A Surplus of Jobs In Iowa
Kurt Brouwer May 31st, 2008
Unemployment has gone up a bit nationally, although at 5% it is still low by historical standards. Yet, in some parts of the country the problem is not having too many workers, but rather having too many jobs and not enough workers. That is the case in Iowa as this New York Times piece (free registration may be required) spells out [emphasis added]:
As Iowa Job Surplus Grows, Workers Call The Shots (New York Times, May 31, 2020, John Leland)
As rising unemployment and layoffs beset workers around the country, Iowa faces a different problem: a surplus of jobs. Or to put it another way: a shortage of workers. A survey of companies by Iowa Workforce Development, a state agency, found as many as 48,000 job vacancies, in industries including financial services — Des Moines trails only Hartford as the nation’s insurance capital — health care and skilled manufacturing. One estimate projects the job surplus to reach 198,000 by 2014, with vacancies increasingly in professional positions. Greater Des Moines alone faces a shortfall of 60,000 workers in the next decade.
The state provides a small, advance view of what some economists predict will be a broader shortage of skilled workers in the next 20 or 30 years, as tens of millions of baby boomers retire from the workplace, and the economy produces more new jobs than workers. Potential consequences include slower economic growth and competitiveness, as well as higher wages for skilled workers and greater inequality.
Estimates of the national shortage run as high as 14 million skilled workers by 2020, according to widely cited projections by the labor economists Anthony P. Carnevale and Donna M. Desrochers.
But other economists believe the number will be lower, as the labor market adjusts to changes in the economy and advancements in technology. The federal Bureau of Labor Statistics does not make projections about a labor shortage, but such estimates are often hotly contested because they are often used to support positions on immigration policy.
Iowa’s surplus arises from colliding trends: the exodus of young college graduates, a state economy that adds 2,000 jobs a month, low immigration and birth rates, and an image problem that makes it difficult to recruit workers from out of state. Iowans’ median age is nearly two years above the national figure, and the state is near the top in the rates of women in the workforce and workers with multiple jobs — further shrinking the pool of people who might be drawn into the market.
“It’s really a perfect storm,” said Elisabeth Buck, director of Iowa Workforce Development. Over the next decade, more than 70,000 workers a year will become eligible for retirement, with school enrollment — potential replacement workers — dropping by 20,000 since 1998, while the nationwide housing crisis makes it harder for companies to recruit from out of state, because potential employees cannot sell their homes.
Last year, the state added nearly 13,000 nonfarm jobs, in part because of growth in ethanol and wind energy, and lost 3,300 people from the workforce. With statewide unemployment at 3.5 percent, compared to a national rate of 5 percent, nearly everyone who wants to work and can work has a job. “We’re looking for ways to grow our population,” Ms. Buck said…
Based on the growth in jobs and the loss of workers, it’s hard to imagine they have any unemployment in Iowa. In an earlier post, we noted the same issue in Montana (see 2% Unemployment — The Greatest Story Never Told).
You may have noted in this story that the theme of Baby Boomer generation retirements came up. This is a demographic trend that will have profound impacts on many economic issues over the next few decades. In this case, the retirement of baby boomers (see First Baby Boomers To Retire Are Doing Well) leads to job opportunities for the next generation.
