Gov. Reynolds launches unemployment changes, new grant programs

Gov. Kim Reynolds announced two new workforce initiatives Wednesday: a grant program for manufacturing companies and a new unemployment management system.

Reynolds, speaking from a manufacturing plant in Adel, cited Iowa’s $1.2 billion surplus and strong growth rate as evidence of “economic vitality that many of our other states can only envy.”

“The workforce shortage is the primary obstacle standing in the way of really turning that encouraging, short-term trajectory into long-term, broad-based progress,” Reynolds said.

State offers $30 million in manufacturing grants

Iowa will allocate $30 million of federal American Rescue Plan funds toward grants for manufacturers in the state. 

“Unfortunately, this industry is rapidly approaching an acute crisis at the current rate,” Reynolds said. “They are estimating that there will be 2.1 million unfilled manufacturing jobs by 2030.”

Grants will be available for small to medium-sized companies, with between three and 250 employees. 

“We believe that between these two grant programs, it will stimulate tens of millions of investment from our companies in modernizing workforce and maximizing technologies,” Reynolds said. 

Tim Bianco, CEO of Iowa Spring Manufacturing, said he had struggled with labor shortages for years, even before the COVID-19 pandemic. He told reporters that he had attracted additional workers by offering higher wages and better benefits.

“We changed our starting wage scale a number of months ago, and it seems to have brought on a higher-skilled employee, and it opened the door for a larger mass to come in,” he said, noting that starting wages at the shop were above $20 an hour.

Changes on the way for Iowa Workforce Development

Reynolds also announced several changes to Iowa Workforce Development, the state agency that handles unemployment claims.

“The agency’s primary focus will be on rapid reemployment,” Reynolds said.

Beginning next year, IWD will assign case managers to unemployment claimants as they look for new jobs. People will have one-on-one contact with the case managers every week.

“The new technology IWD will utilize will compare individual work history with labor market information to proactively and systemically match claimants with open positions in their community,” IWD Director Beth Townsend explained.

Most claimants will also be required to search for four new jobs each week, rather than the currently mandated two. Townsend said she wants to “return unemployment to its original mission: a short-term, transitory program with a focus on reemployment as quickly as possible.”

“Unemployment benefits were never intended to provide long-term support,” Townsend said. 

The department will hire 18 additional employees to work as case managers. 

Democrat Sen. Nate Boulton issued a statement Wednesday objecting to the changes, arguing that “having the government assign jobs to Iowa workers is all wrong.” He urged Republicans to focus instead on expanding child care, supporting essential workers and keeping small businesses open.