Monday, March 24, 2014

25% Of South Dakota's Vo-Tech Grads Leave The State. I Wonder Why. The Latest Dakota Poll Gives A Clue.

     "The issue of workforce continues to be a major challenge for our state."  So said Governor Daugaard in his State of the State speech last January.  He went on to note that "it's difficult for employers to add more jobs even if they have the business to justify it."  Daugaard promised to create "workforce summits" throughout the state, bringing business and community leaders together to discuss the situation. This doesn't sound like the most concrete initiative imaginable--talk is easy and talk is cheap.  Nonetheless, If action follows chatter I'll be the first to note and applaud.  So far, in the realm of action, Daugaard's failed and costly (to the tune of $1 million) New South Dakotans initiative, designed to entice skilled and well-educated workers to South Dakota has been the most visible effort put out by the Daugaard adminsitration. He has also carried on the Dakota Roots program that claims to have brought 3,000 former South Dakotans back to their home state since 2006, which amounts to fewer than 400 a year. Daugaard considers this a "great success."  Ohhh-kay.  I guess "success" is in the eye of the beholder.
     In this beholder's eye, though, I have my misgivings.  For one thing, today's data from the South Dakota Technical Institute's Placement Report For 2013 Graduates notes that nearly 500 of those graduates who found jobs weren't placed in South Dakota.  That's about 100 more than came in through the Dakota Roots program, based on DR's 8-year average.  To my way of thinking that's a net loss.  For another, the wage differentials between South Dakota and its neighboring states must make it nearly impossible to convince those seeking financial and professional opportunity to either return to South Dakota or migrate here in the first place.  The U.S. Bureau of Labor Statistics shows that SD's mean wages are significantly lower than those of our neighboring states.  Of some interest, scanning the Placement Report will show that the biggest out-migration of Vo-Tech grads is concentrated at Southeast Tech in Sioux Falls, which is a short hop from Iowa and Minnesota, where both median and mean wages outpace South Dakota's by thousands of dollars a year.
     Some will try to explain this disparity away as a cost-of-living differential reflected in wages, to which I say, no way.  The Council for Community and Economic Research, whose ACCRA data is used by the U.S. Census Bureau, says that South Dakota ranks 31st in the country when it comes to cost-of-living. We're in the middle of the pack, cost wise, but at the back of the pack, wage wise. Those who would complain about the credibility of ACCRA have a formidable task and need to bring some peer-reviewed contra-data to the discussion if they want to mount a challenge to it.  The fact is, we pay lousy wages in South Dakota and that's why we have a difficult time filling jobs.
     More concerning to me is the way I've seen so many outstanding young people take off as soon as they finish high school or college.  Anecdotal as it may be, I think there's some confirmation about it being a common aspect of growing up South Dakotan.  Certainly the fact that a quarter of last year's Vo-Tech grads left the state is a telling example.  A Dakota Poll that came out yesterday gives some confirmation about young people and their attitudes toward remaining in South Dakota.  Dakota Poll board member Sam Hurst said in a KOTA television interview that the economy could force those with higher education to leave the state.  Hurst notes that "having economic security, that's their greatest fear. That they can't get that in South Dakota."
     We'll see if Governor Daugaard's "workforce summits" will address this situation head on.  Leading up to the election they could be more show than tell, but at some point the low wage issue has to be addressed. It's either that or continue to complain about what should be labelled a wage--not a labor--shortage.
      


6 comments:

  1. John, As I commented on an article on this topic, a good share of those who do stay here, do so for the Walleye fishing and pheasant and deer hunting. But the day will come if we continue down the path that we are on, that is not going to be enough, eventually. It is already at a crisis level when it comes to school teachers. We often hear of the fact that South Dakota teachers are the lowest paid in the nation. WHat is overlooked is that the gap is growing, not shrinking. I remember a couple or few years ago hearing that the gap was 5K less than the next lowest paid state, ND. Today, it is 10k lower than ND and ND is still the 49th in the mid 40s pretty comparable to several other states. Pretty soon all that South Dakota will have left, is rich folks and old codgers like me. Thanks for a great article.

    ReplyDelete
    Replies
    1. Yeah, Lanny, a great outdoor lifestyle has plenty of appeal, but that isn't enough for many ambitious and bright younger people, who have their own worlds to conquer. Meantime we're reduced to failed attempts at marketing the state to potential residents with some skills and education. This picture is very wrong. Appreciate the comment.

      Delete
  2. I agree with your point John.

    Lanny, hunting and fishing popularity is dropping like a rock, even in a state like MN which cherishes its outdoor heritage. Numbers of game hunters and fishers has been dropping for several years. MN makes a sizable investment in both, with a specific tax earmarked only for the outdoors and arts. Still, numbers diminish. I think SD's outdoors is an insignificant draw.

    Other things that are attractive to a higher educated workforce aren't available in SD. I'm talking about arts, creativity, sciences, challenging intellectual pursuits, etc. I can attest that in the MN metro area SD is perceived as insular, closed off, very unwelcoming.

    ND has a better reputation, excluding the big draw of oil patch pay. MN has a closer connection to Fargo especially, than SD and Sioux Falls. Fargo and ND stories are not unusual in the local daily, but SD is quite rare. In fact, the las time I recall SD on the front page is when football player Adrian Peterson's child died in Sioux Falls. I think that was last summer. Fargo has a vibrant and interesting arts community, a lively and respected gay sector, etc.

    SD's terrible education system is a big negative too.
    These things all make a big difference in the decisions of prospective immigrants.

    ReplyDelete
    Replies
    1. Agree with all that, Deb. Adding "lowest teacher pay in the nation" and "lowest wages in the region" to SD's calling card makes for a couple of nasty blotches to our state's public appearance. Our elected officials keep touting economic and workforce development but can't seem to understand the self-crippling nature of our handicaps. Appreciate the comment.

      Delete
  3. Amen! I am so tired of hearing that our wages are so low because our cost of living is so low. I remember moving here from the Twin Cities (many years ago) and having sticker shock at some of the food prices here while making about 1/3 less money than I was in Minnesota. And Deb, great point about the arts and cultural opportunities. Those are very important aspects of making a community a great place to live, and there is very little appreciation for that fact when it comes to handing out the funding.

    ReplyDelete
    Replies
    1. Correct, SDLady. I believe Governor Daugaard needs to put together a comprehensive plan for workforce development that includes enhancing cultural and educational assets that would help sell South Dakota as a great place for individuals and businesses to locate. It would take time, but certainly add to his legacy as a pro-active chief exec who made a real difference to the way his state looks and operates. Thanks for posting.

      Delete