When the Regents got done purging David Borofsky from their system yesterday, they took up a Drexel University study of South Dakota's labor market. The study, commissioned by the state Workforce Development Council, looks at our population, education attainment, labor force, and job growth.

One key finding is that South Dakota remains a "net exporter of college degree holders"—i.e., brain drain. We pour resources into higher education, and then, more often than not, other states benefit from the value we've added.

It's not like we're overproducing degrees and suffering from a surfeit of degree holders. Our degree holders are leaving for labor markets in which an even higher percentage of their competition hold degrees:

Approximately 24 percent of working-age South Dakota residents currently hold a bachelor’s degree or higher, compared to 28 percent of working-age adults in the United States. While these figures are not far off, differences in the rate of growth in bachelor’s degree attainment since 2000 have been more stark, with South Dakota increasing by only 24 percent while the nation increased by 38 percent [South Dakota Board of Regents, summary of Drexel Labor Market Study, planning session agenda item 6, 2014.08.13].

Subtracting those departing degree holders, our working-age population is still growing at about the national rate. Our biggest gains come among workers age 55 and older:

South Dakota workforce gains by age group, 1999-2013

Source: SDBOR, 2014.08.13

The age groups most likely to have kids in school, from 35 to 54, show a net decline. The major growth comes in the older groups who are probably seeing their kids leave the K-12 schools or the younger workers who aren't yet sending kids to school. Hmm... could that pattern indicate part of the problem South Dakota has rallying the political will to increase funding for K-12 education?

There is a bit of a causal relationship between the higher growth in older workers and slower growth or actual decline in younger workers. As older workers postpone retirement and hold onto jobs, they leave fewer opportunities for younger workers. Consider the stark differences among age groups in workforce participation rates:

SD workforce participation rates, by age group, 1999-2013

Source: SDBOR

Even among those young working-age folks who are staying, we see fewer coming to work, because the big growth in retirement age workers is reducing their opportunities.

The strange thing is that we see those declines in under-55 workforce participation even as a number of South Dakota industry sectors face labor shortages (education is listed, but Drexel cites six others with higher shortage percentages). South Dakota has jobs waiting, but increasing numbers of workers under 55 are dropping out of our state labor force. What's the disconnect? Our fundamental shift from producing goods to producing services is increasing the need for workers with post-secondary training:

The study’s authors observe that many of the labor-scarce industries and occupations identified above are associated with job types that tend to require “long periods of formal schooling, apprenticeships, or other kinds of on-the-job training...to develop the abilities, knowledge, and skills required to work in these occupations,” (p. 48). In other words, the labor shortages currently seen in South Dakota appear to be more characteristic of skilled fields. Conversely, industries and occupations in South Dakota now dealing with excess labor supplies tend to be associated with unskilled positions. These observations speak to the heightened importance of postsecondary training, which the authors found (among South Dakota workers) to be inversely associated with both unemployment rate and duration of unemployment [SDBOR, 2014.08.13].

The Regental response, of course, will be to crank out more degrees. But unless we address our net export of degree holders, that's like pouring more water into the pool but not patching the leaks. We might get better economic results if South Dakota employers did more to retain all the wonderful graduates our universities are already producing by offering them competitive wages.

Drexel offers one more interesting the industries that have contributed most to job growth over the last 13 years:

Change in SD employment by occupation, 2000-2013

Source: SDBOR

The greatest numbers of new jobs came in management, business, finance, and health care. The highest rate of growth, 71.8%, came in arts, entertainment, sports, and media (an area driven by education in the humanities, not STEM). Notice that Drexel doesn't say anything about job growth in agriculture. Farming is part of the goods-producing sector that Drexel says will diminish in importance because "technological gains outpace the contributions of labor."

In other words, agribusiness and manufacturing can get plenty of machines to do their work. Our universities need to focus on creating more skilled human beings.

Humans. Humanities. Think about it.

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Hey, Democrats! Do we get a 2014 electoral boost from steadily improving job numbers? Consider:

1. Ever since President Barack Obama's first budget kicked in, unemployment has trended steadily downward:

BLS: U.S. Unemployment 2004-2014

Source: Bureau of Labor Statistics

2. Since the beginning of the Obama Administration, Gallup's Job Creation Index (percentage of firms hiring minus percentage of firms downsizing) has steadily increased:

Gallup Job Creation Index 2008-2014

3. Sandbagging those gains have been Republican resistance to government hiring. More public employers were firing rather than hiring during President Obama's first term:

Gallup Job Creation Index 2008-2014: Private vs. Public

President Obama has overseen steady recovery in the labor market since averting an economic depression. We'd be recovering faster if President Obama really had increased the size of government as Republicans have accused him of doing, as more teachers, police, case workers, park rangers, and researchers would provide more public services and boost GDP by buying more Cheetos, chain saws, and Jeep Cherokees.

