Iowa has ample job opportunity, study says

Stephanie Veldman

Iowa continues to be a state of increasing job opportunity and earnings in spite of limited population growth, according to a study done by Iowa State economists.

The study, focusing on county-level employment and earning data, was done by economics professors Peter Orazem and Daniel Otto.

“The unemployment rate in Iowa in October was 2.2 percent,” Orazem said. “The labor market is tight, and firms are complaining they can’t find enough workers.”

Dave Swenson, scientist in economics, said Iowa has had very low unemployment during the past seven years because the number of jobs has increased by a quarter of a million and the number of people has increased by only 75,000.

“We wanted to do the study at a county level so we could see which counties are having problems and which are doing well,” Orazem said. “I think we are very close to projecting the state’s growth and earnings.”

The study estimates that non-farm economy jobs in Iowa will increase by 2.1 percent by the end of the year, compared to 2.5 percent at the end of 1998.

Otto said what surprised him the most in the study was the fact that eight out of the top 10 counties under employment growth were rural counties.

“Some of the strongest growing counties were found in rural areas in the southern tier of the state,” Otto said.

The study showed that from 1997 to 1999, the three metropolitan counties with the most growth were Johnson, Linn and Polk. The three rural counties with the most growth were Clarke, Lucas and Marion.

“It is clear there has been a slowing down of employment growth in the state, but I am surprised it hasn’t even slowed down even more,” Orazem said. “Iowa has the lowest unemployment rate in the nation.”

Even though employment is growing, earnings have been decreasing during the last 18 years.

“Overall since 1980, Iowa’s average earnings have gone down,” Swenson said. “In 1980, Iowa was at 92 percent of the national average of job earnings. In 1998, it has declined to 86 percent.”

Swenson said the reason for the decline in wages is that most jobs are either part-time or in industries that don’t pay well.

The Bureau of Economic Analysis said the average earnings per job in Iowa is $25,300, compared with the national average of $31,150.

“At the moment, there aren’t that many clouds on the horizon for non-farm manufacturers, retailers and businesses,” Orazem said. “At some point we will have to hit a recession, but not in the near future.”