Here's a fact about the labor market we South Dakotans might have trouble grasping: nationwide, rural unemployment is higher than urban unemployment. Rural watchdog Daily Yonder provides this map:

Created by Daily Yonder from Bureau of Labor Statistics -- click for interactive map

In February, urban (or metropolitan) unemployment stood at 8 percent, according to data released Wednesday (April 10, 2013) by the Bureau of Labor Statistics.

In so-called micropolitan counties — those with cities between 10,000 and 50,000 — unemployment in February stood at 8.5 percent. And in rural counties with towns below 10,000, the unemployment rate was 8.9 percent [Bill Bishop, "Rural Unemployment Surpasses Urban Rate," Daily Yonder, 2013.04.15].

South Dakota and much of the Great Plains look like glaring exceptions to that phenomenon. Across South Dakota, unemployment sat at a nonseasonally adjusted 4.9% in February. The only counties exceeding the national average are Indian Country, where the official unemployment rates are more indicative of national conditions and where the situation is much worse when you count the high percentage of adults not in the workforce.

The Great Plains derives this advantage in part from one dismaying statistic: lower population growth. Job growth may not be great here, but with population flat or dwindling in our rural counties, fewer people are competing for the jobs that do come up.

But compare urban to rural within South Dakota, and we find a slight urban jobs advantage as well. Our two biggest cities, Sioux Falls and Rapid City, had total unemployment of 4.7% in February, two ticks below the state average. Unemployment in our eleven largest cities and towns, from Sioux Falls to Spearfish, was 4.8% in February. Our big towns outperform our small towns in putting people to work.

These data suggest that the Governor's Office of Economic Development needs to pay a little more attention to creating jobs in our rural counties instead of doling out all of  its favors to the big towns.

The Oligarch?

Spearfish holds its city election Tuesday. My neighbors have two choices for mayor: three more years of Mayor Jerry Krambeck, who has held the position since 2000, or political newcomer Dana Boke, who says Krambeck runs an oligarchy that she will overthrow with a new regime of managerial listening and collaboration.

The Pretender

Always eager to overthrow oligarchy, I have read Dana Boke's campaign website and Facebook page. I listened closely at the Spearfish candidates forum March 27.

Dana Boke is full of crap, and she's not a good crap salesman. I know, because she sounds a lot like me... in eighth grade.

In 1984, the Presidential election had my friends and me spouting some kind of political nonsense (yes, some things never change). Our eighth grade teacher, Cheryl White, indulged us one day and permitted some sort of political speeches during class. One of my friends stood up and recited things he'd heard from his parents and TV about Ronald Reagan. I stood up and preached Quadism.

What the...?!

Oh, Quadism was a new party, a new movement. The Republicans and Democrats were old parties, like an old tree that would snap and topple in the winds of change. But Quadism was a young tree, able to bend and withstand the tempest.

I didn't actually say tempest in Miss White's classroom, but (memo from time-traveling self) I should have. Tempest would have fit the sound, the tone, the rhetorical force I heard echoing in my imagination. I wanted to rouse the crowd through metaphor and familiar memes (another word we didn't know in eighth grade)... because I had no clue what I would do if I were President or Congressman or any kind of practical policymaker.

Neither does Dana Boke, and she's not an eighth grader. She's applying to be mayor of South Dakota's eleventh-largest and first-prettiest (you want to rumble?) city, and when asked to define the most important role of the mayor, she says something about being a "cheerleader of sorts," then struggles to stammer out a vague patchwork of her own campaign slogans:

Good night, Dana! You're applying for a job. It shouldn't be that hard for you to lay out your two-minute understanding of that job. And if you really think the mayor's main role is cheerleader, you'd better discover the key to good cheerleading: enthusiasm!

Boke returns in almost every statement, live and online, to her main selling point: change.  I've heard people in Spearfish say they're ready for change, too. But change to what? A bunch of dull management seminar rhetoric? Listening to Dana Boke makes me feel like I'm at a really bad school in-service: she says a bunch of carefully crafted words, but when she gets done, she hasn't really said anything.

None of Boke's public statements have included any examples of the strongarming, the not-listening, the personal agendas, or the oligarchy she says she's fighting. The suggestion that you fight oligarchy by replacing a janitor with a banker is first-blush laughable. Boke could stave off my laughter if she'd name names: tell us who the oligarchs are, what harmful agenda they're pushing, whom they've strongarmed, whom they've favored, and what policy changes you'll make to end that oligarchical favoritism.

