The Truth about Iowa Unemployment

Statement by Senator Herman C. Quirmbach, D-Ames:

“The headline today from the Reynolds administration of 4.7% unemployment in Iowa wildly underrepresents the dire current unemployment situation in Iowa.  A truer unemployment number would be 12.3%.

“What the Iowa Workforce Development press release says up top is that there were 76,600 unemployed Iowans this September.  That is up from 48,700 unemployed in September a year ago.  That is a 57. 3% increase in the number of unemployed in just 12 months.  That would be bad enough, but the full story is much worse.

“Only in the fine print at the bottom of the news release do you get the full picture.  In addition to the 76,600 unemployed workers, there are another 138,400 Iowans who have left the labor force in the last 12 months.  If all those people were also still looking for jobs, the unemployment rate would be 12.3%.

“Here’s how people quitting looking skews the unemployment number.  The way unemployment is calculated is a little strange.  If you lost your job and are looking for a new one, you are counted as unemployed.  However, if you lost your job and have gotten so discouraged about your prospects that you have given up even looking, you are no longer counted as unemployed.  Indeed, you aren’t even counted as being in the labor force!  You’re called a ‘discouraged worker’ and become invisible to IWD when it computes the unemployment rate.

“During the year, there is always some degree of churn in the labor force.  Older folks retire.  Young folks get out of school and look for a first job.  New parents leave and then reenter the labor force around the period when their kids are young.  People move in and out of the state.

“But a loss of 138,400 workers is not normal churn.  That’s a loss of nearly 8% of the workforce—not quite 1 of every 12 workers—in just 12 months!  If job prospects were better, most of them would still be at least looking.

“The Iowa economy will not recover until we crush the coronavirus.  And that won’t happen until we get serious about masks, widespread testing, and contact tracing.   Instead Governor Reynolds obstinately refuses to follow the White House Coronavirus Task Force recommendation to mandate masks.  With COVID-19 cases surging—nearly 7,700 in the last week, per the New York Times—contact tracing is unmanageable, even if Iowa were seriously trying, which we are not. 

“Until the Reynolds administration is willing to commit to a serious effort to end the pandemic, Iowa businesses, Iowa consumers, and Iowa workers will continue to suffer.  No amount of rosy press releases and misleading claims will do the trick.”


Senator Quirmbach holds a Ph.D. in Economics from Princeton and taught as an economics professor at ISU for 29 years.