Iowa resident Laura Abney warned it will take some heavy lifting for the state to raise itself out of its current employment crisis.
“There is a worker shortage in Iowa,” Abney recently posted on Twitter. “Until that is addressed, lower paying jobs will not be filled. Workers are wanting to a living wage.”
Even before the COVID-19 pandemic hit, the state was battling with a worker shortage that has only been heightened by the crisis. So far, policy changes such as the federal government moving to end such benefits as an additional $300 per month in unemployment payments have not had much of an effect in getting workers to return.
With Iowa being among the first states to end such benefits, those like JPMorgan Chase Institute Managing Director Fiona Greig still warned “policymakers were pinning too many hopes on ending unemployment insurance as a labor market boost. The work disincentive effects were clearly small,” the Associated Press reported.
Iowa Gov. Kim Reynolds formally moved to cut off the extra benefits on June 12, reasoning back then “now that our businesses and schools have reopened these payments are discouraging people from returning to work,” according to a statement at the time.
But since that time, the state’s labor force participation rate has essentially gone unchanged, with state data pegging it as standing at 66.6% in June and at 66.8% in September. Bottom-line numbers show that only 6,500 more people in the state were working in Iowa in September as opposed to two-months prior in June, with the state’s unemployment rate remaining unchanged at 4.0%.
A spokesman for the governor said her decision to quickly move to end the extra benefits was one element in the governor’s effort to address the state’s workforce shortage.
“Iowa’s workforce shortage is a complex issue and the governor is focused on developing and implementing comprehensive strategies to resolve it. Ending (extra federal unemployment) enhancements was just one way to encourage individuals to return to the workforce in the near term,” Reynolds spokesman Alex Murphy said in an email, Sioux City Journal reported. “The bigger opportunity is transforming the unemployment process to a re-employment system which is already underway at (Iowa Workforce Development).”
State officials have recently insisted they’ve revamped such incentive-laden programs to focus on higher-paying jobs.
"If you're having trouble finding workers, it's no wonder," Iowa Economic Development Authority Director Debi Durham recently told a crowd gathered for The Siouxland Initiative’s annual luncheon in Dakota Dunes, Sioux City Journal reported.
As part of a plan to stem the tide, Durham pointed to a new program jumpstarted by Reynolds that would require Iowans receiving unemployment benefits to meet weekly with state case managers, conduct twice as many weekly work searches and undergo audits to prove they're actively looking for work.
Alerts Sign-up