Republican recalcitrance has kept every one of the curves above shallower than it could have been. Sending more Republicans to Washington on their vow to block or sue President Obama's every move will further brake economic recovery. Sending more Democrats to Washington will get the job done... and get more jobs.

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Temporarily out of press releases from his GOP overlords, Pat Powers squawks in confused triumph over a Minnesota café that is adding a 35-cent "minimum wage fee" to every customer's bill.

Minnesota just increased its minimum wage last Friday. Minnesota was one of only four states with a minimum wage below the federal $7.25 an hour. Legislation passed this spring raises the minimum wage for small businesses from $5.25 to $6.15 an hour and for big businesses from $6.15 an hour to $8.00 an hour. (MinnPost explains the details well.)

South Dakotans can't count on their Legislature to act in the best interest of workers, so we had to put forward a ballot initiative to raise our minimum wage from $7.25 to $8.50. Powers seems to think one café's minimum-wage fee supports his opposition to raising the minimum wage:

And it highlights an excellent point – when people say they’re in support of an increased minimum wage – who do people think are going to be paying it? Ultimately, they will in increased costs.

Because the alternative will be to fire people, or to pay to automate things when it’s more affordable to do so [Pat Powers, "Minnesota Employer Charging Customers a Minimum Wage Fee to Offset Mandate," Dakota War College, 2014.08.06].

Powers doesn't seem to notice that the Minneapolis news report he cites doesn't highlight any such thing. It highlights the fact that customers think the café owner is grandstanding but are willing to support better wages for workers by paying for it.

It also ignores the fact that the 35-cent fee supports the arguments minimum-wage proponents make. The Oasis Café appears to have seventeen employees, with seven on the floor at peak hours. Let's assume the café qualifies as a large business and that every one of those employees is at minimum wage. If I sit down for lunch during a busy hour, I'm taking advantage of the service of seven employees, each making $1.85 more per hour. Multiply—that's $12.95 in increased operating cost per hour. 37 customers paying the 35-cent minimum-wage fee in one hour will make up that difference. (Never mind that the minimum-wage fee isn't really tied to the minimum wage, since it doesn't take into account whether I'm waited on by a rookie waitress or a seasoned server who's gotten a raise, or the actual amount of labor that I demand based on the size and complexity of my order and the time I spend in the café.)

For a quarter and a dime, customers enjoy the benefits of more purchasing power for the workers most likely to stimulate the economy with spending, faster job growth, and more people lifted out of poverty and off government assistance. Oasis Café customers are showing they are willing to pay such a pittance for the pleasure of grilled cheese and labor policy that is both moral and effective. South Dakota voters, let's show the same moral and economic spirit and vote Yes on Initiated Measure 18.

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Travis Betsworth, general manager of the Original Pancake House in Sioux Falls, categorically denies an accusation that it fired an employee for praying with customers.

Mr. Betsworth said this afternoon, "We would never fire anybody for praying." Quite the contrary, Betsworth says he himself has taken time to pray with customers at their tables during regular business hours. Many church groups come to his restaurant; Betsworth estimates some sort of Bible study or other church-related activity is taking place in his restaurant five days out of each week. Many religious customers leave church cards in the store tip jar.

Betsworth was responding to an accusation leveled by a paid political spokesman for failed Senate candidate Annette Bosworth. The spokesman claims that waitress Shauna Rose was fired for praying with Bosworth and her spokesman just before the primary:

The first time I met Shauna was just before the June election. She was working as a waitress at the Original Pancake House in Sioux Falls. I went in with my friend Dr. Annette Bosworth when we were on our way to a press conference. We prayed at the table before breakfast and Shauna, who knew Dr. Bosworth, bowed her head with us.

Shauna was fired by the Original Pancake House a couple of days later. She was told by a co-worker that it was for praying with us.

