Iowa struggles with worker shortage despite uptick in unemployment
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There's no doubt you've stumbled across a "Now Hiring" sign at the drive-thru or grocery store.
- Like the rest of the U.S., Iowa employers say there's a shortage of available employees in industries like construction and hospitality as the economy picks back up.
Why it matters: The inability to fill open jobs has an immediate impact on our everyday lives, like long waits at our favorite restaurants.
- Long-term though, it slows our economic recovery and stifles business expansions.
Driving the news: The U.S. economy added a mere 266,000 jobs last month. Forecasters had floated gains close to 1 million, making this the biggest miss, relative to expectations, in decades.
- But the reasons why we're dealing with a worker shortage are still up in the air, despite the state's higher unemployment rate.
- Iowa's unemployment rate was 3.7% in March — up from 2.9% a year ago, according to Iowa Workforce Development.
One argument is that the extra $300 in weekly unemployment benefits introduced during the pandemic dampens motivations to go out and work.
- "Who wants to work when you can make about the same being at home? I think we'd all take that deal," said Matt Everson, state director of NFIB.
The other side: Unemployment benefits may delay job searches, but they don't end them altogether, said Dave Swenson, an ISU economist. For one, many people want the health care benefits that come with a steady job.
- Plus, you have to prove you're job searching to keep qualifying for benefits — a strike against the idea that people are simply sitting at home raking in cash.
- "There isn't a simple narrative," Swenson said.
Other Iowa-specific factors that may play a role:
- Iowa already didn't have enough workers to fill open jobs, pre-COVID. Our latest census numbers show stagnant population growth, continuing the problem, Everson said.
- The state saw an abnormally high number of people exit the workforce altogether in 2020, including moms and older Iowans taking early retirement, Swenson said.
Be smart: Some economists say the surge in job creation could also just be outpacing hirings and search efforts, according to the New York Times.