DES MOINES — Uncertainty continues to swirl around Iowa’s employment market after COVID-19 business shutdowns brought historic job losses, and efforts by companies to rebound financially and diversify have been met with a derecho headwind that further stalled progress.
After Iowa swung from record low to record high unemployment numbers, some recruiters are reporting brisk job applicant activity as laid-off experienced workers return to a job market ravaged by nearly three months of closures and survival-mode companies look to “right size” their operations.
“We have never been busier,” said Samantha Rogers, a senior human resources manager with the Skywalk Group employment recruiting firm in Cedar Rapids.
Experienced workers — especially in administrative and professional areas — who have been forced to leave because of layoffs, furloughs or closures due to the coronavirus pandemic are seeking placements as Iowa’s economy reopens.
Iowa’s very low unemployment rate at the start of 2020 meant most viable job candidates likely already had been placed, Rogers noted, and Gov. Kim Reynolds’ administration constantly bemoaned the lack of a skilled workforce.
But the arrival of COVID-19 in March and the efforts to control its spread have — at least temporarily — reshaped the job market landscape as struggling businesses shed workers.
Added to that shake-up came the uproar over George Floyd’s death at the hands of Minneapolis police, and the rise of Black Lives Matter protests and awareness by companies of the need to boost their diversity, equality and inclusion training and hiring.
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Beth Townsend, director of Iowa Workforce Development, said the state’s overall job market has improved significantly since April and May when initial jobless insurance claims peaked. The current job market is “very competitive” given that the number of unemployed Iowans in July stood at 107,300.
“Jobseekers are giving more consideration to items such as job security, what job they desire, the type of work they want to perform and the company’s values, culture and location as well as safety issues in light of the pandemic,” she said in an email. “Employers will be putting policies and programs in place to address these areas of concern.”
Townsend is coleading a subgroup of the Governor’s Economic Recovery Advisory Board that is looking at issues of attracting and retaining a diverse and skilled workforce, addressing barriers to labor participation — including how to return Iowans to work safely — identifying opportunities and providing workforce training, especially for workers dislocated as a result of the pandemic.
Rogers, who specializes in diversity and inclusion areas of employment, said she “absolutely” believes companies have the capacity to diversify their workforces while also dealing with coronavirus-related revenue concerns by approaching recruiting in different ways that open opportunities.
At the same time, she noted she has observed companies go into a “let’s get through COVID” survival mode where not only are they not diversifying, but they were not hiring at all.
“I’m noticing employers switch gears from ‘Where do I find great people?’ to “How do I keep my great people?’” she said.
Analysts say U.S. companies added fewer jobs than expected in August, suggesting the labor market is rebounding only gradually as employment remains well below pre-pandemic levels.
Iowa Workforce Development officials say manufacturing, leisure and hospitality and retail trade have been particularly hard hit. But COVID-19 may have hastened layoffs and business closures that might otherwise have occurred several months later as consumer preferences shifted away from brick-and-mortar establishments.
Firms that were operating on razor-thin margins may have had to rely on government assistance to stay afloat, and those funds may not have been enough for some, the agency said, adding that it will be important to track which layoffs are permanent.
“Given the unprecedented nature of the past few months on the economy, it may be a few years until we determine the lasting effects of COVID-19, the resulting economic fallout, and which industries struggled versus which industries adapted and thrived in the wake of the pandemic,” according to an agency analysis.
Experts say the pandemic-induced unemployment crisis has widened Iowa’s labor market inequities in a state where African Americans make up 3.5 percent of the population but had a 9.3 percent jobless rate in the most recent data. Iowa’s overall jobless rate stood at 6.6 percent in July, down from 10.2 percent in April.
“For people of color in Iowa, the unemployment rate has always been higher than the state average. The ramifications for COVID typically only serve to widen the gap,” said state Rep. Ras Smith, D-Waterloo. However, he noted in the current pandemic “we’re seeing people across all backgrounds, all races and all ethnicities really struggling to find employment.”
While COVID-19 has amplified gaps, Smith said “the biggest change culturally is that we’re all feeling it now. It’s not just people of color or minorities or poor people. Everyone is struggling to get by.”
The challenge for Iowans is to “broaden our reach” by creating more spaces where people feel welcomed and their cultures accepted. He said employers have to find a way to diversify in a changing work environment because “one helps to solve the other — when you diversify your workforce, you also diversify the ideas that are brought to the table and I think innovation is the key to really digging ourselves out of the spot that we’re in.”
Black Lives Matter protests and the elevating of issues related to social justices also have shed light on systemic barriers faced by people with disabilities and hopefully will “move the needle’ on increasing diversity and inclusion in the workplace, said Monica Brockway of Iowa Vocational Rehabilitation Services, which serves about 2,000 Iowans in Iowa City and Cedar Rapids locations.
“Our job candidates are not new to adversity, but the last few months have been especially trying,” she noted. “We’ve seen the greatest impact to folks working in the retail, leisure and hospitality industries. Job candidates with customized positions have been disproportionately impacted. Some job candidates have had to rethink their employment goals to better align with the new job market.”
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In some ways, Brockway noted, COVID-19 “leveled the playing field” for workers with disabilities who were able to work from home and thereby eliminate some logistical and accommodation challenges.
At the same time, she said, the effects of the Aug. 10 derecho have caused “significant disruption to hiring” as businesses turn their attention to storm recovery and communications disruptions contributed to a host of problems that should be temporary.
“We are working with local leaders and advocacy groups to highlight employment as an economic vehicle for self-sustainability and empowerment,” said Brockway. “By bringing awareness to cultural bias around disability and employment, we can help employers create more inclusive hiring strategies, and retainment of diverse staff.”
Colin Gordon — a University of Iowa history professor and senior research consultant for Common Good Iowa, a progressive policy and advocacy group — recently issued a report focused on immediate challenges of the COVID-19 recession and civic turmoil that he said “demands more than just a rush back to normal.”
The pace and scale of job losses when coronavirus hit Iowa last spring, Gordon said, fell heavily on low-wage workers in front-line jobs deemed “essential” — who disproportionately were women and workers of color.
Oftentimes, virus-related concerns forced workers to leave the labor market to meet family obligations as public schools closed — many with limited and inequitable access to paid leave who also lost their job-based health coverage during a public health crisis, he said.
Policymakers should target government resources at areas of greatest need: “those held back by a long history of systemic racism; those struggling to make ends meet even before the current crisis, and those hit hardest by the COVID recession,” Gordon said in his report.
“The economy fell off a cliff in March 2020, and we are still picking through the wreckage and tallying the damage,” Gordon wrote. “The depth and suddenness of the economic collapse, alongside the unprecedented public health crisis that precipitated and accompanied that collapse, exposed glaring gaps and weaknesses in our public policies, and underscored systematic inequalities in economic and policy outcomes.”
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