CORONAVIRUS

No pandemic-related change in payroll for nearly half of Iowa businesses

A sign on the front door of Clark's Pharmacy in Cedar Rapids in April describes the benefits of various combinations of
A sign on the front door of Clark’s Pharmacy in Cedar Rapids in April describes the benefits of various combinations of mask wearing. (Jim Slosiarek/The Gazette)

A new federal report on the economic and employment impacts of the novel coronavirus pandemic suggests the experiences of Iowa businesses are similar — in some cases better — to those of businesses in other states.

The U.S. Bureau of Labor Statistics survey of nearly 600,000 businesses across the country and Puerto Rico found that the experience of Iowa companies was, for the most part, “relatively similar” to those in other parts of the country.

In other cases, the percentage of Iowa businesses experiencing pandemic-related effects on their operations was “substantially” better or less disruptive, the survey found.

“That’s what I hear from our members,” Mike Ralston, president of the Iowa Association of Business and Industry, said Tuesday.

Although hiring slowed in March and April due to employers’ concerns about whether they might have to lay off workers, Ralston said manufacturers are hiring again.

“We’re back to the same workforce challenges we had March 15,” Iowa Chamber Alliance Executive Director Dustin Miller added.

The bureau found that 47 percent of Iowa businesses reported no change in payroll due to the pandemic. It considered that figure “substantially higher” than the 39 percent average for the country.

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The percentage that decreased payroll due to COVID-19 was just under 7 percent — 11 percent nationally — while 6 percent of businesses in Iowa and across the nation increased salaries and wages.

The report did not address health effects of COVID-19, which include nearly one-quarter million Iowans testing positive and more than 2,900 deaths.

Iowa has about 70 cases per 100,000 residents compared to a national average of 61, according to the COVID-19 Tracking Project.

It reported death rates of one per 100,000 for both Iowa and the nation.

In addition to hiring concerns early on, employers had worries about keeping employees safe, Miller and Ralston said. In many cases, however, employers were able to institute necessary changes.

“For manufacturers where employees were not in close quarters, they made modifications and kept them working,” Miller said.

According to the bureau report, 21 percent of Iowa businesses reported no impact from COVID-19 compared to 18 percent nationwide.

Only 12 percent of Iowa businesses reported closures due to government mandates, which was “substantially lower” than the 19 percent national average.

Gov. Kim Reynolds has issued public health proclamations closing or reducing hours for a variety of businesses including bars, restaurants, spas, salons, fitness centers and movie theaters.

Her latest proclamation is set to expire Dec. 10.

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Many employers developed an appreciation for Iowa’s approach to keeping businesses open after they saw more severe shutdowns in other parts of the country, Miller said. In some cases, those shutdowns led to more orders to fill for Iowa companies.

Although 15 percent of Iowa businesses saw an increase in demand for their products, according to the Bureau of Labor Statistics, that wasn’t always the case.

Another 51 percent, or 46,630 businesses, reported a decrease. Nationwide, the numbers were 13 percent and 56 percent, respectively.

Iowa also reported 40 percent of businesses experienced shortages of supplies or inputs compared to 36 percent for the nation’s private sector.

Supply chain issues don’t seem to be as severe as earlier, Ralston said. In addition to hiring, employers now are asking about COVID-19 vaccines and how they will be deployed.

“They’re paying very close attention to the governor and Iowa Department of Public Health,” he said.

“They understand it will be health care and front-line workers and then the elderly, but they hope not too long after will be production workers.”

The report can be seen at bls.gov/brs/2020-results.htm.

Comments: (319) 398-8375; james.lynch@thegazette.com

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