David Elbert is a former business editor and columnist for the Des Moines Register. He now writes about local history for DSM Magazine. 

Iowa’s long history of low wages is producing a crisis that state officials either can’t see or choose to ignore. The extent of the damage can be seen in a study commissioned last December for the Iowa Department of Education.

The Iowa Capital Dispatch revealed last month that officials who commissioned the report expected it would support their efforts to persuade lawmakers that four-year degrees should be added at Iowa’s two-year community colleges.

Instead, “The study attributes workforce shortages to the business climate, not the higher education system,” wrote Dispatch reporter Brooklyn Draisey.

The 119-page report by The National Center for Higher Education Management Systems (NCHEMS) is dated March 26, but it was not made public until last month, long after the legislative session ended in early May. Iowa Capital Dispatch obtained the report through a public records request.

The timing of the report is less significant than its unexpected content, which contradicts arguments to expand the reach of Iowa’s two-year colleges.

“The state does not have widespread shortages of educational supply,” the report said. “Demand for educated workers in Iowa is not increasingly rapidly,” it added.

Worker shortages, which state officials and business leaders have complained about for years, “were more likely due to other causes” than a lack of educational opportunities, NCHEMS said.

Essentially it said Iowa’s worker shortage is the result of Iowa’s longstanding brain drain, which for decades has resulted in Iowa-educated students leaving the state because they find better opportunities elsewhere.

But the study adds a new twist. Traditionally, when Iowans talked about a brain drain, they were referring to people with four-year and graduate degrees taking jobs in Minneapolis and Chicago, as well as on the east and west coasts.  

Now that phenomenon also applies to Iowans with two-year degrees, who take jobs closer to home in nearby South Dakota, Nebraska, Minnesota, Wisconsin, or Illinois. According to the NCHEMS study, Iowans with two-year college degrees, and in some cases even high school graduates, can find higher paying jobs just across the border in adjacent states. 

For years, many have argued that Iowa’s minimum wage was part of the problem, but the minimum wage is not mentioned in the NCHEMS analysis, probably because the study is about educational accessibility. Iowa’s minimum wage is several steps removed from that matrix.

Nonetheless, Iowa is one of fifteen states with a minimum wage of $7.25 an hour. Only two states, Georgia and Wyoming, have lower ($5.15) minimums-wage laws. And only one of Iowa’s immediate neighbors, Wisconsin, has a $7.25 an hour rate. Three other states that share a border with Iowa – Nebraska, Illinois, and Missouri – have minimum wages of $15 an hour, while Minnesota’s minimum is $11.41 and South Dakota’s is $11.85.

The NCHEMS study shows that wages in Iowa are particularly bad at both ends of the life spectrum – for people who work in pre-school daycare and in nursing homes.

Pay is also low for occupations that are expected to experience growth during the next decade, including nursing, management, accounting, and education. And as long pay in Iowa is lower than in surrounding states, employers can expect to have problems filling jobs, the study implied.

In the meantime, employers and public officials should not assume that labor shortages are the result of a lack of educational resources, when they are more clearly the result of Iowa’s low-wage business climate.

The study said that while there may be some rural areas of Iowa where educational opportunities are lacking, those areas are limited and are not growing.

When you look at the state as a whole, it said, “Iowa has more (educational) institutions per 100,000 adult residents than 42 other states.”

A good question now is whether policy makers and business leaders will do anything about Iowa’s real problem, or will continue to pretend it does not exist.

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