The skill-applying population
Friday, July 18, 2014 6:00 AM
It might not be news that Greater Des Moines is growing and rural Iowa is losing population, but Iowa State University economist Dave Swenson has conducted some research that really illustrates the stark contrast between the Des Moines area and many other regions of the state. Swenson took a close look at the population change among different age groups from 2000 to 2010 and found that the state is not measuring up in a key demographic of 35- to 44-year-old people, an age range that Swenson refers to as the “skill-applying” component of the population, as opposed the “skill-acquiring” group of 25- to 34-year-olds. Swenson helped us take an inside look at the numbers in an effort to see how our region’s populations are shifting. Here’s what we found:
The past three years
How has the population changed and how does Greater Des Moines compare to both neighboring Midwest cities and other cities in the state.
The urban-rural divide
Does the urban-rural divide in Iowa matter for your business?
The graying workforce
As a city, an increase in the number of people ages 50 and older will present challenges and a need for strategic thinking.
National vs. Iowa:
Nationally, the 35- to 44-year-old population decreased 9 percent, which is to be expected, given the low national birthrate in the 1970s. But in Iowa, the population in that age range has decreased faster than the national average at 18.1 percent.
That’s not good, because it means that the skill-applying portion of our workforce is leaving the state. Bad news for businesses in Greater Des Moines, right? Not so fast. When Swenson broke the numbers down even further, he discovered an urban-rural divide in the state.
Rural vs. Metro:
Iowa cities defined in Swenson’s research as rural (less than 2,500 people) had a decrease of 30.4 percent in their skill-using population. Areas defined as small urban (between 2,500 and 19,999 people) and large urban (20,000 to 49,999 people) lost more than 25 percent. But Iowa’s metro areas (defined as having a central city with more than 50,000 people) decreased only 10 percent, nearly in line with the national average.
Polk County, meanwhile, decreased only 2.8 percent in the 35- to 44-year-old population.
When you take into account the natural nationwide population trends, that means Greater Des Moines is actually performing very well in comparison to national numbers. That’s because of two primary factors. One, the region is seeing in-migration, both from other states and from cities within Iowa. Two, the region is retaining its 25- to-34-year-olds, who then eventually move into the skill-applying range. Swenson attributes the area’s growth in the 35-to-44 age range to four industry sectors: banking and finance, health care, high-value business services such as accounting and legal services, and the biotech industry, which businesses like Monsanto Co. and DuPont Pioneer contribute to.
The numbers are good news for Des Moines. They are not such good news for much of the rest of the state (other than the Cedar Rapids-Iowa City area, which is also performing very well, Swenson said).
What’s going on?
OK, so rural Iowa is struggling to maintain its skill-applying population of 35- to 44-year-olds, but why? Swenson’s take: It’s partly the dynamic of urbanization over time, and the desire of people to have access to the amenities that urban areas provide.
From a workforce development standpoint, “Iowa’s economy as it’s structured can’t keep a lot of its more skilled workers,” Swenson said. “First of all, they do migrate into the metropolitan areas. But on a statewide basis, they also migrate out of the state of Iowa. ... We just educate the hell out of people, and then they leave. And they don’t leave because they don’t love us. They leave because we can’t use them.”
That doesn’t mean small towns are going to cease to exist, Swenson said. He points to regional trade centers such as Fort Dodge and Mason City and says they are always going to be relatively healthy small regional economies, but at best they will hold their own.
Projecting how the numbers will change from 2010 to 2020, Swenson said that the big gap in employment statewide will be in the 45- to 54-age group due to the loss in the 35- to 44-age group last decade, though the 35-to 44-age group should rebound this decade.
For the metro areas, and especially Greater Des Moines, the ability to attract young workers is paying dividends for the workforce.
“The continued ability of the metropolitan areas to attract young workers who are either skill-acquiring or just getting out of college, that is by far the biggest asset the state of Iowa has going for it right now in our metropolitan areas,” Swenson said. “As long as we continue to attract those workers, trust me, firms are going to continue to figure out ways to use them.”
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