Cedar Rapids Profile

December 2, 2011

Where is Cedar Rapids, Iowa?

Cedar Rapids is the second largest city in Iowa with 126,326 residents (2010 estimate) and is the county seat of Linn County. Cedar Rapids is located on both banks of the Cedar River and uniquely positioned 20 miles north of Iowa City and 100 miles west of Des Moines – two economic hubs for the state.

Why was Cedar Rapids, Iowa chosen for the study?

Cedar Rapids, like many other industrial cities nationwide, has experienced a significant decline in its manufacturing employment base over the past 50 years. In 1960, 38 percent of the city’s population was employed in manufacturing; by 2009, only 18 percent of workers were employed in manufacturing. Our goal is to examine how Cedar Rapids has responded to this shift over time.

Cedar Rapids experienced a catastrophic flood in 2008 — what was the impact and how did the government respond?

On June 13, 2008, the Cedar River inundated ten square miles of Cedar Rapids, damaged 7,749 parcels of land, and caused the evacuation of 20,000 people. Of the facilities flooded, 310 were City-related, requiring an estimated $500 million in repairs. Another 486 units were other property-tax-exempt facilities, such as other government offices, schools, churches, and nonprofit facilities. Overall, workers eventually removed 41,771 tons of flood debris. Simply put, the downtown area was decimated. Thankfully, there were no flood-related deaths.

Following the flood, the City was able to attract myriad public and private funds from federal, state, and local sources. Other efforts were to establish high-quality job creation (defined as permanent positions, not temporary); increase the tax base; assist any businesses with a demonstrated financial need; build quality future growth plans for services and infrastructure; and engage seasoned developers with past success on similar recovery projects. Much progress has been made since that time, but more is left to be done. One significant remaining hurdle is that federal relief dollars in the amount of $300 million owed to the City of Cedar Rapids remained outstanding at the time of our interviews in July 2011. Local officials believe that while the flood was devastating, it actually helped to re-invigorate economic development throughout the region. 

What is a labor shed and why is it important to Cedar Rapids’ economic development?

A labor shed is defined as the area or region from which an employment center draws its commuting workers. Cedar Rapids, along with Iowa City, comprises the Technology Corridor Labor Shed, – which draws workers from nine surrounding counties. Labor shed analyses address underemployment, the availability and willingness of current and prospective employees to change jobs, current and desired occupations, wages, hours worked, and distance people are willing to commute for work. Iowa Workforce Development, a state-sponsored agency that contributes to the economic security of Iowa’s workers, businesses and communities through a comprehensive system of employment services, education and regulation of health, safety and employment laws estimated that Iowans were willing to commute an average of 21 miles one way for better employment opportunities in Cedar Rapids.

How has Cedar Rapids changed since 1960?

According to officials, even prior to the flood in 2008, the City had been utilizing tax incentives for economic development, since 1980 in fact, with the creation of the five-year program known as the Industrial Property Tax Exemption. Over the past ten years, the city has offered increasingly generous incentives in Urban Renewal Areas (there are 11 targeted districts). During that time, $31 million in economic incentives have been invested: $162 million in private investment dollars in new facilities, equipment, and technology; retention/creation of over 6,300 jobs with an annual payroll of over $160 million; and funding of over $30 million in public improvements including streets, utility extensions, and recreational facilities.

What does the current labor shed look like?

Due to targeted diversification efforts, product manufacturing is no longer the top industrial classification of employment in the current labor shed. It ranks third behind health care/social services and education, which are first and second with 18.1 and 17.0 percent of those employed, respectively. Other interesting quick facts on the labor shed: 10.6 percent of workers have multiple jobs; the average worker is 42 years of age; and an estimated 5.3 percent are underemployed. Rockwell Collins, Inc., which focuses on electronic equipment and design, continues to be the largest employer with 8,700 full-time equivalent workers in 2011.

The views expressed in this post are our own and do not reflect those of the Federal Reserve Bank of Chicago or the Federal Reserve System.


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