"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.