As Iowa Job Surplus Grows, Workers Call the Shots

[Adrian Laguna]

By JOHN LELAND
Published: May 31, 2008

DES MOINES — On a recent evening here, Greg Tew, 28, considered the question: What is it like to work in a state that is creating more jobs than workers? He was sitting in the lobby of a new hotel in downtown Des Moines, part of an extensive redevelopment investment to attract workers to Iowa.

“It is noticeable,” Mr. Tew, a computer programmer at EMC Insurance Companies, said of the jobs surplus. “You’re a hot commodity. Salaries go up just because companies are fighting to retain the talent they have.”

His friend Stacy Berenguel, 28, a financial advisor at Citi Smith Barney, said that while she was very conscious of talk of a national recession, some of her friends in Iowa were switching jobs over company amenities, like fitness centers. “Even when I’ve had friends laid off, they had no problem finding jobs,” she said. “So I’m willing to take financial risks, like splurging. Last weekend I went to Chicago and shopped for clothes and shoes. It was great. There were sales everywhere.”

Are these the voices of a nation looking at recession?

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.

For workers like Brando Guerrero, 25, a sales analyst at Nationwide Insurance in Des Moines, the jobs shortage means companies “have to sell themselves to potential employees, because there are so many opportunities here.”

“Do they have a free gym, dry cleaning, Starbucks on site?” he said. “What are they doing to make the community better? And once you’re there, companies know they have to promote you to keep you. We’re a little spoiled in our opportunities here.”

But for the state economy, a worker shortage can slow growth, said Benjamin Allen, president of the University of Northern Iowa. “It’s a much better problem to have than high unemployment,” he said. “But if companies think they can’t find a workforce here, it might deter them from coming out or expanding.”

Remedies are not simple. Companies want to be in Iowa because wages are lower than elsewhere in the nation or region, except South Dakota. But low wages also drive young college graduates out of the state, especially as student debt loads have risen, and they discourage workers from other states from moving to Iowa. Some, like Mr. Tew, accept relatively low wages in exchange for Iowa’s low cost of living. Companies compete on amenities and benefits more than salary, said Craig Jackman, president of Paragon IT Professionals, a recruiter and consultant firm.

Steven Smith, who runs a small technology company called GCommerce, was not deterred. After starting the company in the New York suburbs, he moved to downtown Des Moines in 2004, and expects to expand to 50 employees by the end of the year, from the mid-30s now. He said the costs of business were less than half what they were in New York, primarily because salaries and real estate prices are lower.

But he said it was difficult to hire people for advanced technical positions. “I plan a certain amount of my time during the week, 5 to 10 hours, recruiting. You’ve got to work at it. They’re not just going to come to you.”

Like many executives here, he has adopted programs to lure recent retirees back to work part time.

To retain staff, he provides stock options, flex time and short Fridays in the summer. And he has had to be flexible on salary. “People who have a real marketable skill, they know they can call their shots,” he said.

Several companies are starting to reach into the high schools, identifying students and promising to pay their community college costs, with the guarantee of a job after graduation. Others are looking to the prison system. Forty employers recently participated in a job fair for about 300 inmates in the downtown convention center.

The community college system is at the center of many efforts to address the jobs surplus. The state and private employers like Wells Fargo and Principal Financial, which are both based in Des Moines, have made $23 million available for students to take courses to prepare them for specific jobs, with promises at the end of tuition reimbursement and positions starting at $30,000 to $40,000 for graduates with a two-year degree.

But programs for the jobs in highest demand, including nurses and welders, have long waiting lists. “Employers come to us, asking, ‘Do you have any graduates coming up in this field?’ ” said Scott Ocken, dean of industry and technology. “A lot of times we have to say, ‘We do, but they’re already hired.’ ”

Robert Anderson, executive chef at the college’s culinary institute, said he had two or three job offers for every student.

For Michael LeVere, 38, a database administrator at Wells Fargo who recently accepted a newly created position at Federal Home Loan Bank, the jobs surplus has been both a balm and a chore. On a recent afternoon, he was struggling to find someone to replace him. The only applicant from Iowa was already working at Wells Fargo.

As for his new job, he said, “If this doesn’t work out, in a year there’ll be opportunities.”

