Labor Pinch Has Midwest Pitching Woo

After assembling 500 former Iowans at the Riviera Country Club in Pacific Palisades and serving them Iowa-made beef, turkey and cheese, the Hawkeye State’s governor made his plea.

Remember when life was simple, the commutes short and the public schools good? asked Gov. Tom Vilsack. Beckoning them to a new Iowa economy, he said: “Iowa remembers you, misses you and needs you.”

And how.

Iowa, unemployment rate 2.2%, is so desperate for workers that it has come to California to recruit its faraway sons and daughters. And Iowa is not alone.

Nebraska and other Midwestern states and cities, through letters, Web sites and ads in alumni magazines, also are foraging for workers in California, targeting the one group they figure is most likely to move to the Great Plains: those who grew up or went to college there.

Their efforts reflect the worsening labor pinch from the nation’s long-booming economy, particularly in the Midwest. That region’s jobless rate is nearly a full percentage point below the nation’s, which itself has been hovering at a generation-low of just over 4%. And the Midwest’s population growth remains anemic.

“We’ve been at 1.6 million people forever,” said Al Wenstrand, economic development director for Nebraska.

Nebraska has sent a recruiting mission to a University of Nebraska alumni gathering in Ontario, and another one to reach out to former Nebraskans in Orange County.

Nebraska has been touting its lower costs and better schools--the same selling points employed earlier this decade by Western states to successfully lure scores of California businesses.

Kent, 43, and Marcie Jorgensen, 38, are converts. They just sold their Laguna Niguel home and are moving back to Lincoln, Neb., after eight years in California. Marcie Jorgensen said her husband, a mortgage broker, had become disenchanted with California’s lavish lifestyles. “There’s more of a sense of community there,” she said of her native state.

But thus far, the Midwest’s biggest success in attracting Californians generally has been with older folks, government reports suggest. And that’s not whom the Midwest needs.

The latest campaigns by Nebraska, Iowa and others are being led by government-business partnerships and directed at young, well-educated expatriates who are needed for emerging technology-based economies in the Midwest.

Most Central states have already tapped the potential work force at home and have done what they can to keep young graduates from leaving. But the East and West coasts, especially centers of the new information economy, continue to tug at the young and the skilled in middle America.

In trying to raid California, no state has been as aggressive as Iowa.

Ted Habte-Gabr, president of the Iowa Club of Los Angeles, an alumni chapter of the University of Iowa, says he has received one letter after another in the last year from Iowa officials urging him to come back. The 31-year-old marketing consultant hasn’t been swayed, but he says that’s more a reflection of the stage in his life than anything else.

“I tell you, if I had kids and was looking for good schools and values, nothing beats the Midwest,” said Habte-Gabr, who still visits Iowa a couple of times a year. Then again, he visits only in the spring and fall. “They can have their summers and winters,” he said with a hearty laugh.

Habte-Gabr says his Iowa Club has about 4,000 members. But that’s just a fraction of the countless graduates of Iowa schools living in California. For decades, Iowans by the thousands used to gather at an annual picnic in Long Beach, which they called “Iowa by the Sea.” From there and throughout California, Iowa’s governor and businesses want to pluck the young and the skilled.

But Iowa’s biggest hurdle, apart from the weather, which officials hopelessly concede they can do nothing about, is the lingering perception of the Midwest as small-town America offering few careers outside of farming.

A Need for Workers in Technology Fields

The Midwest still relies more on farming than do other regions. But though it lags in the share of jobs in information technology, some of the region’s fastest-growing companies are in promising industries such as software and genetics. Even traditional Midwestern manufacturers, which restructured during the 1980s, employ far more high-tech workers today.

“Unfortunately, we don’t do a very good job selling John Deere as a technology company,” said Mike Avgenackis, human resources manager at Deere & Co., the 162-year-old farm-equipment maker based in Moline, Ill., which has extensive operations in Iowa. Deere has dozens of openings in engineering, software and computer systems in the Midwest. Some of them have been vacant for nearly a year. “We’re losing young people to Intel or Motorola . . . in sexier industries,” he said.

Avgenackis remembers when young, technically skilled Midwesterners left in droves in the 1980s because the region’s economy was so weak. Many of them came to California to work in what was then a booming aerospace industry.

“They are a group of folks we’d like to get back to the Midwest,” said Avgenackis, who was among two dozen employers with the governor at the Riviera Country Club.

With labor markets tight and wages and incomes growing, Midwesterners aren’t fleeing as fast as they used to. But the region is still losing many young, educated people to California and other coastal states. Meanwhile, except for Chicago, the Midwest gets few of the nation’s immigrants. And the region’s baby boomers will begin retiring before long.

As a result, the Census Bureau is projecting the Midwest population to grow by at most 10% by 2015--or less than 1% a year--compared with a projected growth of as much as 45% in the West.

“It’s an uphill struggle,” said William Testa, a regional economist at the Federal Reserve Bank of Chicago.

But Testa thinks that mid-size cities in the Midwest, such as Cincinnati and Des Moines, could continue to grow largely because of their comparatively low living costs and other quality-of-life advantages. Moreover, he said, if the Midwest can build hotbeds of high-tech enterprises, as many are trying to do, they will be able to attract workers, as do Silicon Valley or Austin, Texas.

Making an Investment in the Future

But until then, businesses and government officials in the Midwest may have little choice but to press on with their please-come-home campaigns.

“We know Iowa kids will graduate and move to California,” said David Lyons, Iowa’s economic development director. “But we also know that in five or 10 years, when they have young families, they may have more interest in spending two hours in the backyard with their kids instead of in traffic.”

The reception at the Riviera Country Club, he said, was a way to stay in touch with those people. And to give them a taste of what they were missing, Iowa officials prepared quite a spread that evening, at a cost of $27,000, paid by privately raised funds.

In an elegant ballroom, serenaded by a live orchestra, the former Iowans feasted on Barilla pasta from Ames, Maytag blue cheese from Newton, tenderloins from Iowa corn-fed beef, even milk and orange juice from Des Moines.

Tim Park, 32, was so taken that after the reception, he and his newlywed wife, a Wisconsin native, talked about relocating to Iowa on the drive back home to Pasadena.

But it wasn’t a long discussion, said Park, who came to California 10 years ago to work alongside his college buddy at Gunderson Nissan, where Park is general sales manager.

“In the long run we might consider it,” he said. “But it’s too cold. It’s not like we’re going to pack up our bags and go right away.”