Why Iowa’s Unemployment Experiment Is Notable

Over the next few months, attention will be focused on Iowa and other Republican-led states to see if the early termination of federal unemployment insurance really triggers people to get back to work.

Important reason: Governor Kim Reynolds decided to cut a $ 300 weekly subsidy starting Saturday, making Iowa one of the earliest states to test whether the needle for labor participation works.

  • “This will be one of the biggest experiments in the US labor market I’ve never heard of,” Peter Orazem, a professor of economics at Iowa State University, told Axios.

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Big picture: The lack of urgency to return to work is puzzling and inconsistent with past recovery trends, Orazem said.

What they are saying: People may be at home because of the care of their children and the potential for viral infections, but with early school reopening and vaccination in Iowa, that should have been alleviated, Orazem said.

Opposite side: Paul Rottenberg, president of Orchestrate Hospitality, says adding $ 300 a week isn’t enough incentive to stay home.

  • He believes the pandemic has made Iowa worse. Shortage of existing workers And now it’s even more serious because of new jobs in fast-growing industries such as construction and warehousing.

  • “They aren’t interested in coming back,” Lotteberg said.

Workers too “You can now choose the job you really like,” said Mike Draper, owner of Raygun.

Line spacing: If Iowa wants enough workers to meet employment in the long run, Rottenberg said the United States needs to reform its work visas and immigration policy.

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