Laborshed wages are calculated based on an employment area's actual commuting patterns and exclude retail and healthcare wages, among others; the resulting wage is more representative of a true starting wage for the types of businesses eligible for assistance.
- Jobs must pay a starting wage of 100% of the laborshed wage and will reach 120% within three years (by the end of the contract performance period)
- Projects in counties that are determined to be in an "economically distressed area", jobs only need to meet the 100% laborshed wage threshold through the life of the project
- Projects receiving funding through the Economic Development Set Aside (EDSA) program must meet the 90% laborshed wage threshold
How to Find Wage Requirements
Laborshed area - geographic area surrounding an employment center from which the employment center draws commuting workers. The Iowa Department of Workforce Development (IWD) determines the employment centers and defines the boundaries of each laborshed area. IWD defines laborshed areas by surveying commuters within the various zip code areas surrounding an employment center, combining the zip code areas into as many as three zones, and determining how many people commute from a zip code to the employment center from each zone. The zones reflect the fact that as the distance from an employment center increases, the number of people willing to commute to the employment center decreases. When determining the applicable laborshed wage, the Iowa Economic Development Authority (IEDA) will use the closest laborshed area, as determined by road distance between the employment center and the zip code of the project location.
Laborshed wage - same as defined in Iowa Code section 15.327. The IEDA will calculate the laborshed wage as follows:
- Most current covered wage and employment data from IWD used
- Wage computed as a mean wage figure and represented in terms of an hourly rate
- Only wages paid for jobs performed within the first 2 zones of a laborshed area included
- Wages paid in government, retail trade, heath care and social assistance, and accommodations and food service will be excluded from the calculation
- If laborshed area includes zip codes from states, wages paid in those zip codes may be included if IWD has a final data sharing agreement with the state and has required data
- Only wages within 2 standard deviations from the mean wage included
Economically distressed area - a county that ranks among the bottom 33 of all Iowa counties, as measured by either the average monthly unemployment level for the most recent twelve-month period or the average annualized unemployment level for the most recent five-year period.