To try to keep young professionals, the government and industries have poured nearly $2.8 billion into development projects in downtown Des Moines, including a new neighborhood of shops and lofts that wears its ambitions in its name: the East Village. On a recent weekend, a few restaurants had hour-plus waits for tables, and bar traffic was brisk. Mr. Tew, who lives and works downtown, said that until a few years ago, the neighborhood emptied after business hours. “Now I’m out till 12:30 or 1 in the morning,” he said. “I don’t leave the downtown area if I can help it.”

China Wong, who runs Salon W in the East Village, said her business was expanding. She recently signed a lease on a bigger space and hired two new stylists. Being out of sync with the national economy has its advantages, she said. “We have extra income for stocks that are undervalued right now,” said Ms. Wong, who previously worked for an investment research firm. “I’ve increased my stock purchases by 20 percent.”

For Jessica Miller, 23, the changes in downtown Des Moines were enough to draw her back after college in Chicago. She found her job — in marketing and advertising at a magazine group — by the city’s extensive networking channels. She said networking added to her sense of security, because she always hears of openings. “We decided at work, we’re not participating in this economic downturn,” she said.

But the state remains a tough sell with young Iowans. For Jessamyn Thomas, 18, a high school senior who hopes to move to Chicago after she graduates from Iowa State University, life in an economic bubble is not enough. “There’s opportunities here,” she said. “But it’s also the same place you’ve lived all your life, and it’s Iowa, so it’s not very exciting.”

Her classmate Tucker Slauson, 17, agreed. “There’s jobs here,” he said, “because everybody leaves.”

Well, that's certainly a stark contrast to other parts of the nation where people are desperate for jobs. I imagine a lot of those kids who leave quickly regret it.

[Superman]

Yeah, but who the hell would intentionally live in Iowa?

[TithonusSyndrome]

Neat, Iowans get to enjoy an Albertan lifestyle for a bit. Hope they enjoy the pig-ignorant nouveau-riche blue-collar assholes clamoring for work that it will likely pull in.

[DPDarkPrimus]

I find it suspicious that we've got a job surplus after a couple Department of Immigration raids.

[Darth Wong]

Yeah, but who the hell would intentionally live in Iowa?

My cousin once lived in Nebraska. He was virtually ostracized by the community because he was different (Chinese descent, funny accent, etc).

He became severely depressed at his cultural isolation, until one group finally welcomed him with open arms: the local fundie church. He's now a full-blown Bible thumper. Claims that they found Noah's Ark in Turkey but the US government is keeping it a secret because they're run by the worldwide Jewish banking conspiracy (he didn't explain why the Jews would want to keep Noah's Ark a secret).

I can't imagine why anyone would want to live in those redneck states.

[The Duchess of Zeon]

My cousin once lived in Nebraska. He was virtually ostracized by the community because he was different (Chinese descent, funny accent, etc).

He became severely depressed at his cultural isolation, until one group finally welcomed him with open arms: the local fundie church. He's now a full-blown Bible thumper. Claims that they found Noah's Ark in Turkey but the US government is keeping it a secret because they're run by the worldwide Jewish banking conspiracy (he didn't explain why the Jews would want to keep Noah's Ark a secret).

I can't imagine why anyone would want to live in those redneck states.

Ah, I remember that conspiracy theory from my childhood--I was even given books to read about it. It was very heavily pushed.

[Darth Fanboy]

Yeah, but who the hell would intentionally live in Iowa?

It's a question that is less humorous than you might think. i was at an event hosted by then GOvernor Vilsack a few years back where he pointed out that of the State's 99 counties only three were getting any younger, and the last time I checked one in six people worked for the state or local government in some fashion. When I was in high school, one of the things I remember being proposed by the state was a magazine aimed at students that encouraged them to stay in the state.

My father has been wondering why more people don't move to Iowa because of the availiability of work. There are practical reasons to do it such as the jobs surplus and the extremely low cost of living (examples, apartments for less than $300 a month in some areas, a nice two story home can be built for under $250,000). But it's like a tell him, what does rural Iowa offer that would actually make living there feel comfortable? I lived there for 19 years and it didn't take me long to want to move elsewhere.

[Battlehymn Republic]

I can't imagine why anyone would want to live in those redneck states.

Because Iowa decides the presidential candidates first out of all the other states of the union? Hell yes, that is the kind of redneck state to be living in. In theory, that is. In theory.

[Darth Fanboy]

Iowa is a pretty hick state but it does have good education and the people there aren't nearly as stupid as, say, a lot of the southern states.

