'State of Working Iowa' finds less security, more inequality

An annual report from an Iowa City public policy organization paints a somber, if not downright depressing picture of public and private employment in Iowa.

In the 2013 issue of "The State of Working Iowa" from the Iowa Policy Project released Friday, author Colin Gordon writes that the economic recovery has offered Iowans little relief from the challenges of diminished job security and widening inequality.

"In Iowa and the nation, the recession exaggerated a drift toward diminished employment security and widening inequality," says Gordon, a senior research consultant for IPP and history professor at the University of Iowa. "In Iowa and the nation, the recovery has offered little respite."

The report recommends a variety of policy changes to refocus state attention on policies that can be effective. They include raising and enforcing the minimum wage, investing in education, and recognizing the value of collective bargaining to working families.

"Iowa remains about 52,000 jobs behind the pre-recession mark and, at its recent pace of job creation, it will take about two years to clear the jobs deficit," Gordon said in a conference call Friday. "The recovery has eased some of the steep job losses from recession in Iowa, but the state still shows a net decline in two traditionally high-quality job sectors - construction and manufacturing.

"Iowa workers have not been the beneficiaries of growth in the economy. While the Iowa economy has grown by 67 percent since 1979 in terms of income, wage earners have seen little of that."

Gordon said the long-term pattern is pretty clear with more retail and service jobs being created with accompanying lower wages and few, if any, benefits.

"In the nation and in Iowa, we see a long trend toward lower-wage service employment,” Gordon said. “Sustained losses in key middle-income sectors - such as manufacturing and public service - have not been accompanied by real opportunities elsewhere in the economy.

"Working families have lost a lot of ground across the last 40 years - except for a short period in the late 1990s. These years saw slow growth for all but the highest earners, despite steady gains in aggregate income and productivity, and steady gains in the educational attainment of workers."

The most recent business cycle did not hit Iowa as hard as it hit the rest of the country, he wrote, "but our wages were already low."

Gordon said the education premium, the return on investment in higher education, has been uneven and uncertain.

"Workers are better educated than they were a generation ago, but many are not seeing the benefits," Gordon said. "In 1980, 40 percent of low-wage workers (those earning less than $10 per hour) had not completed high school, and just over 25 percent had completed some college.

"By 2010, these numbers had nearly reversed: Fewer than 20 percent of low-wage workers came from the 'less-than-high-school' cohort, and more than 43 percent had some college under their belts and they're earning $10 an hour."

In other words, he said, "while low-wage workers have become a smaller share of the work force than they were 30 years ago, almost half of them have had at least some college education - about twice as great a share as 30 years earlier."

While contending it's still advantageous for Iowans to improve their skills, Gordon said education is more of a gamble today given the costs of a full four-year college degree and available employment opportunities.