Des Moines Register
01-07-07
More jobs lift outlook for 3 cities
Winners: Dubuque, Des Moines, Iowa City see rapid growth since 2000
Losers: Cedar Rapids and Sioux City struggle to recover from recession
By DONNELLE ELLER
REGISTER BUSINESS WRITER
The race for jobs in Iowa has some surprising winners and losers, state jobs
statistics show.
Consider Iowa's changing jobs landscape:
- Rapid growth: Dubuque outpaced Des Moines and Davenport in the percentage
of new job growth since 2003. The three cities led the state in percentage growth.
Iowa City led in job growth since 2000, adding 8,200 positions, a 10.4 percent
increase. Des Moines and Dubuque rounded out the top three.
- Trailing: Cedar Rapids and Sioux City have struggled to rebound from the 2000
recession that hammered those cities' telecommunications industries. The cities
each posted about a 1 percent jobs gain in the past three years, but are still
below employment levels of six years ago.
- Rural vs. urban: Iowa cities gained a total of 34,160 jobs in the past six years.
But overall, the state added 26,900 jobs, meaning rural towns and areas lost
7,260 jobs from 2000 to 2006.
- Central Iowa sponge: The Des Moines metro area added an astounding 22,600
jobs - about two-thirds of all growth in Iowa cities since 2000. Most - 20,800 have been added in the past three years with growth of insurance and financial
services companies like Wells Fargo & Co. and Allied-Nationwide.
- Uneven rural growth: Fifty-one mostly rural counties posted job losses since
2000 - nine of which were 10 percent or more - while 28 counties saw jobs
increase. Three had growth that was 10 percent or more.
"The state of Iowa isn't recovering as rapidly as the rest of the nation," said
David Swenson, an economic scientist at Iowa State University. "We've got
some areas in the state that are looking really good, but when you add it all
together, we don't look so hot."
Jobs in the United States grew 2.6 percent since 2000, while Iowa jobs grew at
1.8 percent. In the past three years, though, Iowa employment grew 4.5 percent,
slightly outpacing national growth at 4 percent.
"There's been a very, very strong realignment of industrial and other job growth
in our urban areas," Swenson said. "You see a consolidation of job opportunities,
growth and people in our largest trade centers."
The trend, he said, began decades ago.
Tina Hoffman, spokeswoman for the Iowa Department of Economic
Development, said about half of the 400 projects the state has helped with
incentives are in rural areas. "The board has approved projects in every corner of
the state," she said.
The companies pledged to invest about $8 billion in new plants, offices and
equipment and to create or retain about 31,400 jobs. As of July, the state said
nearly 11,000 jobs were in place. Hoffman said many more will be added as
companies build plants and offices for new workers.
Leaders in cities like Iowa City and Dubuque say they've seen strong growth from
several existing companies as well as some new ones.
"We're focused on retention. The jobs come from the businesses that are already
here," said Rick Dickinson, director of the Greater Dubuque Development Corp.
"We're not chasing smokestacks. It's a fool's game."
Joe Raso, president of the Iowa City Area Development Group, said the
University of Iowa - and businesses based on testing and continuing learning
built up around it - helped provide stable growth.
But the metro area also has seen growth in manufacturing - high-tech companies
like Integrated DNA and personal products like Proctor & Gamble. "Whether
you're in a recession or growing, people are always going to need shampoo,"
Raso said.
Harvey Siegelman, former state economist, said long-time meatpacking cities like
Dubuque and Cedar Falls-Waterloo have successfully redefined their economies.
Cedar Falls-Waterloo added 3,400 jobs since 2000, a 4 percent increase - many
in distribution and transportation. "You can see a real renaissance."
David Osterberg, executive director of the Iowa Policy Project, said he's
concerned about the quality of new jobs being created - especially in rural Iowa,
where salary requirements are often lower than urban areas - under the Grow
Iowa Values Fund. Pay requirements are based on existing salaries.
"We don't think the jobs are good enough for as much money has been provided
in incentives," Osterberg said. He pointed to a Policy Project study that showed
new jobs failed to adequately replace those that are being lost.
The report said the sectors adding jobs between 2000 and 2005 paid an average
of $33,000 annually with about half offering health care insurance. Sectors losing
jobs in that time paid about $37,000 annually with about 65 percent providing
health care.
"Iowa needs to do what it does best - invest in infrastructure that businesses
need, like roads, universities, K-12 schools - areas we've underfunded for the
past six years," Osterberg said.
