New "reemployment" plan won't solve Iowa workforce shortage

“We want to get Iowans back to work!” Governor Kim Reynolds tweeted on October 20, touting a new business grant program financed through the American Rescue Plan, which she used to denounce as a “blue state bailout.”

But there was more: “We also announced a new reemployment case management system to refocus Iowa’s unemployment system and ensure Iowans can get back to work as quickly as possible.”

That’s a creative way of saying Reynolds plans to push more Iowans into available jobs by making it harder for them to collect unemployment benefits. However, the policy changes the governor announced at her latest news conference won’t address several important reasons many Iowans remain out of the workforce.

A NEW FOCUS ON “RAPID REEMPLOYMENT”

As usual, Reynolds put a positive spin on Iowa’s economy, claiming our state enjoys “economic vitality that many of our other states can only envy.” (In fact, many other states have seen more rapid job growth in 2021 than Iowa.)

The governor described the workforce shortage as “the primary obstacle standing in the way of really turning that encouraging, short-term trajectory into long-term, broad-based progress.” To address that problem, she has instructed Iowa Workforce Development to change its “primary focus” to “rapid reemployment.”

The agency’s director Beth Townsend told reporters that 86,572 job openings are posted on Iowaworks.gov, Townsend said, including “hundreds of virtual jobs.” Yet 67,900 Iowans are unemployed. (Data released on October 22 showed that number dropped to 66,100 in September.)

Townsend said the new case management program will allow her agency to “return unemployment to its original mission: a short-term, transitory program with a focus on reemployment as quickly as possible.”

Iowans on unemployment are currently required to engage with Iowa Workforce Development during their fifth week of receiving benefits. Beginning early next year, they will be required to start meeting with case managers during the first week, and with the exception of labor union members, will be required to search for four jobs every week instead of two.

Townsend said some meetings will happen virtually while others will occur in the agency’s fifteen field offices and three satellite offices. Using new technology and an additional eighteen case managers, agency staff “will compare individual work history with labor market information to proactively and systemically match claimants with open positions in their community.”

Citing Iowa Workforce Development spokesperson Jesse Dougherty, Ian Richardson reported for the Des Moines Register that the agency can implement the new case management system without legislative approval. Federal pandemic relief will pay for the new case worker positions. “Once that runs out, Dougherty said, the state expects the costs will be absorbed ‘through normal attrition’ at the agency.”

An October 20 news release said “the number of activities that qualify as a work search will be reduced from 27 to 12.” Iowa Workforce Development did not respond to Bleeding Heartland’s request for a list of the 27 activities that now qualify, indicating which fifteen will be cut. The governor’s spokesperson Alex Murphy said, “We’ll release the list once it becomes final.”

It’s not yet clear which changes can be made through administrative rules and which would require legislative action in 2022.

NEW POLICY WON’T ADDRESS “ROOT CAUSES” OF WORKFORCE SHORTAGE

Iowa State University economist Dave Swenson described the new approach as a “paper tiger,” since the “vast majority” of jobless Iowans do not collect unemployment benefits. According to data Iowa Workforce Development published on October 22, the state averaged 11,673 people claiming unemployment benefits during September, which works out to 17.7 percent of the 66,100 unemployed people.

Regarding the latest employment numbers, Swenson observed,

Furthermore, Iowa’s labor participation rate is lower now than it was in February 2019.

While Reynolds loves to brag about her supposedly “balanced” approach to combating the COVID-19 pandemic, letting the virus run wild and restricting where masks or vaccinations can be required may be deterring many Iowans from looking for work. That’s particularly true for people over age 50 or with health conditions that put them (or someone in their household) at higher risk of severe illness or death from a coronavirus infection.

The lack of affordable child care in Iowa has also kept many people out of the workforce, especially women with young children. And Iowans may lack the skills or the physical ability to do most of the available jobs in their areas.

Democratic state lawmakers criticized the governor’s announced changes for the unemployment program. State Senator Nate Boulton, the ranking Democrat on the Iowa Senate Labor and Business Relations Committee, said in a statement, “Governor Reynolds’ idea of having the government assign jobs to Iowa workers is all wrong. The state should instead be partnering with underemployed and unemployed Iowans to help them find the right jobs for them and their families.”

To “make it easier for Iowans to get back on the job and back on their feet,” Boulton added, Reynolds and GOP lawmakers should take up Democratic proposals “to expand access to affordable child care, to support essential workers who have remained on the job during the pandemic, and to expand efforts to help more small businesses stay open or reopen.”

