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Experts say Iowa is facing shortage in labor supply due to multiple factors

Updated: May. 11, 2021 at 10:45 PM CDT
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IOWA CITY, Iowa (KCRG) - Mia Nicosia and Alyssa Graf are two of the thousands of students graduating from the University of Iowa this spring. They’re both leaving the Hawkeye state after graduation for jobs in Chicago.

“It’s always been a dream of mine to live in the city for a couple years,” Graf said, “I just think it be really cool something to experience.”

Dave Swenson, an economist and research scientist at Iowa State University, said Iowa’s problem keeping college graduates and attracting new workers into the state’s workforce isn’t new.

“We are really really great at educating our young people, among the best in the nation, at educating and completing the educations of our young people. But we export them,” Swenson said.

Swenson said neither are some of the state’s other economic issues.

“For a 15-to-18 month period going into the pandemic, Iowa’s economy did not grow at all. It was flatlined. It was just not growing. That already tells us Iowa isn’t necessarily a place of rapid growth,” Swenson said.

Swenson said the pandemic led to a collapse in the labor supply.

“The national labor supply is about 2.5% less than it was a year ago or so. But Iowa’s labor supply is 5% less. And when I say 5% or more, 5% less than it was prior to the pandemic,” Swenson said. “So we are twice as bad, in terms of that contraction as the national experience. And it raises a huge issue. What happened? Why did people leave the labor force at a higher rate in Iowa than perhaps in other states?”

Swenson said there are several possible factors to the decline, including women leaving jobs to take on childcare and remote learning, people retiring and leaving the workforce early, and some people just not feeling safe going back to work yet with the pandemic.

The Iowa City Area Development Group says they’re seeing the most need in hourly positions.

“How things shake out over the summer as vaccinations roll out and people become more comfortable, we’re optimistic that that will loosen some of the hesitance or limitations to our applicant pool,” Tom Banta, vice president of strategic growth with the organization, said.

Swenson said the constraint on the labor pool will slow Iowa’s rate of economic recovery from the pandemic.

“It’s going to take us longer to recover all of our lost jobs than it probably is going to take a national level,” Swenson said.

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