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.

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More evidence cutting jobless benefits didn't boost Iowa's economy

The latest Iowa employment statistics “are disappointing,” Iowa State University economist Dave Swenson tweeted on September 17 after the U.S. Department of Labor released new figures for August. Swenson noted, “Total employed and total labor force are down, unemployment levels rose slightly, and unemployment rate is unchanged” at 4.1 percent. Meanwhile, Payroll nonfarm jobs declined.

Governor Kim Reynolds’ decision to cut off pandemic-related federal unemployment benefits in June (three months early) “to goose the economy turned out to be a dud,” in Swenson’s view.

A growing body of research supports that conclusion.

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"No uptick in employment" in states ending pandemic benefits

Census survey data indicates that there was “no uptick in employment” in the twelve states that cut residents off from federal pandemic-related unemployment benefits in mid-June. However, residents of those states were more likely to report it was “somewhat difficult” or “very difficult” to pay for usual household expenses, compared to surveys conducted before the unemployment programs ended. 

Arindrajit Dube, an economics professor at UMass Amherst, published his findings on July 18.

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Job searches down in first states to end pandemic unemployment

Job searches are lower in states that were first to cut off federal pandemic-related unemployment benefits, compared to states that have continued to participate in those federal programs, according to analysis by Jed Kolko, the chief economist for the online jobs site Indeed.

Governor Kim Reynolds announced on May 11 that Iowans would cease to be able to collect the pandemic-related unemployment, effective June 12, putting Iowa among the first four states to end their participation in the federal programs. Tens of thousands of jobless Iowans were receiving a total of more than $30 million a week through the three discontinued programs. Iowa business groups and Republican politicians applauded the move, saying the extra unemployment benefits were holding back the economy by keeping people out of the workforce.

Kolko regularly tracks online job searches and found last month that “job search activity on Indeed increased, relative to the national trend, in states that announced they would end federal UI benefits prematurely.” However, “This increase was temporary, vanishing by the eighth day after the announcement. In the second week after the announcement, the state’s share of national clicks was no higher than it was during the late-April baseline.”

Kolko wrote on June 22 (emphasis added),

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An open letter to Governor Kim Reynolds

This post first appeared on Laura Crossett’s website The New Rambler. -promoted by Laura Belin

Dear Governor Reynolds:

It is my understanding that you have decided to discontinue additional federal unemployment payments to Iowans who lost their jobs due to the COVID-19 pandemic because you want people to get back to work. As one of those Iowans, I’m writing to you because I would very much like to go back to work, but I’m having some difficulty figuring out how I might do so.

I have a child who suffers from significant mental illness. As I know both mental health services and child care are interests of yours, I thought perhaps you might have some advice.

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Five terrible bills Iowa Republicans didn't pass in 2021

The Iowa House and Senate adjourned late in the evening on May 19 after finishing most of their work for this year. (Lawmakers will almost certainly come back for a special session to consider new maps of Iowa’s legislative and Congressional districts.)

In the coming days, Bleeding Heartland will closely examine several bills that passed in the late session rush. For now, I want to review the legislation that by some minor miracle didn’t make it to Governor Kim Reynolds’ desk, in spite of support from powerful interests.

All of these bills are likely to return in some form during the 2022 session, so don’t celebrate too soon. House Republicans were unable to pass a “water quality” bill backed by agricultural groups in 2017. But the Iowa Farm Bureau and its allies spent the interim chipping away at the GOP holdouts. The bill sailed through the House early in the 2018 session. The same scenario could play out with any of the proposals discussed below.

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