Iowa’s slow growth in jobs has not been matched by increases in workers’ paychecks, according to a new report from the Iowa Policy Project. 

In the “State of Working Iowa Wages: Iowa Needs a Raise” report released today, University of Iowa professor Colin Gordon concludes that wage stagnation continues to be an issue for workers in Iowa, despite an unemployment rate below 3 percent and the rate of underemployed workers reaching its lowest point in two decades. 

From 1979 to 2017, wage growth has been “essentially flat for all but the highest-wage workers,” the report found, despite dramatic increases in the productivity and educational levels of Iowa workers. Wage gains across the lowest-earning 80 percent of workers in Iowa rose between 5 and 7.7 percent over a 38-year span.

“More troubling, the wage growth that has accompanied previous recoveries is nowhere to be seen in our long climb back from the Great Recession,” Gordon said. 

Gordon argues that public policy choices, among them the Legislature’s curtailment of collective bargaining rights for public-sector workers, have exacerbated the issue of wage inequality. 

“In short, it is not the health of the economy that has battered Iowa’s workers,” he said, “but a dramatic change in the distribution of its rewards. Increased productivity has not been shared with workers in the form of higher wages, as was common in previous eras, but captured in business profits.” 

Gordon’s analysis, posted in the “Wages” section of IPP’s website, also found that: 

• Iowa’s median wage ($17.33 in 2017) tracks below national and regional trends.
• Wage losses for men, as much as gains for women, helped to narrow the gender gap. In 1979, Iowa women made 62 cents for every dollar earned by men. By 2017, it was 85 cents.
• Low-wage workers in Iowa make about the same as low-wage workers elsewhere, but the highest-paid workers in Iowa fall further and further behind those in the region and the U.S.
• While higher-educated workers are paid better — almost $9 an hour more than workers with only a high school diploma as of 2017 — pay has been roughly stagnant for those workers with bachelor’s degrees since the late 1990s.