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Caucuses or Not, Iowa Workers Are Getting Screwed

Iowa’s first-in-the-nation caucuses are just around the corner. But all the state fair photo ops and cornfield rallies in the world can’t obscure a basic fact: the state’s workers are getting shafted.

The Iowa caucus in Marshalltown, Iowa during the 2016 election campaign. (Cordelia Persen / Flickr)

In early February 2020, the state of Iowa will once again cap months of straw polls, earnest paeans to “heartland” values, and reluctant nibbles on State Fair corn dogs to offer its ranking of the major party presidential candidates.

This quadrennial exercise (and especially the Democratic Party’s caucuses) carries the patina of participatory democracy, but it is hard to defend the state’s outsized importance in the nomination process. Iowa voters are not representative of the rest of the country, and the party activists that run the caucuses are not representative of Iowa voters. The Iowa vote is first not because it is important; it is important because it is first — an accident of history that has John Delaney or Michael Bennet defending ethanol subsidies to a huddle of CNN producers on the edge of Wapello County cornfields more than a year and a half before any real votes are cast.

That said, the Iowa caucuses are not just about the winners and the losers, the front-runners and the wannabes — they are also about the economics, the demographics, and the politics of Iowa itself.

Silos and Smokestacks

While feed caps and never-to-be-worn-again flannel shirts are staples of pre-caucus photo opportunities, agriculture is not the primary driver of Iowa’s economy. Farming accounts for just 3.4 percent of gross state product and less than 1.5 percent of state employment. Farming is not even the largest employer in Iowa’s nonmetropolitan counties (falling behind manufacturing, retail, government, and health care). Of those who are farmers, most rely on nonfarm sources for the bulk of their household income. The distribution of economic activity and employment in Iowa is not unlike the rest of the country, with manufacturing, health care, retail, and education accounting for about half of all jobs.

Agriculture — and the political attention it demands — is magnified for several reasons. Although direct farm employment represents a small share of state totals, it does generate plenty of downstream economic activity — including packing and processing industries, commodities markets, and business services. Commodity prices (especially corn, soy, and pigs) drive land values — and with them, state revenues. (Corn and soy production for export has been roiled by the Trump Administration’s tariff tantrums.) And corn — the state’s primary field crop — is a key component of the energy sector. What’s not fed to the state’s population of 25 million pigs is turned into ethanol — an overbuilt sector that depends heavily on federal subsidies and federal refining standards.

Across the rest of its economy, Iowa looks a lot like the rest of the country. After more than a decade of glacial recovery from the Great Recession, employment has largely recovered in manufacturing, construction, finance, and professional and business services. Even with historically low levels of unemployment (at 2.5 percent in September, Iowa had a lower rate than every state but Vermont), the state’s economy is delivering little to working families.

Growth in Real Wages by Percentile: Iowa, 1979–2018

Since 2009, the median wage in Iowa has crept up a meager 4.4 percent, and most of those gains have gone to earners in the ninetieth percentile or above. Median household income has inched up over the last decade, and (at $76,068) is not much below that of the nation as a whole — but only because, in a chronically low-wage economy, more family members are in the labor market. For one in five Iowa families, and nearly two-thirds of single-parent families, earnings fall short of meeting even a basic needs budget.

Old, White, and Moving to Town

Iowa’s overall population growth is slow and confined almost entirely to a few metropolitan counties. Nearly two-thirds (sixty-four) of Iowa’s ninety-nine counties saw their peak population before World War II, and two-thirds (forty-two) of those counties saw their peak population in the nineteenth century. In sixty-two of ninety-nine counties, the largest town has a population of less than ten thousand.

These nonmetropolitan counties are rapidly aging: in twenty counties (as of the 2010 census), over one-fifth of the population was older than sixty-five. Their job base is relatively weak: often a single low-wage employer such as Walmart, a packing plant, or a distribution center dominates the local labor market. Their wages are lower: the urban-rural wage gap in Iowa widens with educational attainment. And public goods and social services are spread thin.

All of this, in turn, yields a starkly uneven and volatile political geography. In 2016, twenty-eight Iowa counties that had gone for Obama in 2012 flipped to Trump by more than 15 percentage points — a change of heart driven largely by a collapse in Democratic turnout. Trump carried ninety-one of ninety-nine counties in Iowa in the 2016 election. Clinton’s eight counties contained over 40 percent of the state population, and all but one were at their peak population in 2016.

In its broader demographics, Iowa looks decidedly unlike the rest of the country. As of 2017, over 90 percent of the population identified as white alone, 3.4 percent identified as black alone, and 5.7 percent identified as Hispanic (of any race). In fully seventy-two of Iowa’s ninety-nine counties the non-Hispanic white population was over 90 percent, and in eighty-nine of ninety-nine counties the African-American population was under 3 percent.

