in the cycle of bust and boom, recession and recovery. It is now over a decade since the housing bubble burst in late 2007, and almost nine years since the start of the recovery (the national economy bottomed out in June 2009), and we are far from where we should be in terms of 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. In order 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 October 2018) 105,400 jobs over that span. We have, instead, gained back only 70,100 jobs — leaving a jobs deficit of 35,300. For the latest numbers, see our monthly JobWatch report.

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

There are two factors 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). We see some evidence in Iowa that the changing composition of jobs is undermining economic opportunity and outcomes. 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.

Figure 1. Largest Net Gains in Iowa Jobs are in Lower-Wage Sectors

The pattern of gains and losses across sectors in Iowa is summarized in Figure 1. Large recessionary losses in manufacturing and information have — as of late 2018 — 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, and largely reflect hiring in health care in response to surge in demand parked by increased coverage under the Affordable Care Act.

These sectoral shifts are echoed in the long-term projections for job growth in Iowa. Figure 2, based on Bureau of Labor Statistics’ projections, plots the trajectory of 720 occupations through 2026. Each occupation is plotted according to its expected job growth (the horizontal axis) and its current median wage (the vertical axis); the dots are scaled according to each occupation’s current size, and colored according to the level of education expected or required. The general pattern is not hard to discern. High-wage, high-educational attainment occupations show relatively modest growth (or losses). The big gains, by contrast, are largely in low-wage occupations (food preparation, custodial, laborers). Eight of the 10 occupations projecting gains of over 2,000 jobs (or 200 jobs a year across this span) pay less than the current median wage in Iowa.

Figure 2. Projections Favor Jobs Offering Lower Pay, Not Demanding High Education

These sectoral and occupational shifts — across the last business cycle and projected into the next decade–have implications not just for wages, but for access to job-based benefits as well. Those sectors shedding jobs (or growing slowly), for example, have generally higher rates of job-based health coverage. If job growth is concentrated in sectors or occupations less likely to offer such benefits, the burden falls on working Iowans (who go without coverage or pay a higher sticker price) and on public programs (hawk-i, Medicaid, ACA subsidies) forced to pick up the slack.

Figure 3. Job Sectors Most Likely to Offer Insurance Show Declinesswi-jobs-fig3

For one glimpse of the ways in which these shifts affect working Iowans, consider the changes in Iowa manufacturing since 2007. Manufacturing is historically a middle- to high-wage sector, especially for workers of limited educational attainment. In manufacturing, good wages (and good benefits) have been largely won and sustained by collective bargaining. As we can see in Figure 1, job losses are concentrated heavily in durable manufacturing (transportation equipment, agricultural equipment), and recovery gains are mostly in lower-wage (and lower-union density) non-durable sub-sectors such as food processing or meatpacking. In turn, overall manufacturing losses are accompanied by sizable gains in professional and business services — a sector that includes staffing and temporary services. The staffing industry employs 91,600 in Iowa, fully a third in manufacturing. Behind these sectoral shifts, in other words, lies a weakening of job security and job quality as manufacturing jobs are increasingly populated by contingent or temporary employees.

This raises the more sustained and serious trend: declining job quality (and compensation) within sectors and occupations.

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