Reynolds touts policy wins to Iowa employers struggling to recruit workers

CEDAR RAPIDS — Iowa Gov. Kim Reynolds painted a rosy picture Wednesday of the state’s economic future.

Reynolds, speaking to a gathering of 500 influential business leaders from across Iowa and the Midwest in downtown Cedar Rapids, pointed to a low cost of doing business in Iowa, a falling unemployment rate down to 2.7 percent and a record number of new business entities registered in the state last year.

The governor, addressing the Iowa Association of Business and Industry's annual conference, touted Republican “policy victories” during the recently concluded Iowa legislative session. Those include cutting local property taxes, consolidating state government agencies, expanding registered apprenticeships and using taxpayer dollars to help Iowa families pay to attend the private school of their choice, while building a projected $2 billion state budget surplus.

"I’m proud to say it’s a great time to do business in Iowa, and the signs are everywhere,“ Reynolds said.

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Iowa business and industry leaders say they continue to struggle to recruit and retain top-quality workers. Some expressed concerns over Iowa making national headlines for passing laws targeting LGBTQ individuals that they worry paint the state as unwelcoming, and could exacerbate Iowa's workforce recruitment and retention issues.

While unaware of any employees who have left Iowa or applicants who have declined to apply for openings because of the legislation, “we definitely have our eye on that,” said Sarah Miller, a partner with marketing and technology firm Anthologic of Des Moines.

“Our eyes and ears are very open to that,” Miller said. “We talk a lot about it in our leadership teams, and are hoping the governor and our leadership have their eyes on it as well. I do think if we’re not feeling it today, we will feel it in the future.”

Reynolds has embraced the conservative “anti-woke” message leading up to the 2024 presidential GOP caucuses, focused on pushing back on acceptance of transgender people and efforts to address racial inequality.

“I think there is a delicate balance between what is pro-business and what is pro-workforce,” Miller said. “We are a very pro-workforce organization. … I do have concerns that we are getting away from a pro-workforce focus.”

The governor declined to take questions from reporters at the conference.

Reynolds highlighted recent Census figures that showed some promise: more people are moving into the state rather than out.

“For the first time in decades … net migration into the state of Iowa was positive, up by more than 6,300 people,” Reynolds said. “And while that might not sound like a lot,” the governor noted neighboring states of Minnesota and Illinois saw a net reduction of more than 17,000 residents and 230,000 residents, respectively.

The figures come from a Census Bureau report comparing annual population estimates for 2020 to 2022.

The Census Bureau numbers show Iowa’s overall population grew less than the national average. The state grew the 30th fastest in the country last year, and the 29th fastest since 2010.

Iowa also has the 10th-worst rate for “brain drain” — 34 percent more college graduates leave the state after graduation compared with those who remain in Iowa, according to a Washington Post analysis that used data from a paper published by the National Bureau of Economic Research. That figure is worse than the six states bordering Iowa. The next closest is Wisconsin at negative 21 percent.

“We continue to make investment in broadband, housing and child care that really works toward strengthening our workforce and helping employers attract and retain top talent,” Reynolds said.

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The governor also highlighted signing into law legislation creating an Office of Apprenticeship within Iowa Workforce Development, which will be responsible for the registration and certification of apprenticeships in the state.

Reynolds said the bill will help facilitate Iowa's growth in providing apprenticeships and “building” a “talent pipeline” to supply businesses with the qualified workers they need.

The governor also touted signing a youth employment bill that allows 14- to 17-year-old Iowans to work more jobs for longer hours.

Supporter say the new law provides more opportunities for young Iowans who want to work and could help address the state’s shortage of workers. Critics contend it will put young Iowans in dangerous workplace settings.

The law allows 16- and 17-year-olds to participate in work-based learning programs in industries that currently are prohibited for minors, including roofing, demolition, manufacturing and construction.

The U.S. Department of Labor wrote a letter stating the legislation violated multiple federal labor regulations. However, the department’s assessment applied to an earlier version of the bill different from the one Reynolds signed into law. The governor Wednesday criticized national media coverage of controversy over the bill as “hysteria” she called “ridiculous” and “bizarre.”

“It was a common-sense bill,” Reynolds told conference attendees. “I don’t know, at the national level they just don’t understand what we’re trying to do here and they don’t understand the work ethic Iowans have.”

She also pledged recently passed property and income tax cuts are “just the beginning”

“Look for further cuts in the next session,” Reynolds said.

Jack Hasken, president and chief executive officer of Jackson Manufacturing in Maquoketa, said he struggles to find a pool of young workers who want to grow and advance with the company in a small, older rural community.

Hasken, though, lauded Reynolds and her agenda. He said he does not share the same concerns as Miller and other business leaders about recent LGBTQ-related bills impacting recruitment and retention.

“She’s got the business owners front and center,” Hasken said.

Comments: (319) 398-8499; tom.barton@thegazette.com