Psst! Iowa’s conservative economic development doctrine is not working

Recent export of manufacturing jobs to Mexico shows Iowa's economic development strategy isn't working. (Photo illustration by Iowa Capital Dispatch with tractor photo by Jared Strong, cash by Getty Images and signpost via Canva)

We should talk.

Please go to a quiet corner of the room, away from prying eyes and ears, and then read this column. If you tell anyone what I wrote here, I will deny it and claim an imposter posted under my name.  Here is what you need to know: It is not working.

The cold, stark reality of this came to me when two events took place. The first was when I watched the conclusion of the Indianapolis 500 and observed the winning car drive over the black and white checkered tile to the winner’s circle sponsored by Hy-Vee. Hy-Vee, which closed three stores serving middle-income Iowans and cut the hours on another, could afford the pretty penny it took to land that advertising spot.

If that wasn’t enough, just this past month the darling of Iowa manufacturing, John Deere, started announcing layoffs a few at a time, but the total is now approaching 2, 000 . The blame lay on the fact that the price of corn was falling, down under $5 a bushel.

The company, which recently drew its own national television audiences last weekend with the annual John Deere Classic golf tournament, had assets last year of $104 billion, up 15% from the previous year. Even with lower farm income projections for this year, Deere expects profits this year to exceed $7 billion.

Then came the kicker, the cold glass of water thrown in your face: Deere will move further operations to Mexico in 2025-2026.

It raises the question: What more can we give them and other large corporations so that they will come and stay in Iowa? That is the challenge when you consider all our state government has done since 2012:

• Under Gov. Terry Branstad, we cut taxes on business equipment and commercial property.
• We reduced the required contributions employers must make to the unemployed insurance fund and lowered and delayed benefits to those out of work.
• We have expanded the labor force by allowing children 14 years old to work in factories, removed any restrictions on those 16- or 17-year-olds who are now permitted to work the same hours as an adult. This expanded the labor source in Iowa and reduced costs.
• Iowa has given outright $30 million for manufacturers’ plant modernization.
• Most recently, $93 million was made available to any two businesses that would create a mega site for future commercial enterprises to locate.
• We crippled labor unions by basically abrogating the collective bargaining act for public employees. We require unions to certify their right to bargain for their members by mandating annual votes of approval of the membership.
• We reduced and will eliminate income taxes on businesses’ highest-paid executives while cutting lower wage earners’ taxes only slightly.
• We have lost count of how much cash and land we have given away to the titans of capitalism under the promise that it would create “good jobs.”

Even a critic would not say that our leaders have not pursued an aggressive and expensive policy of a conservative doctrine of economic development. But here is what I want you to know: It is not working.

A few factors jumped out in support of this conclusion. First, Iowa’s population grew in 2022 a reported 0.01% and of that growth, a substantial number was from immigrants.  The average state saw a population increase of 0.03% and some went as high as 5 and 6%.

More bad news was what the Bureau of Economic Analysis told us most recently. Among all states, Iowa was 48th for growth in personal income. That was second-lowest score nationally, tied with Mississippi. Upon graduation, 46% of our college graduates leave Iowa and seek employment elsewhere.  Over 300 teachers are planning to depart the state after we gutted Area Education Agencies. Nationally, our rank among those high school students taking the SAT continues to decline.

Now a cynic would argue that this plan represents what our leaders want Iowa to become: A primarily Christian, not public, taught population, poorly educated but worker trained. But I assume the governor and her allies are working in good faith.

To be helpful, I would only make one minor suggestion. Until recently, Iowa’s motto was “Iowa A Place to Grow.” Bring it back, it’s good. But a special and specific slogan for wealthy individuals and international corporations of vast financial resources: “Come to Iowa. Get the money and run, like a Deere, to Mexico.”

We all have witnessed the governor’s capacity for retribution for those who drew her wrath.

I deny that I wrote this article.

The post Psst! Iowa’s conservative economic development doctrine is not working appeared first on Iowa Capital Dispatch .