July 23, 2014

State economic development officials use nostalgia as part of their pitch


A Viewmaster used to promote Iowa.

New versions of vintage toys from the 1950s and ’60s are helping to prod business leaders around the nation into building their next facility in Iowa.

Tina Hoffman, spokeswoman for the Iowa Economic Development Authority, says about 2,500 key corporate leaders across the U.S. are receiving green-and-white care packages from the Hawkeye State.

“We have a targeted list of prospects that we’re going out to,” Hoffman says. “One of the things that we’ve done is to send them things that are kind of different, that they’ll keep on their desk and will put Iowa at the top of their mind when they are considering their next business expansion or relocation project.”

One of the incentive gifts is a rebranded Viewmaster. It resembles a pair of binoculars but instead of being used to see far-away objects, several color photos of Iowa are pre-loaded in the devices.

“We have included with them one disc and there are about eight pictures,” Hoffman says. “It talks about everything from quality of life to business climate to commute times, all of those things that are important when you’re looking at a new business location.”

While stereo-scopes were around decades earlier, the Viewmaster became a very popular toy starting in 1966, so there’s a clear, nostalgic appeal to business leaders who are in the Baby Boomer Generation.

“We also have done the Magic Eight Ball,” Hoffman says. “That’s a pretty cool thing. When you ask the Eight Ball a question, the answer always comes up, ‘Iowa.’ There are several different specific answers but ultimately, it’s always Iowa.”

Each device costs about $15 but Hoffman says it’s worth the price. Since January of 2011, she says the office has been working with projects that will result in more than $9 billion in capital investment in Iowa.


Lawyer says Supreme Court ruling in state descrimination case has some positives

The Iowa Supreme Court upheld a Polk County District Court ruling that determined the State of Iowa did not discriminate against African-Americans in their hiring and promotion practices. Attorney Tom Newkirk had argued in the class action suit that the mostly white managers had an implicit bias against African-Americans.

Newkirk says he is not surprised by the Supreme Court ruling, but says the justices did not totally overlook his arguments. “But it was also surprising and mildly heartwarming to see the court in a unified way express how Iowa law is different, how it is going its own way from the federal system to some extent, and how the court has acknowledge not only the risk of implicit and subconscious forms of bias in our society, but also the role that they may play in generating inequality in our system,” Newkirk says.

The Supreme Court acknowledged discrimination may have occurred, but said the arguments didn’t convince the court it was widespread throughout 37 departments in the state. The ruling did indicate the court may be sympathetic to implicit bias cases in the future. “It’s funny when you read an opinion like this you think, ‘well maybe the lawyers should have taken a different tactic is that what they are telling them?’,” Newkirk says. “But I think that the answer is, noone would have predicted not even myself, that the court would be suggesting that Iowa may go the way of what’s called maybe a negligence theory,” Newkirk says.

The case was first brought in 2007. Newkirk doesn’t believe anything has changed in the years the lawsuit has been making its way through the court system. “I would say almost without fear of contradiction — that other than platitudes and that state saying it is been making continual improvements — that there have been zero substantive changes to how the state runs its hiring and promotion system from the time we exposed this problem to them, to the present day,” according the Newkirk.

He says the Supreme Court ruling suggests the state remains open to more legal action. “Unless they want some other law firm coming in and applying some new theory to it, they need to get on the stick and get it fixed,” Newkirk says. “We’ve offered to help them for the last seven years to get it fixed, but they have continued to ignore us. And I am fearful that they will continue to do so.”

Iowa Solicitor General Jeff Thompson says since the suit was filed, Iowa has worked to make hiring more objective. “Justice Waterman points out that some of the statistics raise questions. We’re aware of that, we’ve been working on that, and we’ve been actively perusing improvements in the hiring process to address those issues,” Thompson says. There are 29 named class members in the lawsuit and as many as 6,000 members involving over 20-thousand employment applications going back to 2003.


State unemployment rate holds steady in June

Iowa Workforce Development spokesperson, Kerry Koonce, says the June unemployment rate held steady at 4.4 percent. “This is compared to 4.8 a year ago, and the national rate is standing at 6.1 percent, so the Iowa is still significantly below that,” Koonce says.

Koonce says college graduates out looking for jobs impacts the market at this time of year. “They might not be employed yet, so they’re part of our labor force but they can also increase our unemployment numbers,” Koonce says. “So the overall labor force increased, but so did the number of people that were unemployed, that causes our rate to hold steady.”

Koonce says there were gains. “We did actually add 31-hundred jobs to the economy for the month. Most of those being in the government sector at the local level,” Koonce says. Workforce Development figures show a gain of 10,800 jobs in the last three months.

There were some loses in June. “The education and health services category took about a 17-hundred drop,” Koonce says. She says most of that is from private schools and colleges going into their summer breaks.

The total number of working Iowans increased to 1,624,600 in June, up 500 from May, and 32,100 higher than one year ago.


King seeks end to prevailing wage rule on federal contracts

Republican Congressman Steve King says it’s time to do away with a federal requirement the “prevailing wage” be paid to employees working on construction projects that are financed with federal funds.

“When you have a relationship between two people and they agree to a wage scale, that’s all that should be required here,” King says. “Instead, this federal minimum wage scale sets a union scale. It’s not prevailing wage. It’s union scale.”

A federal agency calculates the prevailing wage for laborers, electricians and other construction tradesmen in areas of the country. King argues the requirement inflates the cost of federally-financed construction projects, like highways.

