State Government Keeps Growing While Private Sector Sheds Jobs

Iowa’s Jobless Rate: It’s Getting Worse!

Four months ago the Democrat controlled legislature approved the largest spending package in Iowa’s history in addition to borrowing over $800 million leaving Iowa taxpayers with a bill a little under $2 billion. It was sold as the answer to Iowa’s economic troubles. Now that the dust has settled and the Governor’s reckless bonding scheme “I-JOBS” is underway, Iowa’s economy continues to tank as unemployment climbs.

…state government continues to grow adding 700 positions in the last year…

On August 21, 2009, Iowa Workforce Development announced Iowa’s unemployment rate has increased yet again, reaching its highest level since 1986. The jobless rate in Iowa is now 6.5%, up from the 6.2% reported last month. Last year at this time Iowa’s unemployment rested at 4.1%. Today, over 109,000 Iowans are out of work, 5,600 more than last month and nearly 40,000 more than one year ago a 57% increase. The manufacturing sector continues to bear the brunt of the impact, shedding 4,800 more jobs in July. Iowa’s manufacturing industry has lost more than 30,000 jobs in the last year. All this announced just prior to the unfortunate news that Cummins Filtration will eliminate 400 filter assembly jobs in Lake Mills and send them to Mexico. While Iowa’s private sector is forced to tighten its belt during these difficult economic times, state government continues to grow adding 700 positions in the last year, 200 last month alone.

According to Iowa Workforce Development Director Elizabeth Buck, “recent signs at the national level indicate that the recession may soon be over.” But in the same breath stated, “…the Iowa economy will continue to shed jobs for some time…” To make matters worse, the Obama Administration recently announced the recession is not over, predicting unemployment nation wide will eclipse 10% in the 4th quarter of 2009 and maintain double digit levels at least through most of the 1st quarter of 2010. The Administration is also revising previous deficit projections from $7 trillion to $9 trillion.

Rather than taking action to reform Iowa’s tax code and reduce the tax burden on individuals and Iowa businesses – to spur job creation – Democrats appear content on their borrow and spend approach while embracing Iowa’s record jobless rate by touting the fact that “Iowa’s employment numbers outperform neighboring states” ( 8/21/09 press release). However, this claim is somewhat misleading because Iowa’s three neighbors to its west have unemployment rates much lower. Furthermore, 17 states and the District of Columbia saw its unemployment rates fall during the month of July.

House Republicans declared in April and maintain today, borrowing and spending is not the answer to our economic ills. In order to pull Iowa out of this deep financial hole the legislature must enact commonsense policies to create an environment that drives economic growth and long-term sustainable job creation. Borrowing, spending and eventually taxing is not the answer, today’s unemployment rate and deficits are proof of that.