But no. The only vaguely specific policy statement Boke has made actually sounds like more oligarchy. Boke says she wants to increase funding to the Spearfish Economic Development Corporation so it can be "proactive" instead of "reactive" (yeesh—more empty management-speak). Boke is a professed fiscal conservative advocating more government spending on crony capitalism... even though Spearfish rocks the socks off other communities that spend much more on economic development.

Dana, I'm from Madison. I know oligarchy. I know the damage oligarchy can do to economic opportunity and local culture. If an oligarchy is harming Spearfish, then by gum, we need to change it. Spearfish neighbors, I urge you to vote for a knowledgeable, forceful leader who can make that change.

Alas, Dana Boke's flat version of my eighth-grade political speech about change shows she's not the leader we oligarchy fighters are looking for.

*   *   *

Disclaimer: Jerry Krambeck paid me money to build his campaign website. His money does not buy him my opinion on the Madville Times.

Mr. Mercer points out an important problem with our system of "university centers," the three facilities created to serve major populations removed from our actual university locations. He notes that to keep these classrooms in Sioux Falls, Pierre, and Rapid City from bleeding dry our our university towns' economies (because South Dakota's education policy is first and foremost about economic development, not enlightenment), we charge university center students an unsubsidized tuition rate of $289 per credit hour. Regular on-campus university undergraduates pay $124 per credit hour.

Board of Regents finance chief Monte Kramer reminds Mercer that university center students don't pay university support or activity fees, which bring the on-campus price for a credit hour to $244.58. Multiply the difference by full-time load of 30 credits, and you'll save $1350 by hauling you keester up to Brookings or down to Vermillion instead of taking classes in Sioux Falls.

Yet mechanical engineering major Luke Williams insists he's saving money going to the Sioux Falls university center instead of SDSU:

Williams is a Freshman Mechanical Engineering major at University Center in Sioux Falls. Eventually he'll be full time at South Dakota State University. He knows that means he'll pay more.

“I can go here and transfer up there later on and save a bunch of money,” he said. “It's huge.”

...For Williams, financials are a big factor in his choice to attend University Center instead of spending four years at SDSU. “That's the reason that I'm doing this is because I can get half here and save a bunch,” he said [Kelly Bartnick, "Students Respond to Tuition Increase," KELOLand.com, 2013.04.04].

Save a bunch of money... at University Center? Check your slide rule, engineer Williams. It's not happening on tuition and fees. Maybe Williams is counting savings on room and board, but a guy's got to eat and sleep regardless of where he takes classes. Up at SDSU, figuring four months of occupancy each semester, Williams would pay $698 a month for a shared dorm room (the university still robs us for rooms), Internet access, and chow. In Sioux Falls, he can get much more spacious digs, splitting an apartment with a buddy for a median $669 a month. Add $20 a month for Internet and an arguably spartan grocery bill of $200 a month, and Williams could keep his room and board at $555 a month. That would save him $1150 each academic year... but still leave him spending $200 more on doing his generals at the university center.

Of course, you only get to live in the dorms eight months out of the year, and they kick you out over the holidays, so you still need a place to flop back home. But one could just as easily split median $588 rent in Brookings, and still come out ahead of what one would have spent at the university center.

The only way Williams and other university center students save big money is if they stay with Mom and Dad in Sioux Falls, which is a perfectly fine way to save money. Also, given the large number of older students going back for degrees, the university centers offer savings for more mature students who already have families, mortgages, and jobs that they don't care to disrupt by moving or commuting to one of our university towns.

And that brings us back to the question of why the state is charging more for tuition at the university centers in the first place. University education is vital to economic development. It seems unfair to say to nearly 50% of the state's population that if they want to pursue a degree, we'll provide them convenient in-town classrooms on stripped down campuses, but they'll have to pay more than double the tuition rates of folks who have the luxury of moving to Madison or Spearfish for four years.

Let's reverse our trend of investing less in education. If you're a South Dakotan and you want an education, we should support you, whether you are taking your classes in Aberdeen, Pierre, or in Edgemont by Internet. The state should eliminate the in-state self-support rates and support every South Dakotan's pursuit of higher education equally.

Relevant to our discussion of rural economic development, Senator Stan Adelstein notes that "great schools are the most important economic development program...."

Three charts from the Center on Budget and Policy Priorities show that much of the nation is failing to follow Senator Adelstein's advice. 35 states are spending less per student on K-12 education than they did before the recession:

48 states have cut per-student spending on higher education since 2008:

To make up the difference, South Dakota university students will pay 4.4% more in tuition next school year, making it more expensive for them to explore different careers and saddling them with more debt that will make it harder for them to take their time and choose the jobs best suited to their talents and temperaments.

