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Through collaborative leadership we supplied a pipeline of $812 million in new capital investment projects to strengthen and diversify the assets in Iowa. But beyond big number private-sector prospects we also work with the progressive small businesses, nonprofits, civic leaders, workforce, education institutions, utilities, transportation, housing, etc to maximize productivity and long-term prosperity in our evolving economic landscape.

Workforce 101: What insight does “unemployment” REALLY reveal about our economy?

Unemployment expresses the number or percentage of workers who lost employment without blame being assigned. It is especially concerning to our macro economy when such workers with valuable qualities and skills don’t find similar or better employment opportunities within a short period of time because society loses out when they are not adding value to the economy. Let’s take a look at Tama County’s unemployment patterns over the past decade to shed light and disperse some of the most common myths.

MYTH 1: Comparing unemployment numbers from one month to the next month is the best way to tell if a market is improving
This is one of the most common mistakes. One could easily be tricked into believing the overall employment market is deteriorating if you hear November 2010 unemployment was 6.6% and December unemployment was 7.7%. And though the numbers are correct, the critical thinking would be flawed. The Tama County market is built on seasonality as is clearly evident when you look at trends over the past decade. Year after year unemployment trends cycle to peak in the winter, while employment peaks in the summer. Thus to draw a meaningful conclusion on workforce data, month-over-month comparisons would yield much more meaningful insight. E.g. December 2009’s 8.2% unemployment compared to December 2010’s 7.7% suggests that recovery (the exact opposite) is a much more likely scenario.

MYTH 2: Unemployment % is the best economic indicator
Yes unemployment is an important measure, but it is only one amongst hundreds of indicators. It is also important to recognize that it is one of the lagging indicators meaning it is one of the least effective in anticipating changes in our economic future. The unemployment number itself also loses accuracy power when trying to understand how many people are actively looking for jobs because it does not factor job seekers who did not file for unemployment e.g. underemployed workers, recent graduates, parents returning to the workforce.

MYTH 3: 0% unemployment would mean our workforce economy is perfect
A world where every person in the workforce that wants a job has a job sounds ideal, but that only scratches the surface of moving towards the healthiest economy possible. Other factors of importance include wage rates, benefits, working conditions, underemployment, flex-time, upgrading of skills. Generally  4% unemployment is accepted as a healthy dynamic equilibrium to remain connected to evolutions and innovation in markets. When unemployment is greater than 4% our primary economic development focus leans towards strategies to add jobs to the economy, whereas unemployment lower than 4% would encourage a primary strategic focus on growing our workforce population.

MYTH 4: High unemployment % means there are very little jobs available
2010 has a great example that illustrates how a mismatch can occur between market demands and available skills. In August Tama County Economic Development broke the story that our local industries were growing again, but struggling to fill positions in spite of unemployment being the second highest it has been this decade (by month-to-month comparison). But the caveat was that our manufacturing, trucking, and healthcare sectors need workers with specific certifications and skills. Our short-term solution was to highlight this market intelligence to the workforce within a 1 hour driving radius via various forms of media, while our long-term solution was to inform educational institutions, community leaders and workers considering retraining.
It is also very important to note that one county alone does not define the market. Thousands of workers cross the Tama County line to come or go to work. Our economy is very much connected to neighboring counties, and partnerships within our 1 hour drive trade zone are very important as both a source of jobs for our residents and source of skilled workers for our companies.

Whether you are an employer or a job seeker, you are welcome to make use of our free job posting board to help find your best possible workforce market match. www.tamacountyiowa.org/employment


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