Guess where I’m not going to eat pancakes again? [paid spokesman for Annette Bosworth, "Update on Dakota Reporter and RIP Shauna Rose," "Dakota" Reporter, 2014.07.25]

Betsworth says he has no knowledge of the alleged interaction between Bosworth, her spokesman, and Rose. Betsworth says that if he had witnessed such a prayerful interaction on the job, he would have praised Rose for treating customers so well. He would not give further details on managerial decisions affecting Rose's employment at Original Pancake House, but Betsworth flatly denied that Rose would have been fired for praying with a customer. Betsworth says he and the restaurant's two other managers make staffing decisions cooperatively, and no such decision to fire any employee for praying has taken place on his watch.

Rose died in a motorcycle accident on July 16. Betsworth says Rose was "very loved" at the restaurant. Many employees attended Rose's funeral, says Betsworth, and he believes the owners of the restaurant sent flowers.

Independent candidate for lieutenant governor Lora Hubbel made a public statement online yesterday citing the Christian discrimination accusation to discourage people from eating at the Original Pancake House, whose Sioux Falls shop on West 41st is the Oregon-based company's only South Dakota franchise. Betsworth says that prior to his interview with the Madville Times, he was not aware of any calls for boycott, complaints made to the store, or the original accusation of religious discrimination. Betsworth says no other bloggers or reporters had contacted him to inquire about Rose's employment at Original Pancake House prior to this Sunday interview.

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We spend a lot of time here in the blogosphere looking at South Dakota's wages from different angles: a regional low for workers' earning potential and for median wages, low wages motivating a quarter of our vo-tech grads to leave the state, and less cushion in average wages for folks raising families.

Let's add this new data from the Bureau of Labor Statistics on average weekly wages in 2013, county by county, nationwide:

Average weekly wage, by county, 2013. Source: Bureau of Labor Statistics. (Click to access super-cool interactive map at BLS website!)

Source: Bureau of Labor Statistics. (Click to access super-cool interactive map at BLS website!)

South Dakota has a tiny strip of top-quintile wage opportunity along I-29 in Union, Lincoln, and Minnehaha counties. Union County offers the best average wage in the state, $885 a week, while Lincoln and Minnehaha each crack $800. The next best average weekly pay is in Harding County, $753. The only other counties that break $700 are around the big metros of Pierre (ah, government!), Brookings, Aberdeen, and Rapid City.

I-90 isn't helping Jackson County much; the Kadoka-Wanblee metroplex offers the lowest average wage in South Dakota, $427 a week. Three other counties—Jones, Lyman, and McPherson (Charlie Hoffman! work harder!)—fail to break $500.

Before I go crazy with the analysis, let's recognize two important facts about these numbers.  The BLS is mapping average weekly wage. As is usually the case with wage data, averages are highly skewed by the handful of top wage earners. In Union County, for instance, most workers in North Sioux City are making less than $885 a week (work 50 weeks a year, that's  $44,250 annually); the handful enjoying the good life behind state-funded dikes at Dakota Dunes skew that average with their six-figure salaries.

Furthermore, this BLS dataset only counts wage earners. These figures don't fully reflect the general economic health of each county because they don't count the unemployed. For instance, Shannon County (that's Oglala County to you, wasicuhoka hey!) beats most counties in South Dakota with an average weekly pay of $681. So does Buffalo County at $666. Yet these two counties regularly top the lists of poorest counties in the U.S. because there aren't enough jobs to go around. Those higher average wages don't include all the folks earning zero.

With those caveats in mind, let's look at how well those wages put food on the table. MIT's Living Wage Calculator offers data on the income it takes for wage earners to provide for themselves and for different sized families in each state, county, and town. Remember, "living wage" doesn't mean middle-class standard of living; it means food, shelter, visit to the doctor, gas to get to work, nothing fancy.

The county figures don't differ much from county to county in South Dakota—the biggest difference between Jackson and Union counties is $43 a week. You can pick your county and compare the BLS wage data, but here, let's settle for the statewide living wage figures (I take MIT's hourly-wage data for South Dakota and multiply by 40 hours):

Hourly Wages Living Wage Poverty Wage
1 Adult $298 $208
1 Adult, 1 Child $649 $280
1 Adult, 2 Children $806 $352
1 Adult, 3 Children $1,004 $424
2 Adults $498 $280
2 Adults, 1 Child $616 $352
2 Adults, 2 Children $670 $424
2 Adults, 3 Children $782 $496

The average wage in almost every county will keep most families out of poverty. But for a living wage, add even on child to your household, and you'll be able to get by on one average full-time paycheck in 28 of South Dakota's 66 counties. Have two children, and you're down to 13 counties where a family can afford to have one parent stay home while the other works 40 hours a week—and again, that assumes you have two parents in the home and that the working parent can land a job with average pay, meaning pay that (remember the rich skew!) will be higher than the majority of jobs offer.

