Governor Daugaard's State of the State speech in Pierre yesterday took another stab at dealing with the shortage of skilled workers in South Dakota. Having given up on the state's New South Dakotan program that burned through $1 million while it coaxed a mere 100 workers into South Dakota, the Governor's new emphasis will turn to selling former South Dakotans on the benefits of moving back here via the Dakota Roots program. Okay, it's worth a try. After all, the Governor thinks the idea is sellable because, as he said yesterday 1) "Our per capita income now exceeds the national average", and 2) "the average South Dakotan earns about 3.8 percent more than the average American." Wow. You'd think we'd have a labor surplus, not a shortage, with those kinds of numbers. I have no reason to believe that Daugaard was fudging, but when I see data extended over per capita numbers or further spread out as averages, I admit to being dubious. Take "per capita" for example. 1 guy makes a million bucks while 9 others make a buck. Per capita income is $100 thousand each. Averages can give you the same unrealistic picture. Take a hundred people. Have one guy make a million bucks while all the others make $10 thousand. Average income for that group is $20 thousand.
My curiosity piqued, I just went to the Governor's Office of Economic Development website to see what I could dig up from Pierre's perspective. You can read it here. Sure enough there's a glowing conclusion "based," as it says "on data from the U.S. Department of Labor," that the GOED uses to tout that "we as state can and do compete in offering jobs that pay living wages.” This is a misleading claim, based on data whose methodology seems questionable, particularly with respect to its conclusions about average wages here. Consider that the GOED itself, in the same press release acknowledges that, "in addition to the GOED study, the U.S. Labor Department report included analyses of
personal income, using varying methodologies. In that study, South
Dakota ranked 50th in average wages and salaries for employees. When all
personal income is included, such as that of self-employed farmers and
small business owners, South Dakota’s ranking increases to 37th." This is an amazing juxtaposition, actually, with the State of South Dakota claiming it can compete in the labor market, even as two studies conducted by a federal agency rank us 50th and 37th, respectively, when it comes to measuring personal income.
Sorry, Governor Daugaard, I'm just not buying the claims that you made of SD being competitive in the labor market during yesterday's speech. But back to the conundrum that I referenced at the top of the page. Given that skilled workers have shunned the idea of relocating to South Dakota even after we spent a million bucks trying to entice them to come here, why do you expect South Dakota-trained workers to stay here after they've obtained their skills, which seem to be more valuable in many, many states than they are in South Dakota? I understand you'll kick in $5 thousand toward their tuitions if they agree to stay and work in South Dakota for three years after graduation, but honestly, if these jobs are worth, say, $50k to $100k a year, seems to me that the $5k enticement, spread out over three years, is little more than chump change to them..
I admire and support Governor Daugaard's efforts at building up South Dakota's labor force, but as with every business or economic consideration, we have to stare reality in the face. In this case, we have to conclude that reality means we just don't pay enough money to attract a sizable force of skilled workers into South Dakota. I hope that the Governor and his economic development schemes focus more on finding ways to raise wage levels in this state, less on kidding ourselves about where we stack up when it comes to paying people for their skills and labor.