When darn near every policymaker and businessperson says that a key solution to economic trouble is a better educated workforce, most states are pulling back on their investment in their first economic development responsibility. Somehow I don't think any amount of corporate welfare is going to make up for this failure of foresight.

The USD-Vermillion-Eagle Creek Software corporate welfare deal has another beneficiary: InfiniteIQ Consulting. USD's documentation submitted to the Board of Regents for approval at their meeting this week in Aberdeen names both Eagle Creek and Georgia-based InfiniteIQ as partners in creating the Big Data Summer Program that will train potential employees for both companies. Eagle Creek and InfiniteIQ will review applications, interview applicants, and pick who gets into these new intensive graduate courses. (Note the private outsourcing of admissions decisions that I would think should properly remain under the authority of the institution issuing the academic credit.)

InfiniteIQ's LinkedIn profile says it has maybe ten employees. We'll see how many more it adds from its partnership with USD... and we'll see if those jobs move to Georgia or whether InfiniteIQ's recruits can do all their Big Data work on the cloud and work from comfy small-town cubicles in Vermillion.

Get Pat Powers talking about government investment in economic development, and you're in for several good laughs.

This morning Powers glances at the news that a third of South Dakota counties are losing population. (I run the Census data myself and find, based on population estimates, that 23 of our 66 counties lost population between 2011 and 2012; 19 counties lost population between 2010 and 2012. I can show you 38 South Dakota counties that had fewer people in 2011 than they did in 1980.)

Powers takes these population figures as his cue for this thorough and penetrating analysis of South Dakota's economic development policies, which analysis is only slightly longer than his headline:

That’s why economic development is so critical to this state. If you want to keep people here, you’ve got to give them things to come back to [Pat Powers, "Duh. That's Why We Have Economic Development," Dakota War College, 2013.04.01].

First, we must continue to chuckle at Powers's stubbornly blind endorsement of socialism. Powers and his Republican sponsors style themselves as devotees of the free market. But when the free market determines that great swaths of South Dakota aren't the best places in which to do business, Powers shouts Damn the free market! Let's redistribute some wealth and intrude on the workings of the economy with corporate welfare!

...which is fine, I guess, since plenty of my Democratic friends support this year's big economic development law.

Further chuckles come when you see Powers touting government economic development incentives even though evidence says they don't work. (Don't laugh too hard, fellow Dems: plenty of our Democratic friends in the Legislature support this kind of policy as well.)

But the biggest laugh of the day comes in Powers's sheer non sequitur. He looks at county population trends as justification for state economic development policy. Right. But how much proportional effort does the Governor’s Office of Economic Development (GOED) make to bring projects to the counties that the market and the population are abandoning? $5 million for Bel Brands in growing Brookings County, similar big investment in bringing Eagle Creek Software to growing Clay County (including free USD tuition for prospective employees), support for Can-Irish Glanbia to move a flaxseed plant to successful Sioux Falls… those economic development efforts may be a net plus for the state (though in the spirit of this year’s SB 235, I’d still like to see the evidence that these businesses would not have expanded in South Dakota without our corporate socialism), but they aren’t addressing the population drain in rural counties that motivates Powers to write his post on economic development in the first place.

Our state-level economic development efforts don't seem focused on reversing the population drain that many South Dakota counties are suffering. GOED seems to be helping the rich get richer, creating more opportunities that will only accelerate our already growing towns' predation of shrinking rural towns.

Update 12:07 MDT: If urban politics played the way it should, driving more population to our urban centers (and in South Dakota, we really ought to put "urban" in quotation marks) would improve Dems' chances of overcoming what LK calls their historical malpractice and boosting their win rate in South Dakota. But maybe Governor Daugaard's devious plan is to drive more economic development dollars to those urban areas, make more workers and CEOs beholden to GOP-GOED largesse, and thus capture a sufficient portion of the urban electorate.

Eagle Creek Software Services announced last week that it is opening a new facility in Vermillion, where it hopes to offer up to 200 jobs in return for various forms of corporate welfare.

The Volante follows up with more information about why Vermillion was able to play the USD card to win Eagle Creek while Madison, with tech-focused DSU, failed for a second time to get Eagle Creek's attention.