“I started a construction company in 1975. We almost immediately had to deal with the federal government coming in and saying: ‘On this side of the road you shall pay your shovel operator this and on the other side of the road you shall pay him something that might be half again more than that and the guy that’s with the grease gun gets this and the one that runs the excavator gets that,’” King says. “The federal government micromanaging and disrupting the efficiencies in our construction companies results in far higher costs for our construction projects.”

The prevailing wage requirement is for any federally-funded construction contract worth two-thousand dollars or more. King made his remarks on the House floor this past week as he proposed an amendment which would have repealed the prevailing wage requirement. King’s amendment failed on a 181-239 vote.

Trucking industry looking for drivers

The Iowa Motor Trucking Association has created a jobs website to try and help members fill some of the thousands of open positions in the industry. IMTA president, Brenda Neville, says it’s always been difficult to find drivers but now companies are seeing faster decline as drivers retire. “Frankly we have more drivers exiting the industry than we have entering the industry,” Neville says. “We have a very complex regulatory environment that is prompting some people to leave the industry. So it’s really just a supply and demand issue.”

Neville says it’s difficult to recruit young people as most trucking companies won’t hire drivers younger than 21 because insurance companies have strict parameters on age. “There are kids that are 17, 18 years old and specifically the rural parts of Iowa that have driven trucks, they’re farm boys. And what’s happening is that we lose them because between the age 18 and 21 they find another occupation or another career that is maybe a little bit more desirable,” Neville says.

She says regulations limiting how many hours someone can drive also keeps companies from hiring younger people. Neville says the average yearly salary for a truck driver in Iowa is between 45 and $50,000. IMTA launched the website www.IATruckingJobs.com on July 1st and already has more than 100 job listings.


Several factors make Iowa a draw for data centers

Iowa has become home to data centers or server farms for some of the biggest players in the tech industry. Why do companies like Google, Facebook and Microsoft choose a state in the middle of the country to store their data?

John Roth is a data center facilities manager for OneNeck IT Solutions in Cedar Falls says one advantage of securing data in Iowa is you don’t have to worry about earthquakes, hurricanes and other natural disasters. “You want to build where you can avoid that and have your facility maintain its up time. If you look at maps, Iowa has very low risk,” Roth says. He says tornadoes are about the only thing you have to worry about and you can build to mitigate that risk.

There are now large data facilities in operation or under construction in Council Bluffs, Altoona and West Des Moines. Iowa State University economist Dave Swenson says Iowa’s cheap energy prices are a major draw for the facilities. “These companies consume an unbelievable amount of electricity. They’re monsters. They eat electrify. That’s how they run, they require massive amounts of power,” Swenson says.

Iowa Economic Development Authority director, Debi Durham, says Iowa’s cheap electricity is due in part to the fact the state doesn’t apply sales taxes to the utility. Additionally, she says Iowa electric companies keep costs low with the investment in new renewable energy, and the diversity of their portfolios. “And then you have really strong investor owned utilities here, and then you couple those with the rural electric coops with are also strong in economic development, and then the third player is the municipalities, and then to be very competitive themselves,” Durham says.

ISU economist Swenson says Iowa’s attractive tax incentives sealed the deal for the companies locating the operations here. “Iowa is much more liberal in its range of state and local government incentives that it affords businesses,”Swenson says. “Other states, usually, usually are much more circumspect both in the amounts, the duration, the scope and the type.” Swenson says it’s doubtful whether places like Altoona and West Des Moines get back what they give up in property taxes.

However, Debi Durham says the state isn’t going into these agreements blindly. She insists Iowa will get the jobs Google, Facebook and Microsoft promise. “We actually hold all of our clients accountable –so there’s a day of reckoning down the road. And if they don’t meet those numbers then we exercise claw-backs. Which means you have to pay back incentives, or you don’t get to take, if you haven’t taken them,”Durham says.

When Microsoft announced West Des Moines as the site of its newest datacenter, many in the company’s home state of Washington were not pleased. Some speculated Iowa’s generous tax incentives tipped the scales, despite several logistical advantages of being in the center of the country. Both Microsoft and Facebook declined to be interviewed for this story.

By Sarah Boden Iowa Public Radio


Hatch challenges Branstad’s job creation claims

The Democratic candidate for governor says he needs to “beat down” the Republican governor’s job creation claims. Democrat Jack Hatch says Republican Governor Terry Branstad is misleading Iowans.

“He’s not necessarily fudging the numbers, but he’s not being totally honest,” Hatch said Thursday during a campaign event in a Des Moines coffee shop.

Hatch’s beef is with Branstad’s boast that 130,000 jobs have been created in the state since he took office in 2011.

“Even a fifth grader knows that you subtract that which you lose to get to the real number of the number of jobs that have been created and (Branstad) doesn’t tell you that,” Hatch said.

Hatch told the coffeehouse crowd that Branstad fails to mention the 60,000 jobs which have been lost in Iowa over the past three and a half years.

“They talk about the governor creating 130,000 jobs,” Hatch said. “It is that kind of messaging that we have to beat down and that’s the kind of false statement that gives rise to why people are cynical about government.”

Hatch also attacked Branstad’s claim that Iowa’s unemployment rate has improved since Branstad returned for a fifth term as governor. Hatch said Iowa had the fifth lowest unemployment rate of any state in 2011, but now it is two notches above that — the seventh lowest of any state in the country.

“The job deficit and the slow recovery of Iowa has to be recognized it we’re going to correct it,” Hatch said.

Branstad’s campaign spokesman said Branstad has an “unprecedented record of success” during the past three and a half years that includes “a near 30 percent drop in unemployment.” As for the job-creation numbers, Tommy Schultz — the communications director for the Branstad-Reynolds campaign — said Branstad is relying on data from the state Iowa Workforce Development agency rather than “the rhetoric of Jack Hatch.”