When good news is turned to bad

The Cedar Rapids Gazette
Aug. 21, 1994

Gazette Editorials

When good news is turned to bad

FEWER PEOPLE in Iowa are out of work and fewer housing units are unoccupied. Cause for celebration, right? Not necessarily.

State economist Harvey Siegelman said last week that tight labor and housing markets may hinder Iowa’s growth potential, an emerging situation he called “problems of prosperity.” Favorable economic conditions have revitalized the state’s manufacturing and construction industries. But as people return to work, that shrinks the pool of workers available to other firms either new to Iowa or expanding. Companies that had planned to create 1,000 jobs have scrapped them, Siegelman said, because of a lack of skilled workers and insufficient housing.

Every state should have such problems.

Similar alarm was sounded by Siegelman last fall, when he warned that Iowa is experiencing a shortage of construction workers. “We should see wagon trains of construction workers riding into the state.” And last month, a Cedar Rapids Chamber of Commerce executive said Cedar Rapids lost out on landing a 900-worker computer software plant because the company was afraid the low jobless rate here would mean it couldn’t find enough workers.

It’s a turnaround from earlier this year, when people working on Cedar Rapids economic development were cheered by a front page Wall Street Journal news story lauding low unemployment here. In the hands of certain businesses and economists, low unemployment turns from a community’s asset to its chief liability.

Thus points made in this corner Aug. 4 bear repeating: It’s wrong to assume that a low jobless rate automatically means a shortage of workers. In the first place, official unemployment figures do not reflect the long-term jobless — those who have exhausted their benefits and no longer appear on formal registries of the unemployed. Don’t be fooled by the statistics. Plenty of people are out of work. With training and other assistance, they would be helpful to and helped by new or expanding businesses. Second, Iowa workers are mobile. Many are underemployed. They will travel to obtain a better job.

Meanwhile, the housing shortage Siegelman cited backs up the need for the kind of project cited in this corner a week later, when encouraging words were offered Aug. 11 to Metro Area Housing Program in its effort to seek funding for turning warehouses near Third Street and 10th Avenue SE into housing.

If there were some way a forward-thinking consortium of businesses here could train the heretofore unemployable and finance their housing, Iowa would again land on the Wall Street Journal‘s front page.

Utopian thinking, yes. But it’s closer to being doable in Iowa than anyplace else.