Atlantic Magazine: Low Unemployment Raises Wages in Iowa

The tight labor-market in Iowa is delivering higher wages, better working conditions and more training programs to employees in Iowa, where unemployment has dropped to roughly 4 percent, according to a report in Atlantic magazine.

“The low unemployment rate has slowly but surely tipped the balance of power away from employers and towards workers,” says the article, which continues:

Competition for workers has gone crazy, Joe McConville, who co-owns a popular chain of made-from-scratch pizza restaurants, told me. “At almost every restaurant that I’ve worked at, you always had a stack of applications waiting,” he said. “You’d call somebody up and half the time they’re still looking for an extra job. That’s not happening anymore.” He said he faced a “black hole” in terms of finding more experienced twenty-something employees, and that to compete he has paid out higher wages and added vacation days.

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 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.

Overall, Iowa “ranks eighth in nationwide wage growth from 2007 to 2017, according to a recently released national data analysis,” says an April report in the Des Moines Register.  It added:

Iowans have seen a weekly wage increase of $189, or 27.5 percent, over the past decade. That rate is higher than 42 other states, according to a study completed by Policygenius, an online insurance sales company out of New York.

However, the Atlantic article also notes that companies are fighting wage raises, and also that overall wages are too low for single parents to gain from jobs while also paying for daycare. “Companies have shown a remarkable unwillingness to boost wages, with [wage] growth barely keeping pace with inflation,” said the Atlantic report.

Similar corporate opposition to wage raises is visible nationwide, as most white-collar and blue-collar wages are barely growing amid record unemployment and the widespread implementation of $15 minimum-wage laws.

The Atlantic article, however, fails to mention the fundamental importance of President Donald Trump’s “Hire American” policies. Those policies have helped Americans by blocking companies from importing yet more replacement workers via illegal immigration, or via the various federal refugee, asylum, legal immigration and visa-worker programs. For example, Trump has blocked several proposed amnesties for at least 2 million ‘DACA’ illegals, sharply reduced the arrival of refugees, and minimized the expansion of the H-2B program.

The article’s failure to mention the supply side of the labor market is understandable because the magazine is owned by a pro-migration advocate, Laurene Powell Jobs. She is the widow of Steve Jobs, the founder of Apple, and is worth perhaps $20 billion. She has launched a campaign to boost immigration and hired the immigration manager at the elite-left Center for American Progress to help import more poor people into the United States, despite the negative impact on ordinary Americans.

Nationally, the first beneficiaries from Trump’s tightening labor-market have been new hires and employees in high-turnover jobs, such as Latino restaurant workers in Monterey, warehouse workers, Calif., resort workers in Hilton Head, construction workers, meatpackers, and Superbowl workers, and workers at small businesses. The benefits are also going to formerly sidelined workers, such as African-American bakers in Chicago, disabled people nationwide, high schoolers, and interns,

These factor help ensure that blue-collar workers are gaining more than white-collar workers, whose salary growth is lagging behind blue-collar wages, according to the Conference Board’s June 2018 estimate.

But long-term, high-skill workers — including Warren Buffett’s railroad workers — will gain if the “Hire American” pressure spreads throughout the economy. The large core group of stable employees has already gained from the tax cuts and may see their wage gains accelerate during the rest of 2018 even as inflation rises above 2 percent — if investors and CEOs give up hope of getting more foreign workers into the labor market.

The Washington-imposed economic policy of economic growth via immigration shifts wealth from young people towards older people by flooding the market with cheap foreign labor. That process spikes profits and Wall Street values by cutting salaries for manual and skilled labor offered by blue-collar and white-collar employees. The policy also drives up real estate prices, widens wealth-gaps, reduces high-tech investment, increases state and local tax burdens, hurts kids’ schools and college education, pushes Americans away from high-tech careers, and sidelines at least 5 million marginalized Americans and their families, including many who are now struggling with opioid addictions.

Democrats want more immigrants because they expect the immigrants will vote for big-government progressive policies. Business groups — including those with close ties to the GOP — want more immigration because it helps investors by cutting wages, boosting consumption, and spiking real-estate prices. In practice, the federal government’s immigration policy inflates the supply of labor — and so reduces the cost of labor — to help boost company sales and investors’ returns.