AMES, Iowa – Job growth in the retail and service sector has not matched the wages of manufacturing and other middle-skill level jobs lost over the past decade in Iowa. The difference has contributed to a growing disparity between low and high income households, which is especially profound in specific parts of the state, according to a new report by Iowa State University Extension and Outreach rural sociologist David Peters.
Inequality in Iowa is below the national average, but the rate of polarization has outpaced the national level. Peters analyzed 40 years of data from the U.S. Census Bureau to identify trends in income distribution and the potential impact on Iowa. During that time frame, inequality grew faster in metropolitan areas and smaller cities, which is largely driven by growth in low-wage service positions in contrast to high-end professional and financial service jobs.
“The bottom earners have really taken a hit, especially since the last recession, and that’s what is driving inequality,” Peters said. “The wage replacement for people who are laid off from middle-skilled, middle-wage jobs is much lower. They’re not able to recoup those wages and that’s where you see falling incomes.”
According to the report, Income polarization tends to be spatially clustered in four main areas of the state.
First, inequality is highest in north-central Iowa. This includes rural agricultural counties of Emmet, Kossuth, and O’Brien; natural amenity areas including Spirit Lake and the other Iowa Great Lakes; and the micropolitan centers of Fort Dodge, Mason City, and Spencer. The second cluster is in university towns of Ames and Iowa City, where lower income college students and higher income professionals live. Third, another rural inequality cluster is located in southwest Adams, Decatur, and Montgomery counties. Lastly, inequality is prevalent in southeast Iowa communities that are home to smaller colleges and correctional centers (especially Burlington, Fairfield, Mount Pleasant, and Ottumwa). By contrast, economic disparities are very low in the northeast part of the Hawkeye State.
Income distributions had been relatively equal in Iowa in the past. The shift to more extreme highs and lows could bring negative consequences unless policymakers take action, Peters said. Attracting high-skilled and high-wage jobs to the state is important, but middle-skilled and middle-wage positions are just as critical. Peters said state leaders should utilize tax and economic incentives to recruit employers to fill that gap.
“Anything policymakers can do to increase wages, incomes and job opportunities, for low-to-moderate-income workers, is really going to help minimize inequality,” Peters said. “It’s not building new retail, it’s recruiting jobs that pay a decent wage and have some benefits, and that target middle-skilled workers.”
There is also a cultural impact associated with the loss of middle-level jobs. Iowa is still a great place of economic mobility, but less than it was in the past, Peters said. Today, there are fewer quality jobs for workers with only a high school education or some type of technical training. If this trend continues, it can lead to greater inequality and poverty. Peters said ultimately that affects the culture and work ethic in Iowa and the belief that with hard work you can get ahead.
“Where inequality really matters is when social mobility slows down. It can create a culture of not wanting to move ahead that affects career aspirations,” Peters said. “In Iowa it’s a fairly big cultural change to have extremes of wealth and it’s hard to know the implications. If we follow the trend of the rest of the country, we’re going to see more private schools, unwillingness to invest in public education, and more residential housing segregation by income.”
As part of the state’s job creation efforts, Peters recommends changes to the income and capital gains tax structure to pay for incentives to grow middle-skill, middle-wage jobs. He said the state also needs to invest in quality education that is accountable for student outcomes and provides tangible skills in the labor market.
I hope you’re not using the top photo as an example of the poor in Mason City. Start paying attention to the faces of the people you see panhandling at those intersections. They come back year after year. Panhandling is a career choice for them. They head north in the summer and back to the warmer climes for winter.
So, you have a PHD in demographics and the migration patterns of hobos, now? Bottom line, these folks are broke as a joke in Bookmeyersville, USA, just like a huge section of the populace here that live at or below the poverty line, take free or reduced price meals in the schools, line up at the food bank, rent the slums, the list goes on. Thrill me with more of your pontifications, please.
I’m only referring to that particular photograph. There are obviously poor and homeless in Mason City. That photograph is not representative of them. Like I said, when you start seeing the same faces year after year (dogs included) it’s a career choice, not poverty.
I’ve seen people take shifts at some intersections – generally along the interstate. Vans pick them up and drop them off. It’s very common in some of the more populous states. Iowa is not immune.
I stand by what I wrote.
OOps=Meant “head” of course. Anyone who knows Anonymous knows what I mean.
We do have a lot of social welfare programs in Mason City that draw people that don’t have much income from other areas. Maybe this is helping our stats?
Which programs are you referring to that are only local to our area? Most of these are federally funded, and the others state-wide. Our population also has declined over the years, so we aren’t drawing many people here–but I would agree that the ones who do end up here tend to be of a lower socio-economic class. Like attracts like.