Craig Lang, president of the Iowa Farm Bureau, said Iowa needs its towns and
rural areas to grow as well as its cities.
Last year, the farm advocacy group created an economic development program Renew Rural Iowa - that focuses on adding jobs in cities and counties with less
than 30,000 residents. The group already has accumulated $12.5 million including $5 million of its own money - to invest in rural development.
Lang said rural Iowa is a significant piece of the state's culture as well as its
economy, which is growing with renewable energy development.
Iowa, the No. 1 producer of ethanol, manufactured 1.6 billion gallons in 2006.
And Iowa farmers - about 70 percent of whom work second jobs - received nearly
$16 billion in cash receipts for commodities like corn and soybeans and exported
about $3.7 billion of goods in 2004.
Lang said if Renew Rural Iowa helps the state's 5,000 small manufacturers add
10 jobs each, that will create 50,000 jobs in rural Iowa. "By adding jobs, you add
wealth and that helps everybody," said Lang. "You can't have a strong hub
without strong spokes to support it."
Reporter Donnelle Eller can be reached at (515) 284-8457 or deller@dmreg.com
Faithful workers sway decision
Jim Theisen needed a new distribution center to keep his 16 Theisen Supply
stores filled with lawn, farm and pet products. He considered building the $4
million center in the Iowa City-Cedar Rapids corridor instead of Dubuque, where
the company has been located for nearly 80 years.
Then Theisen worried that locating the 120,000-square-foot building farther west
would mean losing hundreds of years of employee experience.
"This is home. Our people have been with us for years. ... They're the reason
we're here," said Theisen, whose sons, Chris and Tony, will become the third
generation to lead the family business.
Add Theisen to expansions at companies like McGraw Hill, Deere & Co.,
Dubuque Screw, Giese Manufacturing and others and it becomes clearer why
Dubuque led the state in percentage job growth from 2003 to 2006.
Economy.com said Dubuque ranked 22nd in the nation for job growth from 2005
to 2006. Des Moines ranked 115th, according to the consulting group.
Rick Dickinson, director of the Greater Dubuque Development Corp., said
leaders closely track business needs, which can vary from consolidation to
suppliers and transportation.
Dubuque still works on recruitment, but attracting new business is less of a
priority than keeping existing ones. "We've stopped chasing our tail. We don't
want to be one of 15,000 economic development groups calling on 300 to 500
companies," said Dickinson.
"We're paying attention to the businesses that are here."
Firm likes Iowa opportunities
David North, chief executive of Sedgwick CMS, said his company is interested in
locating claims management operations in rural Iowa after deciding to build an
office in Dubuque.
The company manages claims from companies that provide their own workers
compensation and liability coverage. Clients include General Motors, FedEx,
Sears and Wal-Mart.
North said Dubuque topped the list after the fast-growing Tennessee-based
company evaluated issues such as worker education and work ethic, health-care
costs and other business factors. It planned to construct a $3.15 million building
and to hire 100 workers. The jobs pay an average of $34,530 annually.
Operating seven months in temporary offices, the company already has pushed
hiring up to about 130 workers and plans to expand its building, which is under
construction.
North said the company plans to continue growing in Dubuque and to look at
other Iowa cities for expansion - especially rural towns.
"Lower cost is a consideration, but more importantly, we need worker
characteristics that attract new customers and retain current customers," said
North. "What we do is deliver service at a time when our clients' customers or
workers need help the most."
Companies pledge farm ideas
Expect Cedar Rapids' jobs numbers to look better and better over the next
couple of years, says Mark Seckman, president of Priority One, the city's
economic development group.
That's when jobs from expansions at companies like Archer-Daniels-Midland,
Penford Products and Aga Foodservice will come online, said Seckman. In the
past two years, companies have pledged to invest nearly $800 million in farmrelated production like ethanol, yeast and enzyme manufacturing.
"Our focus has been on capital-intensive production projects because they pay a
higher wage" than labor-intensive factory jobs, he said. It will take a while for
Cedar Rapids to regain its manufacturing footing.
Both manufacturing and telecommunications were hard-hit in the 2000 recession.
Companies like Aegon, GE Capital and Nordstrom help absorb a lot of
telecommunications talent, Seckman said, but Cedar Rapids is still down about
1,900 manufacturing jobs.
"Manufacturing takes longer to come out of a recession."
- Donnelle Eller