Thursday, November 6, 2014

South Dakota's Labor Shortage Is Symptomatic Of A Much Larger Problem

     Not sure why and how Philadelphia's Drexel University sought to do a study on South Dakota's labor markets earlier this year, but study us they did.  In a long (101 pages) and data-filled (it relies heavily on U.S. Census Bureau data) report dated February, 2014, university researchers drew some conclusions that say a lot about our state's labor force. I wonder if this is what Governor Daugaard read earlier this year when he deemed the labor shortage in South Dakota a top priority and has taken some steps to alleviate it. Daugaard also held a series of "workforce summits" throughout the state this year, drawing the results into a report that falls far short of its potential, considering that it ignores one of the most important elements of job development in this state:  our low wage structure.
     Anyway, the Drexel U. report's findings are sobering and probably something of an indictment of the kind of leadership we've been experiencing in our Republican-dominated state government for, oh, the last umpteen number of years. I believe the state's relentless focus on making us a business-friendly environment has led to some mistaken assumption that low wages are a come-on for potential employers seeking to expand their businesses into South Dakota.  I think this is nuts, because low wages are consistent with slow growth environments, at least according to everything I've observed after living in both urban and rural states for about 7 decades. That the GOP pretty much ran the table in this week's low-turnout election says much about the general complacency that exists in South Dakota with regard to a labor and population situation that is trending in the wrong direction.  I believe Daugaard has sensed that the labor shortage is a sign that the ship is listing and that his sudden concern about it is a way of righting the vessel called South Dakota.  Reading this report, I can understand the Governor's urgency.
      According to the Drexel University report's executive summary, a labor shortage in South Dakota indeed exists. Later it observes that  "mismatches between the education, abilities, knowledge and skills of job seekers and those required by employers who want to fill specific occupational job openings" can play a role.  The study then proceeds to analyze a ton of demographic data to seek an explanation as to why our chronic labor shortage won't go away.  Among its findings: South Dakota ranks 4th among all states in the share (roughly half) of those born here who now reside in another state.  I have no clue what the mean percentage is among other states, but find it astonishing that half the people born in South Dakota now choose to live elsewhere.
     Conversely, South Dakota does have a population growth rate that is fairly strong.  Turns out that 38% of our population growth comes from in-migration. That's the good news.  The bad news? Our educational attainment of in-migrants compared to out-migrants is weighted heavily toward those with high school diplomas or less.  In other words, we're a net importer of those with h.s. diplomas or less, a net exporter of those with bachelor's and post-graduate degrees. Nothing against folks who for one reason or another couldn't get past high school, but you have to wonder what the draw is for them in South Dakota even as we have a net loss of college graduates in this state.
     We Republicans can rightfully hoot and holler about this week's smashing electoral triumph, but numbers like these are enough to pull the punchbowl out of the festivities.  Time to sober up, Pubs.  Our party has a state to run and a legacy to leave for those of our kids and grandkids who choose to remain here.

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