Not all communities choose to go after money available (federal or state money). A couple that come to mind are the number of homeless shelters here (many communities don’t have any) and access to regular meals (day and eve) at the community kitchen. When reports like this appear I wish they would tell us the facts they are based on instead of people assuming what the causes are. It would be more helpful.
This is just the way Drunkmeyer and his croneys want it. The businessmen in the Chamber of Commerce are all about keeping the working man’s wages down and Bookie does whatever they want.
It’s all over the country median income is down everywhere. Vote the liberals OUT !!!
HOpe that poor excuse of a Mayor bookmeyer sees this.
this is exactly what he is working hard to do. keeping the low income, hard working people down. So his rich friends can profit off the sweat of others. This is no difference that modern day slavery. Keeping the low income down so they have nothing to look for other than a minimum wage job. Who gets city money in MC? who got rid on The HRC? Who doesnt have to repair their rental properties, While vets get their house torn down. think about it. MODERN DAY SLAVERY.
Keep the voters disconnected and hopeless, organize the “elite”, pay off the elephant man at the newspaper and humpty dumpty on the radio … you can elect anyone that way. Mountains of proof show this is the state of affairs here and elsewhere, and the people are out of the game, all according to plan. Expect more jobs that pay $9.50 and more huge breaks for the super rich (i.e. Starbucks).
@Matt-I don’t do Starbucks either. Damn coffee taste like mop water and is full of calories and carbs. Only the yuppy’s and wannabe yuppy’s will drink that crap.
I think after Starbucks opens, it will be busy for months. Then, it will peter out ever so slowly. That’s the eat/drink cycle here in MC for almost all new establishments. The Brewery would be an exception to that rule, and they work hard/smart to keep that going in the right direction. Starbucks will go on auto pilot eventually and Seattle will wish it never opened that store.
most voter are disconnected by their own choice. Whose fault is it they know more about what TMZ reports than what their Congressman is doing?
Matt, this is why I eternally have skepticism and doubts about so-called “conservative” Republicans. Their aim always seems to be elevation at the expense of others, and downright slavery and servitude of others, so they and their families can enjoy a good life and be served by others. It’s an unrecognized disease, and should be placed in the DSM-6. Some false democrats also succumb to this disease as well.
@Philly-It sure sounds like you are talking about union workers when you talk about self serving at other people’s expense. Look at what the public unions are doing to the Iowa taxpayers.
LVS, anymore I dread using the words conservative Republicans to describe this self-serving phenomena, since many Democrats enjoy the same type of daydream and lifestyle. Both cuts of meat are bad in my opinion anymore, since welfare programs are so misguided, it’s near as abominable (but not quite) as a Republican trying to profit off of war or junkfood. I don’t even trust Libertarians. Everyone in some way is living off of welfare, and the only true way out is thru homesteading
You cannot just “cut welfare”, because we all damn well know the system isn’t set up for that. Crime rates would go thru the roof, and the prison industrial complex would grow exponentially. You cannot strip an animal of its natural “god given” habitat, and expect it to function normally or gracefully. A new paradigm and hope is upon us, and I’m embracing it wholeheartedly…thrusting my entire soul and person into its design. The Earthship Biotecture Culture has arrived.
LVS: certain utilities, like power and rail, have come to be held in the public trust, deemed too important to the vitality and stability of the Union. Had Edison won out against Tesla (giving us DC power grid), homes would have been better equipped for eventual self-power. Instead the entire Nation is as reliant as a suckling child. Citizens have come to subsidize certain facets of society because they deem them “too important to fail”. Unions of Railroads fell within this.
@Philly-I only disagree with your homesteading comment. The rest I don’t have much of a problem with. Public Unions are the state, county and city workers who think the taxpayers owe them a living. They are not all that skilled and can easily be replaced.
@Philly-Damn, I can’t believe I forgot my biggest pet peeve other than the railroads blocking our streets that we pay for and blowing their damn horns all night long, the school system’s of course. best part time jobs in the world with the most overpaid administrator’s anywhere. All on the backs of the taxpayer’s.
Call Hickey and ask him about his quiet zones. Boy, that worked great.
I can see your point. I’m a down-the-middle Independent. Can’t stand either party. I don’t trust either side unless I know the candidate. Too many blunders over the years, too much corruption, too much blind sheeple-ism in this country. For example, the straight-party-line voting. Just making people more lazy and locked-in to the destructive two-party system.
Given that a decent desktop computer anymore can be had for less than $500 and high speed DSL can theoretically be laid anywhere in America, I support a home based school system where children are delivered lessons via internet computer with occasional in-person tests administered. It would place less a burden on transportation to and fro school, cut down or eliminate bullying, and allow families more integrity, while allowing children to work from home on gardening and homesteading
@Matt-I have called Hickey many times and sent him e-mails many times. He just ignore’s them and does what his leader tells him to do. He is full of hot air among other things.