Iowa finds unemployment buster

BY TESSA McLEAN | MARCH 24, 2009 7:30 AM

The UI, Iowa State University, and the University of Northern Iowa are doing more than educating college students — they may be helping Iowa survive during tough economic times.

Three Iowa cities placed in the top 10 with lowest unemployment rates in the nation, according to figures released by the U.S. Labor Department last week. The three metropolitan areas — Iowa City, Ames, and Cedar Falls-Waterloo — each house one of the state’s public universities.

While Iowa had three in the top 10, no other state had two cities in the top 20 of areas with lowest unemployment.

UI spokesman Steve Parrott said he didn’t know how much longer low unemployment rates will last because of state budget cuts, but the university helps keep Iowa City stable.

“All these people that [the UI pays] pay taxes and do business here in Iowa City. It has quite an effect of creating other jobs for other people,” he said. “We are all in it together, the fact that the university can create so many jobs beyond what we get from state funding is pretty amazing.”

Beyond the university employing large numbers of workers, UI students contribute to the economy by spending money and living in the city, Iowa City City Councilor Mike O’Donnell said.
“The university is a huge economic tool,” he said, and Iowa consistently sees low unemployment. “We are a state that’s been run very, very well.”

O’Donnell noted the presence of the Iowa City Veterans Affairs Medical Center and UI Hospitals Clinics as other great employers.

In January, the national unemployment rate rose 3.1 percent compared with that month the previous year. But Iowa remained in the top 10 of states with low unemployment.

Gov. Chet Culver’s press secretary, Troy Price, said that though Iowa has one of the nation’s lowest unemployment rates, the governor is still striving to put jobless Iowans back to work. Culver’s IJOBS plan — a $750 million bonding proposal that would invest in Iowa’s crumbling infrastructure and create jobs — is awaiting approval from the state legislature.

Nationally, unemployment rates were higher in January compared with the same time in 2008 in all but one of 372 metropolitan areas in the nation. Cedar Falls-Waterloo was the only city to maintain the same rate at 4.4 percent.

“It is one more sign that our world-class regents’ universities are the engines that help keep our economy running.” Price said in an e-mail.

Iowa City Mayor Regenia Bailey said universities and health-care units are industries less affected by a struggling economy and Iowa City is lucky to have both.

“It is sort of an insulating factor,” she said. “People continue to consume higher education even in a difficult economy — some might even go back to school.”

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