This morning, the Labor Department announced that the national unemployment rate ticked up to 4 percent in June for good reasons, as hundreds of thousands more Americans sought work. For the first time in recorded history, the number of job openings is higher than the number of people looking for a job. That has raised hopes that wage growth might finally begin to pick up, with employers bidding more to attract new workers and offering raises to retain their existing staff.
Full employment — that magical economic state, in which everyone who wants work has it, and at a good wage too — finally seems to be near. In much of Iowa, it already is. Out of every 100 people who want a job, 98 or 99 have one. The rate of wage growth has doubled of late, and businesses are scrambling to find workers. “It does feel like things are a little different in the last year,” Elisabeth Buck, the president of the United Way of Central Iowa, told me. “Businesses are getting a little desperate.”
In that, Des Moines and the surrounding area stand as an example of what might be coming for the national economy, both good and bad. Full employment has a remarkable way of improving the lives of low-wage workers and drawing new individuals into the labor force. But it also exposes the scars that even a very hot economy is unable to heal.
More than that, Iowa’s tight labor market has forced employers to offer training, reach out to new populations of workers, and accept applications from workers they might not have before — expanding and up-skilling the labor pool as a whole as a result. “Their attitude really seems to be changing,” said Soneeta Mangra-Dutcher of Central Iowa Works, a workforce-development nonprofit. “They are looking at populations differently, who they they should be looking at when they have jobs to fill, or people being screened out for things that really don’t have an effect on the job.”
Among those seeing more success getting hired are the formerly incarcerated. When the jobless rate is high, most businesses refuse to look at applications from individuals who have spent time in prison — even for non-violent offenses, or for incidents that might have occurred years and years earlier. That was what Clifford Salmond found after being released a few years ago. “I couldn’t find a decent job because of my background and my past. I’ve had alcohol problems, drug problems, incarceration problems,” he told me while he ate breakfast at a local McDonald’s. “Once I got that behind me, I still found finding employment pretty hard.” He found work washing dishes, but became unemployed again after the restaurant he was working at closed down.
But his daughter connected him with a training program, which he completed. In time, that led to a position at a factory in Des Moines. “I take the raw rubber and I break it down,” he explained. “I send it over to be [combined] in a machine with fabric. That leaves the machine, and goes to the tire builders, and they build the tire.” He said the work was hot, dirty, and physically exhausting, but still that he loved the job, where he now earns $21 an hour, as well as health benefits.
Younger workers with more or harder barriers to the workforce were finding more luck, too. “What I’ve seen in the past two years is employers really forcing — and I really mean it when I use that word — forcing themselves to be more nimble,” said Laurie Phelan, who heads Iowa Jobs for America’s Graduates, or iJAG. It is an initiative that seeks to prevent drop-outs and help students transition to work, aimed at kids who have grown up in poverty. She said businesses were more willing “to grow their diversity IQ, and to look at their expectations for education and their willingness to spend time in mentoring and shepherding this new young workforce into their world.”
Refugee and immigrant workers — including those with literacy or language challenges, or a lack of credentials — were also getting drawn in and picked up. “A little over a year ago, I hired a woman that focuses on this kind of high-touch service,” Bontrager told me. “She has 40-some clients we’re working with, specifically on helping them work through some of their barriers, whether that’s going back and recertifying in something [here in the United States], or working on the language skills, or working on how to present themselves — their resumes, how to interview. All of those kinds of things. Companies are really being very receptive to taking a little more time, if you will, in the hiring process.”
The fierce competition for hiring has led to both a drop in the unemployment rate and a rebound in the prime-age employment-to-population ratio in Iowa. It has also raised the specter of labor shortages, with businesses simply unable to find experienced workers to fill their positions. “There are not a lot of welders sitting around looking for work. The construction trades, the roofers, the framers, the dry-wallers,” said Dan Culhane, the president of the Ames Chamber of Commerce. “Those are [workforce] challenges that Ames and Story County and Des Moines face.”
Low wages continue to be an extraordinary problem preventing workers from connecting with a good job and keeping potential employees on the sidelines — in Iowa and across the country. “Even though we’re such a low unemployment state, we are also low-wage state,” Buck of the United Way said. “People think that when you have a state or a community that has low unemployment, that everyone’s doing great. That is not the case. We still have about 34 percent of central Iowans who are not making enough to be financially self-sufficient.”
VIDEO: CNN Blown Away by the Amount of Jobs Being Created: “Really a great situation here”
CNN praises Trump economy: “Another strong month for job creation… It’s really a great situation.” pic.twitter.com/9nPvRRsnVP
— Kyle Morris (@RealKyleMorris) July 6, 2018
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