Iowa’s state unemployment rate rises to 4 percent, first time since October 2020

The unemployment rate has been rising since the start of 2021, as Iowa Workforce Development reports 70,000 jobs on the board.


Larry Phan

A sign reads “Now Hiring” in downtown Iowa City on Friday, July 23.

Meg Doster, News Reporter

Iowa’s unemployment rate now sits at 4 percent, according to the Iowa Workforce Development, up from the 3.9 percent reported in May.

The last time the state’s unemployment rate reached or exceeded 4 percent was Oct. 2020, when it was listed at 4.2 percent.

The unemployment rate steadily decreased from its high of 11 percent in April 2020, but from January to July of this year, the number is once again climbing.

Iowa’s Paycheck Protection Program funds ran out in May.

The program provided forgivable loans to eligible businesses so business owners could maintain their staff through the pandemic.

“It must be stated that during the pandemic we had plenty of employers clamoring for help,” Iowa Workforce Development Deputy Director Ryan West said. “I don’t want to negate that at all as employers were certainly needing help during the pandemic as well, but it’s as we started coming out of this it just feels different than we were last July.”

The Iowa Workforce Development helps people and workplaces seek employment and employees. Despite the unemployment rate rising, the Iowa Workforce Development website states that it has 70,000 jobs on the board and believes the unemployment rate shouldn’t affect the chances of someone obtaining a job.

According to the U.S. Bureau of Labor Statistics, Iowa has the 12th highest unemployment rate compared to other states.

“We have lots of jobs, obviously right now,” Iowa Workforce Development District Manager Linda Rouse said. “We have employers hiring from all industries. So again, I think it depends on what that job seeker is looking for.”

In March 2020, when the World Health Organization declared the spread of COVID-19 a pandemic, the unemployment rate for the United States was 4.4 percent, while the rate for Iowa in March 2020 was 2.9 percent.

Johnson County has a higher unemployment rate than the state as a whole, sitting at 4.4 percent, which is lower than some other districts. Des Moines’s unemployment rate is 6.8 percent, and the lowest rate of unemployment in the state is in Lyon County at 2.3 percent.

“I think the issue is that we are in a flux period right now, where we had complete adjustments in how we work,” Rep. Bobby Kaufmann, R-Wilton, said.

Kaufmann said while Iowa’s economy isn’t ideal, it’s nothing to be worried about. He said he believes that because the economy has gone through an upheaval as a result of the pandemic, it’s only natural that the unemployment rate would vary.

“You’re going to have an adjustment period. We’re in it right now, where employers and employees are adjusting to the new normal,” Kaufmann said. “I think, in my opinion, we absolutely will correct back to among the lowest unemployment [rate] in the entire country.”

Kaufmann said that there are plenty of jobs and that the Iowa economy is not going to crash and burn.

“To anybody that says they can’t get a job that wants one, why? I can tell you, in my district, I’ve got an employer right now that I can dial up, and you can have a $20 an hour job with benefits ready for anybody for very little training tomorrow… it’s time to get back in the workforce,” Kaufmann said.

Rep. Ras Smith, D-Waterloo, said he believes the unemployment rate doesn’t seem to be caused by a lack of opportunity, rather a lack of quality.

He said a person can get a job no problem, but if that job offers too low of wages or does not provide benefits that an employee deems adequate, they will choose to stay on unemployment.

As a state, he said Iowa is not doing enough to incentivize and protect workers. Iowa’s minimum wage has been $7.25 since 2008.

“I think part of it is the wages. We have to ensure that the people are being paid a wage in which they feel as though they can work,” Smith said. “I think we have to be more innovative, there are examples of employers here that are doing everything they can to cut the red tape for employment.”

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Chase Van Landen, who worked for Pullman Bar and Diner in Iowa City from August 2019 to August 2020, said he left his job at the restaurant when he was offered a new job at a law firm.

“Were we paid well enough salary-wise? Probably not, because, I think shift employees make something like $4.35 an hour at Pullman or elsewhere,” he said.

He said during his time working at Pullman, it was always busy and management was frequently trying to find new employees and offer them advanced payment in order to incentivize them to work.

Van Landen said he had financial support from his family when it came to his schooling at the University of Iowa, but his wages at Pullman were all he had to live off.

“Over the pandemic, I was kind of on COVID unemployment,” Van Landen said. “Since that, I’ve had support from my family for school, but otherwise I support myself, even if I haven’t been working.”

Iowa’s Paycheck Protection Program budget ended on May 31. The Paycheck Protection Program was given to businesses to help them afford to keep their employees during COVID-19.

Kaufmann said the government shouldn’t be involved at all, and any further interference will only make it harder to go back to pre-pandemic normal.

“PPP was designed to help business owners stay afloat. Now that the economy’s back up, it entails that a lot of individuals and groups are up,” Kaufmann said. “There’s gonna be that natural adjustment of relying on your own revenue as opposed to government revenue.”

Smith said the state government isn’t doing enough to lower the unemployment rate.

“The unemployment rate is alarming, but it lets us know what work we need to do,” Smith said.