Hawkeye Reporter

Iowa cut out federal unemployment benefits to deal with labor shortages. Now, due to a rise in annual income, the state benefit is increasing. Back in May, Iowa Gov. Kim Reynolds announced that the state would be opting out of the extra $300 in federal unemployment benefits.

Effective June 12, Iowa had opted out. This was in response to many businesses across the state having great difficulty hiring workers.

“The overwhelming message we receive from employers these days is the lack of workforce that is adversely affecting their ability to recover from the pandemic,” Iowa Workforce Development Director Beth Townsend said in a release. “There are currently over 66,000 job openings posted on https://www.iowaworks.gov/vosnet/Default.aspx. Our field offices are open and ready to help. We are very excited to return to providing the support and help we love to provide – helping Iowans find their next great job or new career pathway and helping employers find their next great employee.” 

Iowa businesspeople also complained of the labor shortage. 

“It’s drivers, producers in plants every step of the supply chain is having the same worker shortage we have in our industry, so costs are going up," Joe McConville, owner of six restaurants in the Des Moines area, told KCRG.

Restaurants are one of many industries across Iowa that have been experiencing difficulty in finding new employees, KCRG reported. Many business owners say that this is the worst labor shortage in decades. According to a NY Times report, the typical worker in Iowa would actually have made more by collecting unemployment with the additional federal assistance than they would by having a normal job. In fact, Iowa was the state with the fourth highest additional income provided by federal unemployment benefits.

The state unemployment is slated to slightly increase this year from $605 to $651, the Des Moines Register reported. This is a result of the average annual income in Iowa increasing by nearly $4,000 from 2019 to 2020.