A new report suggests Iowa faces a years-long slog to recover jobs the state lost in the last recession.
In fact, when population growth is counted, the report said that to hit its pre-recession employment peak in three years, it would take nearly double the growth in jobs that’s being experienced now.
“We still have a substantial jobs deficit,” Colin Gordon, senior research consultant for the Iowa Policy Project, told reporters on a conference call Tuesday. The Iowa City-based research group issued its annual “State of Working Iowa” report Tuesday, calling the recovery “drawn out and dismal.”
The report, which mostly described long-standing trends in the state, bemoaned wage stagnation, the replacement of higher-paying jobs with lower-paying ones and eroding returns on education investments for Iowa families.
Gordon said the state still needs to add 36,000 jobs to reach its pre-recession peak employment levels. But given the population gains since then, it would require an additional 56,000 jobs, or 89,000 total, to reach pre-recession employment rates, the report said. At 2,500 per month, that would take three years.
The problem is that, since the the recovery began in Iowa in December 2009, average monthly job growth has been about 1,000 per month in new non-farm positions, the report said.
The jobs picture has improved since then. Between January and the end of October, monthly job growth has averaged more than 1,500. But that still leaves a lengthy recovery period if the number of jobs doesn’t spike upward.
The report also focused on the types of jobs being created in Iowa. It said the state’s steepest job losses are good-paying construction and manufacturing jobs, while areas showing net gains — education and health services — “are at the lower end of the wage spectrum.”
“We’re not gaining back the jobs that we lost,” Gordon said.
The report, as it has in the past, laments the state’s wage picture. It said the median 2011 wage of $15.23 per hour is 80 cents lower than the national median. Meanwhile, higher wage earners make even less than their national counterparts and even most of their Midwest peers, the report said.
At the 80th percentile, Iowa’s wage is $24.24 per hour, $4.50 behind the national rate, the report said. That is lower than all other Midwest states except South Dakota. That lower pay rate at the top of the scale contributes to Iowa being ranked relatively low in income inequality. A recent report ranked Iowa last in income inequality of all the states, even though it said the problem is growing here.
The Iowa Policy Project report also said that returns on education investments are eroding in Iowa. The report noted that in 1980, 19 percent of low-wage workers (those earning less than $10 per hour in 2011 dollars) had taken some college classes and 6 percent were college graduates. In 2010, a third of the low-wage work force had received some college education and 10 percent were graduates.