Racial Composition by County

As in much of the Midwest, the result has been a stark pattern of racial stratification and segregation. The African-American population is concentrated in a few metropolitan counties; and within those metropolitan settings, patterns of residential, school, and occupational segregation are persistent and long-standing. On almost every metric of opportunity and outcome — from grade four math scores to rates of incarceration — Iowa’s racial disparities are alarming and consistently fall at the bottom of state-by-state rankings.

The Attack on Workers

These dismal patterns and prospects are generated less by the weakness of the economy than by the weakness of economic policy. Tight labor markets have not produced broad prosperity in Iowa because state lawmakers have systematically undercut the bargaining power of workers, underfunded K-12 and higher education, and undermined regulatory protections.

Since 1947, Iowa has been a “right-to-work” state — a fact it proudly advertises to prospective employers and investors. Union density is only 5.8 percent in the private sector and just 12 percent in manufacturing — a sector increasingly dominated by staffing services and contingent employment. In early 2017, the GOP-controlled legislature gutted public sector bargaining by dramatically narrowing the scope of negotiation, capping wage increases, and subjecting bargaining units to onerous (and undemocratic) recertification procedures. To their credit, the state’s public sector unions have taken this on as a bargaining opportunityand lost little ground to date — but if the experience of Wisconsin is any indication, even keeping union density steady will be hard to sustain.

Union Coverage, 1983–2018

Iowa has not raised its minimum wage in more than a decade and is now one of only fifteen states (and one of four in the Midwest) to offer its workers no more than the federal rate of $7.25 an hour. Increasing the Iowa minimum to $15 an hour by 2025 would offer a direct boost to over a quarter of Iowa’s labor force.

Not content with inaction, the legislature in 2017 prohibited cities and counties from raising the wage floor locally. The so-called preemption bill short-circuited minimum wage ordinances that had passed in five of the state’s most populous counties — making it the first state to actually lower workers’ wages by legislative action. And, to add insult to injury, state enforcement of wage and hour standards are virtually nonexistent — an invitation to wage theft that costs both working families and state revenues. The state doesn’t even have an overtime law.

Meager labor standards are coupled with an increasingly ragged safety net. Iowa expanded Medicaid coverage under the Affordable Care Act (ACA), but also substantially privatized Medicaid in 2016 — a decision that has been disastrous for patients and the state budget. Only 17 percent of eligible Iowans enrolled in ACA coverage in 2018 — the lowest rate in the nation — in large part because the state has struggled to find insurers willing to participate in the state exchange.

In April 2017, at the behest of Tyson Foods and other employers, the legislature overhauled the state’s workers’ compensation system — substantially lowering awards and shifting the costs and risks of job-based injury onto workers, their families, and the public. Efforts to do the same to unemployment insurance — slashing benefits and eligibility — fell short last session, but will be at the top of the legislative docket in the spring.

While working Iowans and their families are being cast to the whims of the market, the same cannot be said for employers and investors. Iowa offers a cornucopia of business credits and incentives, most of which are accompanied by minimal performance standards. The state’s research activities credit alone cost over $70 million in 2018, most of which (since the credit is fully refundable) went directly to some of the state’s largest companies. Rockwell Collins, a defense contractor with almost $6 billion in sales in 2017, paid no Iowa taxes that year and pocketed a check for almost $14 million.

Deference to private interests and indifference to the health and safety of ordinary Iowans extends to environmental policy as well. The state’s twenty-five million pigs and intensive corn and soy production contribute not only to horrendous water quality in Iowa’s wells and waterways, but also toxic downstream effects running out into the Gulf of Mexico. The response, not surprisingly, has been to slash funding for nutrient reduction and other remediation, shield massive animal feeding operations from legal liability, and sharply constrain investigative reporting of conditions in feeding operations and packinghouses.

None of these policies enjoy broad public support, and no one in the statehouse or the governor’s mansion was elected on a platform of treating workers like serfs and the earth like a sewer. But this is where we are. It’s definitely not heaven, it’s Iowa.

The Caucus and the Left

It is unclear how this dismal state of affairs — both in Iowa and nationally — will shape the February caucuses or the election next November. Certainly, some Iowa Democrats are rushing to the center, muttering about “electability” and other intangibles. Joe Biden is clinging to his inertial support, Pete Buttigieg is polling well, and two high-profile endorsements from state officials (Democratic National Committee member Jan Bauer and attorney general Tom Miller) have gone to Montana governor Steve Bullock.

But it’s hard to believe that those sentiments will carry the day. Crowds for Bernie Sanders and Elizabeth Warren (not to mention Greta Thunberg) have been huge. And the organization and thirst for change on the Left predate caucus season.

Sanders’s run in 2016 left a lot of boots on the ground. The labor movement and its allies have responded fiercely to the legislative attacks of 2017 and 2018. And Iowa progressives are galvanized by both the horror show in Washington and by the sorry state of state politics. All of that, at least, is cause for hope.