[Darth Fanboy]

Ghetto Edit: Some evidence for previous post.

Iowa students' ACT scores 2nd in United States.

A link to a PDF file showing that the graduation rate for High School seniors is above 90%

[Superman]

Iowa is a pretty hick state but it does have good education and the people there aren't nearly as stupid as, say, a lot of the southern states.

Yeah, but that's kind of like saying vomit smells better than shit.

[Battlehymn Republic]

Okay, I can understand that Iowa is a rural state with a cultural (and racial) homogeneous character and that doesn't exactly have a lot of strip malls and chic cafes and falafel shops. But other than the bandwagon of dismissal, is there anything substantive at all the scorn for Iowa?

Because fuck excitement, economic stability's where it's at. If they've got a need for people with technical backgrounds, they can't be that primitive. And isn't the best way to get rid of a redneck character (besides with education) is to get some economic development going, especially by employing immigrants from diverse origins in order to inject some cultural variation and cosmopolitanism?

[Darth Fanboy]

Yeah, but that's kind of like saying vomit smells better than shit.

Yeah but when you look at it, it's more like the vomit isn't actually vomit. It's more like some nasty ass vegetables that you don't want to eat because they taste horrible, but they're good for you and even though you know they are good for you you still don't eat them because they taste terrible.

Okay, I can understand that Iowa is a rural state with a cultural (and racial) homogeneous character and that doesn't exactly have a lot of strip malls and chic cafes and falafel shops. But other than the bandwagon of dismissal, is there anything substantive at all the scorn for Iowa?

Because fuck excitement, economic stability's where it's at. If they've got a need for people with technical backgrounds, they can't be that primitive. And isn't the best way to get rid of a redneck character (besides with education) is to get some economic development going, especially by employing immigrants from diverse origins in order to inject some cultural variation and cosmopolitanism?

Well there is no sense moving to an area where you are going to be miserable even if you are better off, but still you are quite accurate with this statement.

[Battlehymn Republic]

I think there's also the chance that the misery is overstated. Sure, it's boring and white-bread, but if business is booming while we stand at the cusp of recession- who cares?

[DPDarkPrimus]

Yeah, but who the hell would intentionally live in Iowa?

My cousin once lived in Nebraska. He was virtually ostracized by the community because he was different (Chinese descent, funny accent, etc).

He became severely depressed at his cultural isolation, until one group finally welcomed him with open arms: the local fundie church. He's now a full-blown Bible thumper. Claims that they found Noah's Ark in Turkey but the US government is keeping it a secret because they're run by the worldwide Jewish banking conspiracy (he didn't explain why the Jews would want to keep Noah's Ark a secret).

I can't imagine why anyone would want to live in those redneck states.

Iowa is fairly liberal and accepting in the metropolitan areas, but of course vast swathes of the state are full of redneck farmers.

[Darth Fanboy]

Iowa is fairly liberal and accepting in the metropolitan areas, but of course vast swathes of the state are full of redneck farmers.

Fun story, when I was in Storm Lake two weeks ago for a wedding there was a farmer jsut outside of town trying to get his planting done during the wind storms (gusts up to 65mph) before the rain starting falling again, I think half of his seed blew into the nieghboring farm across the highway.

[Darth Wong]

Okay, I can understand that Iowa is a rural state with a cultural (and racial) homogeneous character and that doesn't exactly have a lot of strip malls and chic cafes and falafel shops. But other than the bandwagon of dismissal, is there anything substantive at all the scorn for Iowa?

How the FUCK is not that reason enough, fuckhead?

Because fuck excitement, economic stability's where it's at. If they've got a need for people with technical backgrounds, they can't be that primitive. And isn't the best way to get rid of a redneck character (besides with education) is to get some economic development going, especially by employing immigrants from diverse origins in order to inject some cultural variation and cosmopolitanism?

Yeah, I guess a visible minority like myself would love to live in a racially and culturally homogeneous place full of goddamned racists as long as the money is good, right? And who wouldn't want to raise kids in such an environment?

[Battlehymn Republic]

How the FUCK is not that reason enough, fuckhead?

A rural nature and cultural uniformity is worth scorn? Why do you hate farmers? They provide the necessary service in our society of receiving unnecessary amounts of subsidies and pork spending.

Yeah, I guess a visible minority like myself would love to live in a racially and culturally homogeneous place full of goddamned racists as long as the money is good, right? And who wouldn't want to raise kids in such an environment?

