Univ. of Iowa professor: Labor shortage due to lack of participation

CEDAR RAPIDS, Iowa (KCRG) - Since the pandemic, Iowa has seen worker shortages and lawmakers have been targeting the issue with different proposals and plans.

Ahead of the 2023 legislative session, Democratic State Senator Molly Donahue said, “Until we start changing what we’re doing in Iowa, we are going to continue to see the drain of the workforce.”

However, according to an Assistant Professor of Economics at the University of Iowa, there is a shortage, but the overall picture right now isn’t dire.

“If you look at it in general, employment rates in Iowa are high and they’re higher than they are in lots of other states, so in that sense there’s not an employment shortage,” said Harrington.

The labor participation rate in Iowa is now 67.7%, still lower than before the pandemic. In Jan 2020, it was 70%.

Harrington said that rate could increase with the right incentives.

“From the firm’s perspective, it’s a bummer to have to raise wages, but raising wages is also a way to potentially not have it be a ‘shortage’ anymore,” said Harrington.

She added the economy we’re currently living in is just unusual.

“There’s a seeming circumstance where it’s both hard for employers to find workers and hard for workers to find employers,” said Harrington.

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