Reason #1: The Beacom School of Business:

[Beacom School of Business dean Mike] Keller further explained his knowledge of past encounters with the software company by discussing his contact with Jeff Brusseau, vice president of Eagle Creek. Brusseau used to teach at the Beacom School of Business until he took his current position at Eagle Creek two years ago. Before leaving USD, Brusseau mentioned Eagle Creek was looking to expand its operations, and that a Vermillion and USD partnership might be a viable option, Keller said [Trent Opstedahl, "Business School, Enrollment Attract Eagle Creek," USD Volante, 2013.03.20].

Who you know matters. A past prof turned exec was in the right place to make this specific move happen.

But the USD B-school didn't land Eagle Creek just by personal connection. Eagle Creek appears to be looking for more business-oriented graduates. The three master's degree programs they'd like to sponsor for their USD recruits are in computer science, administration, and business. DSU doesn't offer any of those three options on its campus (DSU offers an MBA, but only at the Sioux Falls University Center). And Dean Keller insists that the tech angle of the USD graduate program will not duplicate or directly compete with DSU's graduate program.

Reason #2: Broader education. Eagle Creek appears to prefer less tech-focused undergrads. The Information Technology Consultant Academy USD will create in partnership with Eagle Creek will certify students who take just four courses—two in computer science, two in business, followed by an internship. That's hardly a minor. Students majoring in history, communications, art, or economics could easily squeeze this certification for some immediate post-graduation job security.

That diversity of academic backgrounds would fit the work Eagle Creek does:

“The types of jobs Eagle Creek will be bringing are referred to as IT programming and consulting services. They don’t do traditional programming like writing code from scratch,” [Vermillion economic development chief Steve] Howe said. “Most of the companies that they are dealing with are buying off-the-shelf software. They are adapting that software to their customers’ needs.”

...Eagle Creek’s services are used by a variety of companies, from healthcare, insurance and financial services, to communications, technology, and life sciences [David Lias, "Firm Chooses Vermillion," Vermillion Plain Talk, 2013.03.17].

To meet the needs of that diverse range of customers, Eagle Creek appears not to want all tech specialists. They appear to want generalists who can interact intelligently with their clients in a wide range of fields.

Reason #3: One big happy family. Eagle Creek didn't say no to DSU's tech expertise. They're still getting it:

Concerning the graduate program, [USD graduate school dean Laurie] Becvar said USD is partnering with Dakota State University to develop and facilitate the curriculum and program.

“When we get to the graduate level, we are going to partner with DSU, because it’s true, they do have more resources simply because it’s their distinctive niche,” said Becvar [Opstedahl, 2013.03.20].

Eagle Creek doesn't have to move to Madison to get DSU's tech knowledge. The Regental system can act like one big happy university family, share DSU's tech knowledge around the state, and make it possible for Eagle Creek to pick Vermillion for its other apparent advantages over Madison.

Eagle Creek and Vermillion managed to put together a best-of-both-worlds deal. They get the tech expertise of Dakota State University that we assume would tantalize any tech company. But Eagle Creek get to use our Regental system to transfer that academic support to the university community that offers a more diversely educated workforce to support their business model and bottom line.

Bob Mercer thinks Senate Bill 235, the bipartisan omnibus economic development bill, is a proper step toward more openness about South Dakota's corporate welfare system. I've noted my approval of the openness portions of SB 235, especially the provision that the Governor's Office of Economic Development must publish along with the names of any recipient of our big corporate handouts "a statement of why the project would not have occurred in South Dakota without the reinvestment payment" (SB 235, Section 34, Clause 5).

That's not quite as high a hurdle as making these corporate welfare recipients pass a drug test, but it's something.

My naturally cynical friend the Displaced Plainsman doesn't think that statement amounts to a hill of beans:

My first reaction to that criterion is snarky: When did Miss Cleo come out of retirement and move to South Dakota?

On a more serious note, won't any business with  a semi-competent CEO be able to point to competing offers in other states and threaten to take the business there if South Dakota doesn't pony up the cash? How hard is it to manufacture competition from Itstoodamnhot, Mississippi?  Exactly how is the state going to be able to prove that the business would not have located here without the incentives? [LK, "A Minor Musing about Precognition and SB 235," The Displaced Plainsman, 2013.03.18]

The Displaced Plainsman is right: this requirement of SB 235 is more flim-flammery than formal proof. The Governor's people and/or the welfare recipients' PR departments will not write down anything different from the B.S. lines they previously fed themselves in their closed-door meetings and or on the links at Dakota Dunes.

The difference SB 235 makes with this provision is that now they'll at least have to put that B.S. on the record, for all to see. And I like to believe that forcing people to put their B.S. on the record will help us catch some of those B.S. artists in the act in the future... and may deter some politicians and entrepreneurs from engaging in such deception in the first place.