State data shows wages increasing

Northwest Iowa’s history of below average pay may be changing.

Newly released statistics show “Laborshed” wages climbing across the Iowa Lakes Corridor region.

Statewide laborshed wages moved upward from $17.46 in FY 2018 to $18.08 in FY 2019.

“The economy is growing and demand for labor is strong,” said Kiley Miller, CEO of the Iowa Lakes Corridor Development Corporation. “That inevitably drives up wages.

“Higher wages are a mixed blessing,” Miller continued. “They help draw sidelined workers into the labor pool, provide disposable income for families, and make it easier to attract newcomers to our region, but they also constrain employment growth because of the cost to employers.”

Compiled by the research division of Iowa Workforce Development, the “Laborshed” wage is distinct from a county average wage. A laborshed is the commuting area from which a city or county draws workers. The Spencer laborshed, for example, extends roughly from south of Storm Lake to north of Lakefield, Minnesota, and from Algona in the east to Orange City in the west.

The laborshed wage is the mean wage for jobs within an inner ring of that oddly shaped circle. Most, but not all jobs, that is. Government, retail trade, health care and social assistance, and accommodation and food service positions are not counted.

With so many exclusions, what’s the relevance of the number? The Iowa Economic Development Authority uses laborshed wages when awarding state financial incentives. Only jobs paying at or above the local laborshed wage are eligible for assistance. Say, for instance, a manufacturing company was expanding in Buena Vista County. That company would have to pay $17.23 per hour to receive state support.

As well, pay for incentivized jobs must hit 120 percent of the average laborshed wage within three years. Dickinson County is the lone exception in the Corridor to the latter rule. The state has designated it one of 33 economically distressed counties because of unemployment rates in recent years. As a result, employers in Dickinson County are free from the 120 percent requirement.

To learn more about laborsheds, state and local incentives, and other aspects of the economic development process, visit lakescorridor.com or call the Corridor offices, 712.264.3474.