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March 2015 Brief: Volume 22, Number 7

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The “Hardest” and “Easiest” Places to Live in Iowa

 

by Deborah D. Thornton

 

 

The New York Times printed an article last summer titled “The Hardest Places to Live in the U.S.” Using data on median income and life expectancy, plus the percent of residents who are college educated, unemployed, on disability, or obese, they generated rankings for all 3,135 U.S. counties. Most of Iowa’s 99 counties were somewhere in the middle, but some stand out on both ends.

 

At the high end of the list is Johnson County at number 32, followed by Bremer (51) and Story Counties (67) as the top three. At the low end is Lee County at 1,984, then Wapello (1,897) and Appanoose (1,822).[1] The main differences between Johnson and Lee are education and income. Johnson County (JoCo) is home of the University of Iowa, with many highly educated and highly paid government professors and doctors. Median income is $54,000 versus $42,000 in Lee County. Over 50 percent of JoCo is college educated, compared to 15 percent of Lee County. Importantly, unemployment in Lee is 8 percent and has been high for a very long time. Life expectancy is only about three years less, even though one-third of Lee County residents are obese, compared to just over one-fourth of JoCo residents. The rate of people below poverty is about the same, at 18 (JoCo) and 15 (Lee) percent. Therefore, it’s not that people in Lee County are so poor – it’s that income inequality in Johnson is so much higher.

 

The better comparison might be to Bremer County. The population, 24,600, is actually less than Lee, 35,600, but they have similar rankings on people 65 and over, travel time to work, home ownership, and people per square mile. The Bremer County seat (Waverly) is home to Wartburg College. This drives the college education percent to 28 percent, double Lee County. The poverty rate in Bremer County is quite low, at only 7 percent, half that of Lee County.

 

But change is on the way for Lee County. The Iowa Fertilizer Company, owned by Orascom Industries, will open a $1.9 billion new plant this year. Currently 2,700 people are employed doing construction and about 240 people will be employed permanently.[2] This effort is being subsidized with about a hundred million in state tax incentives, plus several hundred million more in local subsidizes – and it has been criticized by many, including PII, for that reason.

 

The number one industry in Lee County even before Iowa Fertilizer was manufacturing, employing over 26 percent of the workforce and paying over $1,000 a week. The average weekly wage in 2011 was $701, actually higher than Bremer County’s $691. Other major manufacturing employers in Lee County include Pinnacle Foods (Duncan Hines, Birds Eye, and other brands), Scotts Company (Miracle-Gro), and Siemens (wind turbines).[3]

 

The focus on manufacturing as a core industry for development is a good idea. As oil prices have declined and wages equalized, more companies are bringing manufacturing jobs home to the U.S. from overseas.[4] Orascom decided to build here because a significant portion of their sales are in the Midwest and they wanted to be better able to respond quickly to customer demands. “Reshoring,” as it is known, has the potential to bring “1 million new American manufacturing jobs by 2020,” according to the Boston Consulting Group.[5]

 

The jobs are good paying and in many cases highly technical. Recent job listings included an equipment specialist; a drafter; a controls system engineer; a production operator; a pipefitter; project, rotating equipment, reliability, and mechanical integrity engineers; and electrical/instrumentation and laboratory technicians.[6] These jobs will pay enough to support families, buy houses, and pay for college. Some management employees have Iowa ties and have returned home; others are newcomers.

 

The Lee County community leaders are responding to the opportunity presented, though crony capitalism it may be, by setting up a “Grow Lee” county economic development group, sponsoring business seminars, hosting an Advanced Manufacturing career fair, starting a Lego Robotics program for K-12 children, and organizing a Southeast Iowa STEM Festival.[7] They do not want to remain at number 1,984, at the bottom of the list of easy places to live in Iowa. Iowa Fertilizer is proving to be a good community member, as they have already donated over $60,000 to local charities.

 

In contrast, Johnson County is still dealing with the negative fallout of the use of Tax Increment Financing (TIF) by the city of Coralville to entice the VonMaur department store to move six miles from Sycamore Mall to Iowa River Landing. All that accomplished was hard feelings among neighbors and the “necessity” to spend even more taxpayer money to try to revive the now failing mall for the second time.[8] The local school systems are still dealing with the loss of tax money caused by the TIF. And no new jobs have been created, much less high-tech manufacturing jobs.

 

Though the better option is lower taxes and equal tax treatment for all industries, if one is going to offer incentives to attract new jobs to one of the poorest counties in your state, versus the richest, the Iowa Fertilizer Company was the right decision. Lee County is well on the way to becoming an “easy” place to live.

 

(Endnotes)
[1] Alan Flippen, “Where Are the Hardest Places to Live in the U.S.?” The New York Times, June 26, 2014, <http://www.nytimes.com/2014/06/26/upshot/where-are-the-hardest-places-to-live-in-the-us.html?_r=0&abt=0002&abg=0> accessed on February 14, 2015.
[2] Matthew Patane, “Iowa Fertilizer Plant to Open Late 2015, Company Says,” The Des Moines Register, January 29, 2015, <http://www.desmoinesregister.com/story/money/business/2015/01/29/iowa-fertilizer-eqypt-orascom-construction-industries-opening/22530465/> accessed on February 14, 2015.
[3] “Lee 2012 Annual County Profile,” Iowa Workforce Development, Employment Statistics Bureau, <http://iwin.iwd.state.ia.us/pubs/countyprofile/lee.pdf> accessed on February 15, 2015.
[4] Steven Malanga, “No Shore Thing,” City Journal, The Manhattan Institute, Winter 2015, <http://www.city-journal.org/2015/25_1_snd-reshoring.html> accessed on February 8, 2015.
[5] Ibid.
[6] “Jobs,” Iowa Fertilizer, <http://www.iowafertilizer.com/jobs/> accessed on February 14, 2015.
[7] “Newsletter,” Lee County Economic Development Group, February 2015, <http://www.leecountyedg.com/Lee/media/Lee/Newsletters/2015-Feb-Issue.pdf?ext=.pdf> accessed on February 15, 2015.
[8] Cory Porter, “City Council to Vote on TIF Today,” The Daily Iowan, November 4, 2014, <http://www.dailyiowan.com/2014/11/04/Metro/39845.html> accessed on February 15, 2015.

 

Deborah D. Thornton is a Research Analyst with Public Interest Institute, Mount Pleasant, Iowa. Contact her at Public.Interest.Institute@LimitedGovernment.org.

 

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