Iowa House Minority Leader Jennifer Konfrst struck a similar tone about the reemployment plan.

For years, Reynolds has failed to take the necessary action to address the root causes of our workforce shortage.

We need bold action to remove barriers for Iowans to join and stay in the workforce. We need to expand access to affordable child care, make healthcare more affordable, and ensure retirement security and fair wages to support a family.

Konfrst also observed that Reynolds is yet again “taking credit for the resources she fought against earlier this year” by using American Rescue Plan funds for her new workforce initiatives. Every Republican in Congress voted against the latest COVID-19 relief package, which passed solely thanks to Democrats and President Joe Biden.

Speaking of federal pandemic relief…

MORE SIGNS CUTTING IOWANS OFF UNEMPLOYMENT DIDN’T IMPROVE JOB CLIMATE

Reynolds ended Iowa’s participation in pandemic-related unemployment programs in June, three months before benefits were set to expire. She claimed in May that the benefits were “discouraging people from returning to work,” and that her action would help Iowa “lead the way” in recovery.

Economists from Wall Street and the academic world have looked at the data from many angles and found states that cut residents off from COVID-19 unemployment programs early didn’t experience a surge in job growth. More research pointing to the same conclusion has emerged since the last time Bleeding Heartland covered this issue. Christopher Rugaber, Casey Smith, and Larry Fenn reported for the Associated Press on October 22,

In states that cut off the $300 check, the workforce — the number of people who either have a job or are looking for one — has risen no more than it has in the states that maintained the payment. That federal aid, along with two jobless aid programs that served gig workers and the long-term unemployed, ended nationally Sept. 6. Yet America’s overall workforce actually shrank that month.

“Policymakers were pinning too many hopes on ending unemployment insurance as a labor market boost,” said Fiona Greig, managing director of the JPMorgan Chase Institute, who has studied the issue. […]

An Associated Press analysis of state data found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than in the 25 states that cut off the payment early, most of them in June. The $300-a-week federal check, on top of state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs.

Reynolds owes an apology to the tens of thousands of Iowans who lost hundreds of dollars a week this summer, thanks to her desire to score political points against the Biden administration.


Appendix: October 20 news release from the governor’s office

Gov. Reynolds announces significant investments to combat workforce shortages, refocus unemployment system 

ADEL — Today, Governor Kim Reynolds announced two new programs to help combat Iowa’s workforce shortage – a new grant program to promote workforce innovation in the manufacturing sector and a new reemployment case management system to refocus Iowa’s unemployment system on rapid reemployment.  

Iowa will be investing a total of $30 million in grant opportunities, using federal funds through the American Rescues Plan Act (ARPA), to assist small and medium-sized manufacturing businesses to improve workforce innovation through retention, recruitment of new employees, and leveraging technology solutions to address vacancies and increase workforce capacity.  Advanced manufacturing is Iowa’s largest industry, accounting for nearly 18% of the state’s Gross Domestic Product.   

“Like most other states, Iowa’s ongoing workforce shortage is a critical situation that needs addressed today,” said Gov. Reynolds. “With our current economic vitality, we are ideally situated to push our economy to new heights. We are committed to providing the necessary support to our advanced manufacturing industry, and other impacted industries, to overcome this primary obstacle and turn this short-term trajectory into long-term, broad-based prosperity.”   

The first grant opportunity will supplement the existing Manufacturing 4.0 program for small manufacturers, employing up to 75 employees, with $5 million. The second grant opportunity will invest $25 million to make similar grant opportunities available to mid-size firms employing 76 – 250 employees. 

Separately, Iowa Workforce Development will soon be launching a new Reemployment Case Management system to make sure Iowans can get back to work as quickly as possible. 

Currently, unemployment recipients do not have to engage with IWD’s re-employment process until week five. Now, IWD will provide one-on-one career coaching at week one and will audit the recipient’s work-search requirements on a weekly basis for those receiving unemployment benefits. With some narrow exceptions, weekly work-search requirements will also double from two to four and the number of activities that qualify as a work search will be reduced from 27 to 12. 

“With a significant workforce shortage, I want to be sure that no Iowan who is receiving unemployment benefits unnecessarily remains on the sidelines. This new program and other changes will further that goal,” Gov. Reynolds said. 

Top image: Iowa Workforce Development Director Beth Townsend (left), Lieutenant Governor Adam Gregg (center), and Governor Kim Reynolds speak with employees during an October 20 visit to Iowa Spring Manufacturing in Adel. Cropped from a photo posted on the governor’s official Facebook page.

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