CITY NOTES: The Floyd County manufacturing sector is robust

By Tim Fox  |   Charles City Area Development Corp. executive director

This column addresses manufacturing operations and employment to a great extent. This is partially due to the fact that this is my job, but also because manufacturing success is integral to a prosperous economy.

Erik Reinert in his book “How Rich Countries Got Rich … And Why Poor Countries Stay Poor” notes that manufacturing success is a stimulus for wealth and power. The first country to rise to power via manufacturing prowess was England in the 19^th century, followed by the United States, USSR, Germany and Japan in the 20^th century. The same is true this century as evidenced in the increasing industrialization of Korea, Taiwan and China.

Another reason why manufacturing is crucial is that it by definition produces goods. According to the World Trade Organization, 80 percent of world trade is in goods – which means 20 percent is in services. Joe Rynn, in writing for the Roosevelt Institute, states, “Services are mostly the act of using manufactured goods. You can’t export the experience of using something. Retail and wholesale, which make up about 11 percent of the economy, are the act of buying and selling manufactured goods. The same goes for real estate, another 13 percent, which is the act of buying and selling a ‘real’ or physical asset, a building. Even health, which makes up about 8 percent of the economy, is the act of using medical equipment and drugs.”

Finally, according to the Economic Policy Institute, each manufacturing job supports three other jobs in the economy. 

“Most jobs, directly or indirectly, depend upon manufacturing” says Rynn.

We rely upon the “Quarterly Census of Employment and Wages” [QCEW] compiled by Iowa Workforce Development in gauging how our county-wide economy is functioning. We review these figures quarterly and try to explain quarter-to-quarter and year-over-year variations. Remember that Floyd County is a comparatively small economy so any negative impacts are magnified. We strive to anticipate such events and devise means to counter them.

Peak Floyd County manufacturing employment since 1990 occurred in 2008, with a count of 1,431. The 1^st quarter 2016 count (the most recent dataset available) showed a tally of 1,377. So, manufacturing employment in Floyd County is near an all-time post-White Farm Equipment high. That we have been able to overcome the loss of 375 jobs at Winnebago Industries, Inc. in 2008 is a testimonial to our local businesses and the resolve of the community. When we compare this to the first quarter of 2011, Floyd County manufacturing employment rose 44 percent (959 to 1,377). During the same period manufacturing employment in Iowa rose 5.4 percent — so we have outperformed the rest of the state over the past five years.

The average manufacturing weekly wage in Floyd County went from $1,029 in 2011 to $1,287 in 2016.  This is a 25 percent increase. If we extrapolate the weekly wage over the year, it totals $66,924. This is certainly a livable wage. Furthermore, the 2016 average manufacturing wage for Iowa was $1,033.  This is a remarkable attribute — that the average manufacturing wage in Floyd County eclipses the average wage for Iowa by 25 percent — especially given that we are a rural county in competition for commerce with more industrialized and unionized communities.

It should be noted that these numbers may be skewed by the fact that the first quarter is always the busiest in manufacturing in Floyd County. For some reason, this is when overtime is most prevalent.  However, one may presume that the same is true for the remainder of Iowa. The average manufacturing wage in Iowa increased merely 11 percent from 2011 to 2016.

First quarter 2016 showed that the number of jobs in Floyd County increased 11 percent from 2011 to 2016 – 5,242 to 5,830 – while the state demonstrated a 7 percent increase. The average weekly wage in Floyd County for all jobs increased from $626 to $744, which is 19 percent. The state of Iowa averages went from $737 to $844, or 15 percent.   

Conclusions to be drawn are that Floyd County is outperforming expectations in the manufacturing sector while lagging behind Iowa in the other occupational classifications. This lag is not unexpected, given the rural nature of the area, but we are showing promise over time in becoming more competitive in this milieu. We should be grateful that we have stable, profitable and progressive manufacturers leading the way.   

Tim Fox is the executive director of the Charles City Area Development Corporation. He can be reached at 641-228-3020 or email at tfox@charlescityia.com.

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