Ya see, that's why you probably should have said they were racists earlier. Racial and cultural homogeneity == automatic racism above the Mason-Dixon Line in a place not rivened with poverty?

And besides, the article's talking about Des Moines, which doesn't seem to be necessarily equivalent to a bunch of log cabins way out in the hollers. Just because they're talking about how the whole state having a negative reputation doesn't mean that the reputation necessarily applies to each and every sector of the whole damn place.

[Battlehymn Republic]

Touché. And lame.

[Darth Wong]

How the FUCK is not that reason enough, fuckhead?

A rural nature and cultural uniformity is worth scorn?

Yes.

Why do you hate farmers?

I don't. I do, however, hate the kind of place where people are so pig-ignorant that they ask you how long it's been since you left China, even though you have no trace of a Chinese accent.

Ya see, that's why you probably should have said they were racists earlier. Racial and cultural homogeneity == automatic racism above the Mason-Dixon Line in a place not rivened with poverty?

Rural living and racial and cultural homogeneity are correlated with racism everywhere. If you're too fucking stupid to understand why, that's not my problem.

And besides, the article's talking about Des Moines, which doesn't seem to be necessarily equivalent to a bunch of log cabins way out in the hollers. Just because they're talking about how the whole state having a negative reputation doesn't mean that the reputation necessarily applies to each and every sector of the whole damn place.

It also means that it's all relative, ie- Des Moines is highly liberal by the standards of Iowa.

[Tsyroc]

It's a question that is less humorous than you might think. i was at an event hosted by then GOvernor Vilsack a few years back where he pointed out that of the State's 99 counties only three were getting any younger, and the last time I checked one in six people worked for the state or local government in some fashion. When I was in high school, one of the things I remember being proposed by the state was a magazine aimed at students that encouraged them to stay in the state.

I actually get a magazine like that from Iowa every so often. It's trying to get people to move back to Iowa.

My father has been wondering why more people don't move to Iowa because of the availiability of work. There are practical reasons to do it such as the jobs surplus and the extremely low cost of living (examples, apartments for less than $300 a month in some areas, a nice two story home can be built for under $250,000). But it's like a tell him, what does rural Iowa offer that would actually make living there feel comfortable? I lived there for 19 years and it didn't take me long to want to move elsewhere.

I might consider it if it wouldn't put me half the country away from my parents, sister and nephew.

I'd probably regret moving back the first time I had a lot of hassles because of winter weather. Here I only have to worry about baking my ass occasionally, or shit loads of rain once every 20 years.

I sure as fuck wouldn't live in a small town unless it was very close to an actual city. I lived in Oskaloosa for a year...fuuuuuuuuuuuuuuuck that. Right before I left some guy finished building a new shopping mall called the ATPIC (All Things Possible In Christ) mall.

The Quad Cities or Iowa City I could probably take.

[Phantasee]

Neat, Iowans get to enjoy an Albertan lifestyle for a bit. Hope they enjoy the pig-ignorant nouveau-riche blue-collar assholes clamoring for work that it will likely pull in.

Took the words right out of my mouth. All of them, actually, you even got the bit about the Newfies and the Ontarians moving in...

I wonder if Iowa will see an increase in pick-up truck registrations? Especially pick-ups with a map of their owner's home state on the back window.

[Adrian Laguna]

You know, despite the fact that Iowans are racist fucks, Obama won the state. I think it's because there are few minorities in there. Basically, white people can pretend to be non-racist when they are sitting cosy in an all white neighbourhood. That's why Obama carries states that have a black population of less than 4% and states that have a black population of more than 16%, but not the states in between.

[Darth Fanboy]

You know, despite the fact that Iowans are racist fucks, Obama won the state.

So Spanky the Dolphin, Darth Raptor, DPDarkPrimus are racists, and Tsyroc and I used to be racists. Thanks for poitning that out. Our relatives and such in that state are racists also.

Yeah there are always going to be a few people that are just incurable for the rest of their lives, but to damn the populatio as a whole like that is really uncalled for, especially as the growing minority population, especially hispanics, are playing a part in what growth the state is managing. There are lots of people in Iowa who like the influx of minorites very much.

[ArmorPierce]

what is up with people getting offended with people calling a large group of people generally racist when they are generally racist. "You're racist for calling this group of people generally racist!"