IE 11 is not supported. For an optimal experience visit our site on another browser.

Amid calls for Iowa to lose its caucus status, how would its economy fare?

"I think sometimes in Iowa, you’re worried that somebody’s going to come in and take something cool from you,” said one business owner.
Image: Local residents attend a campaign event for Democratic 2020 U.S. presidential candidate and former Vice President Joe Biden in Council Bluffs, Iowa, U.S.
Iowa creates almost $200 billion worth of gross domestic product and employs two million people across the state.Carlos Barria / Reuters

IOWA CITY, IA — Iowans are proud of the fact their state goes first in the presidential nominating process; they consider it a privilege. But this cycle, conversations around lack of accessibility for the caucuses and whether Iowa (a state that’s 90 percent white and mostly rural) is a good representation of the country has called into question whether 2020 might be the last Iowa caucus.

It was a warm September morning in eastern Iowa when Sen. Elizabeth Warren, D-Mass., ducked into Hamburg Inn No. 2 for a strawberry rhubarb milkshake. About 40 customers excitedly waited for a chance to say hello and for a selfie with the presidential candidate. But this wasn’t a random stop; it had been carefully orchestrated by advance staffers to put press with cameras in the best spot for the best shot.

“You’re going to do well here,” one man told Warren as she sat down to sip her milkshake. Photos of past presidential hopefuls loomed behind her: Ronald Reagan, Bill Clinton, and Tom Harkin among them. Stopping at the now famed restaurant is tradition — for politicians and voters alike, who stop in to cast their choice in the annual “Coffee Bean Caucus” �— when it comes to retail politics leading up to Iowa’s caucus, the first state in the presidential nominating process.

“Any time a candidate comes through, it’s directly good for business because it brings people into the restaurant,” the general manager, Seth Dudley, told NBC News. He says a busy January — normally a slow time for restaurants in Iowa — during the election years can earn the restaurant an additional $20,000 over non-election year. “And the free publicity that comes with it, our name being in the paper, you can’t beat it.”

January is normally a slow time for restaurants in Iowa, but during an election year, some restaurants can earn an additional $20,000.

With the caucus set for Monday night, more journalists, campaign staff, and caucus tourists are heading to the Hawkeye State. The going rate for a hotel room in downtown Des Moines (if you can find one) is about $500. The Des Moines visitors’ bureau predicts caucus activity will generate $11.3 million in economic impact for just the city of Des Moines in the week prior to caucus.

However, a bulk of campaigns and their staff have been here for close to a year, spread throughout the state. Of the eight campaigns that have held a steady presence in the state until now, most of them have more than 100 staffers and at least 15 field offices. Taking into account all the apartment and office leases, this equates to a little more than $1 million contributed just from campaign staff in a year — and that’s before the endless coffee stops, drinks and meals.

“We always joke that the caucuses are pretty much like our own special interest,” Mike Draper, the owner of “funny, Midwestern, and progressive” t-shirt shop, RAYGUN, told NBC News. The shop sees an uptick in sales by about 25 percent during election years. “It’s not going to sink the company to not have this big event every four years. But, I think sometimes in Iowa, you’re always worried that somebody’s going to come in and take something cool from you.”

“It is a concern; we’d hate to lose the caucuses,” Greg Edwards, the president of Catch DSM, the tourism bureau for Des Moines, said, noting that the candidate visits are helpful for business in both larger liberal cities in addition to smaller rural businesses. “Iowans are pretty well educated on the political process, they study the candidates and we are genuinely interested in their views and who they are.”

Caucusgoers around the state told NBC News they understand the argument against Iowa going first, but they don’t want anything to change.

“With the base of the Democratic Party moving away from those white rural areas and more into voters of color, younger folks or college-educated folks, probably not the best idea to have Iowa be first,” 17-year-old Matthew Kolb from Lamoni said, “But I do like it because I benefit from it.”

“I am sympathetic of the argument that Iowa is not representative of the country as a whole and gets outsize influence because it's first,” said Alex Rannow in Marion. “But that’s not my fault. I’ll take it.”

Iowa creates almost $200 billion worth of gross domestic product and employs two million people across the state.

David Swenson, an associate scientist in the Department of Economics at Iowa State University, pushed back on the importance of the influx every four years, pointing out that Iowa creates almost $200 billion worth of gross domestic product and employs two million people across the state.

“What we get out of it isn’t the tangible economic rewards of our economy being boosted,” Swenson said, “What we get out of it is the fact that people utter the word ‘Iowa’ over and over and over again, generally in a positive light.”

“I mean, it’s great for business but it’s not make or break,” Dudley acknowledged back at Hamburg Inn No. 2. “It’s not what keeps us afloat, but it’s just a nice lift every four years.”