3/31/00

Contacts:
David Swenson, Economics, 515/294-7458
Liesl Eathington, Economics, 515/294-2954
Dan Otto, Economics, 515/294-6147
Susan Thompson, Agriculture Information, 515/294-0705

NEW REPORT ON IOWA EMPLOYMENT CHANGES RELEASED

AMES, Iowa -- In the past decade, the pace and patterns of growth in Iowa's economy have produced distinct groups of winners and losers. An Iowa State University analysis of non-farm employment trends from 1987 to 1997 shows drastic differences in both the geographic location and industrial mix of Iowa's employment growth. The report was prepared by Liesl Eathington, David Swenson and Dan Otto, ISU economics department.

"Though Iowa's economy is marching forward steadily and has some discernible strengths, some elements of the economy are lagging. Still others are spectators," says Swenson. "Iowa's industrial strengths and weaknesses are distributed unevenly across the state and among its workforce."

Total nonfarm employment in Iowa increased by nearly 353,000 jobs between 1987 and 1997. Overall, the state's nonfarm employment growth rate exceeded the national average rate, with Iowa's employment increasing 25.5 percent and the nation's employment increasing 20.7 percent.

"However, growth rate comparisons tell us little about the kind and quality of job growth in the state," Swenson says. "Most of Iowa's growth during that 10-year period was in services (42 percent), retail trade (21 percent) and manufacturing (12 percent)."

During the 10-year period analyzed, Iowa's total population increased by 87,000 and total employment increased by 353,000 jobs, which shows most new jobs in the state were filled by current residents.

"While it seems clear more Iowans are joining the nonfarm workforce and more Iowans are holding multiple jobs, whether they are doing so by choice or necessity is less clear," Otto says. "Changes in the state's average earnings per job do not suggest they are being enticed by high wages. In fact, the earnings outlook in much of Iowa isn't good."

In 1997, Iowa's average earnings per nonfarm job was $25,300. Adjusted for inflation, that would buy about $80 more in groceries than it would have in 1987. While average earnings per job have increased slightly, Iowa's position relative to the rest of the United States has eroded. Nonfarm jobs in Iowa earned just 81 percent of U.S. averages in 1997, compared with 84 percent in 1987.

Iowa's counties were grouped into four categories to conduct the employment analysis. This grouping placed 10 counties in the metropolitan category, nine in the large urban category, 60 in the small urban category and 20 in the rural category. The metropolitan counties have a central city of at least 50,000. Large urban counties have a central city of 20,000 or more. Rural counties are those without a city of 2,500 or more. The remaining are the small urban counties.

The ISU report shows 49 percent of Iowa's jobs and 44 percent of its population are concentrated in 10 metropolitan counties. The large urban counties have 14 percent of both jobs and population. Small urban counties have 31 percent of the state's jobs and 34 percent of its population. The 20 rural counties have just 7 percent of the state's population and 6 percent of its jobs.

Otto says the report illustrates several key trends:

• Nonfarm employment has grown steadily statewide and in nearly all counties. But some areas are posting substantially stronger gains in new jobs and population.
• There is a continued concentration of higher-valued manufacturing jobs and higher-skilled service jobs in the state's metropolitan counties. Small urban and rural counties are gaining in traditional manufacturing and in lower-valued service jobs.
• There is a discernible qualitative difference in many of the kinds of jobs being created across the state. Higher-quality manufacturing and professional service jobs are concentrated in metropolitan counties.
• There is a persistent erosion in the value of labor when measured against the U.S. average. And the earnings gap between growth centers and smaller counties is widening. A tight labor supply has not bid up average earnings.

"Policymakers' desires notwithstanding, Iowa will continue to become more urban," Swenson says. "The technical, economic, social and cultural efficiencies and advantages of urban areas are strong and growing. Communities and counties that are adjacent to or otherwise linked with growth centers stand to gain both economically and in population in the years ahead."

The full report, titled "Nonfarm Employment Changes in Iowa from 1987 to 1997," is available on the Web at: http://www.econ.iastate.edu/research/webpapers/NDN0075.pdf

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