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By Lyle Muller May 12, 2021

Low unemployment in Iowa after the pandemic

If Your Time is short

  • Iowa will drop in June the federal portion of unemployment benefits related to COVID-19 that out-of-work residents had received.
  • Republican Gov. Kim Reynolds says the added federal money takes away the incentive for some to get paying jobs, while Democrats say jobs need to pay more.
  • Despite layoffs and job cuts during the COVID-19 pandemic, Iowa has more job openings than the number of people taking unemployment.

Democrats were quick to criticize Iowa’s Republican Gov. Kim Reynolds when Reynolds announced on Tuesday, May 11, that the state will stop taking federal funds for supplemental $300 payments to Iowans receiving unemployment benefits. The shift away from that COVID-19-related federal aid program, which means an end to the payment to out-of-work Iowans, is to take effect after June 12, 2021.

The announcement came one day after an Iowa Workforce Development memorandum that said Iowa has a workforce shortage, which led Rep. Lindsey James (D-Dubuque) to state on Twitter:

"There are more job openings than there are people on unemployment. Let’s name the real problem here – Iowa needs higher wages. #ialegis"

More available jobs than people on unemployment to fill them? Yes, that is what the Iowa Workforce Development report, from director Beth Townsend to Reynolds, states. Iowa had 60,900 unemployed workers in March for a 3.7 percent unemployment rate, that report stated, relying on U.S. Bureau of Labor Statistics data

More than 66,000 job openings showed up on the IowaWORKS website on May 10, Townsend wrote in the memorandum. 

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"Claims, continued and initial, continue to trend down," Townsend’s memorandum stated.

"Terminating the federal unemployment programs will not affect individuals eligible for regular state unemployment insurance claim benefits."

Republicans, backed by business owners and trade groups, have argued that employers are having difficulty attracting workers in Iowa because of the jobless benefits money those prospective workers are receiving. "The overwhelming message we receive from employers these days is the lack of workforce that is adversely affecting their ability to recover from the pandemic," Townsend said in a statement released by the governor’s office. 

Democrats, like James, counter that employers need to offer higher wages. "Iowa had a labor shortage pre-COVID and it has continued now that we are recovering from COVID," James wrote in an email to PolitiFact Iowa. Moreover, she wrote, Iowa has more job openings that aren’t on the IowaWORKS website.

Registered nursing jobs are most in demand in Iowa, the IowaWORKS website shows, but those jobs require special training and are an example of job requirements and pay disparity that exists. Other jobs, such as wait staff that Iowa restaurant owners told The Gazette newspaper in Eastern Iowa they need, don’t require the specialized college education a registered nursing job needs. Wait staff starting pay is around $8.45 an hour, far less than the $23.84 an hour entry pay for registered nurses in Iowa, state wage data show.

Our ruling

After hearing about pandemic-related layoffs and job cuts the past year, seeing that more people are seeking jobs in Iowa than are taking unemployment benefits might surprise some. But the numbers back it up and both sides of the argument on what Iowa should do about unemployment benefits do not dispute it. We are confining our rating to the numbers and rate the claim to be True.

Our Sources

Gov. Kim Reynolds news release, May 11, 2021

Lindsey James, Twitter, May 11, 2021

Email exchange with Lindsey James

Memorandum, Iowa Workforce Development Director Beth Townsend to Gov. Kim Reynolds, May 10, 2021

U.S. Bureau of Labor statistics for Iowa, March 2021

"Iowa Wage Report," Iowa Workforce Development

"Iowa to stop offering federal unemployment benefits next month," by John Steppe, The Gazette (Cedar Rapids, IA), May 11, 2021

"Iowa Gov. Kim Reynolds announces cut to federal unemployment benefits, citing need to boost economy, by Tyler Jett, Des Moines Register, May 11, 2021

"Diners are returning, but restaurant staffers aren’t," by Elijah Decious and John Streppe, The Gazette (Cedar Rapids, IA), May 10, 2021

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Low unemployment in Iowa after the pandemic

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