You want a family-friendly state? Step one is to brown up that map, increase wages, and create more jobs that allow one honest hard worker to support a family.

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Northern Plains News puts more lie to South Dakota Republican assertions that South Dakota is a model of the GOP smaller-government philosophy. From 2007 to 2012, South Dakota added workers to government payrolls at a faster rate than our neighbors and the national average:

The Mount Rushmore State, along with fellow Northern Plains states Wyoming and Nebraska, had government employment grow by more than 4 percent during that period.

North Dakota and Minnesota had a 2 to 4 percent decrease in state and local government employees during the period while Montana’s government workforce grew by less than 2 percent and Iowa’s by 2 to 4 percent ["SD State, Local Government Employee Growth Among Fastest in Nation," Northern Plains News via Mitchell Daily Republic, 2014.07.18].

Bigger government payrolls, faster state budget growth... that doesn't sound like what South Dakota Republicans tell us they're about, does it?

Republican-dominated state government pays its workers a lot more than do local governments:

Average annual state government wages in South Dakota were $50,000 to $55,000 and $35,000 to $40,000 for local government employees [NPN, 2014.07.18].

And in a remarkable and unexpected assertion of priorities, check out which field draws the biggest government paychecks in South Dakota:

State employees working in education were the best paid, at an annual salary of $60,000 to $65,000 and the lowest paid were local natural resources employees at $30,000 to $35,000 [NPN, 2014.07.18].

State workers in education get great salaries! It's too bad the state can't shake some of that $60K down to the K-12 teachers pounding the whiteboards for $40K to help with recruitment and retention.

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Thanks to the South Dakota Democratic Party, we have the opportunity to vote for an economic stimulus package in November. When you vote to raise the minimum wage, you will not be voting to sandbag the economy. Quite to the contrary, there's a good chance you'll be voting to create more jobs, as suggested by Republicans' greatest enemy, empirical evidence:

Of the 13 states that increased their minimum wage in early 2014, all but one (New Jersey) are seeing employment gains. Furthermore, nine of the remaining 12 states are above the median for this period. The average change in employment for the 13 states that increased their minimum wage is +0.99% while the remaining states have an average employment change of +0.68% [Ben Wolcoott, "2014 Job Creation Faster in States that Raised the Minimum Wage," Center for Economic and Policy Research, 2014.06.30].

CEPR provides this chart showing job growth for the first five months of 2014 compared with the last five months of 2013:

wolcott-2014-06-30_494

South Dakota is actually among states where employment has recently stagnated or declined.  The only state that has lost jobs immediately after raising its minimum wage on January 1, 2014, is New Jersey. (Blame the decline of gambling in Atlantic City? The highest out-migration rate in the U.S.? Chris Christie?)

CEPR itself recognizes that "While this kind of simple exercise can't establish causality, it does provide evidence against theoretical negative employment effects of minimum-wage increases." So when Governor Daugaard and the Chamber of Commerce wail that increasing the minimum wage will cost South Dakota jobs, you wave this CEPR report in their faces (and Saturday's report from John Tsitrian, and last July's report from Michael Larson) and say, "Next issue."

And be glad we're not asking for $15 an hour, or $21.72, or some other minimum wage that properly recognizes the dignity of workers.

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While the Supreme Court imbues corporations with the power of religious belief, Justice Samuel Alito points quietly toward the logical political response:

Justice Samuel A. Alito Jr., writing for the court’s five more conservative justices, said a federal religious-freedom law applied to for-profit corporations controlled by religious families. He added that the requirement that the companies provide contraception coverage imposed a substantial burden on the companies’ religious liberty. He said the government could provide the coverage in other ways [Adam Liptak, "Supreme Court Rejects Contraceptives Mandate for Some Corporations," New York Times, 2014.06.30].

medicare-for-allHow can the government provide the health care coverage that Hobby Lobby and ACA-trashing conservatives will gleefully deny? By doing what Rick Weiland says and going back to what the Affordable Care Act should have offered in the first place: a universal public option. Medicare eligibility for everyone.

Consider the implications of today's Supreme Court ruling for employees:

  1. The ACA is intended to remove some of the grit from the labor market by guaranteeing some basic protections in health insurance.
  2. The Hobby Lobby/Conestoga Wood ruling throw that grit back in the wheels, increasing the homework workers have to do to figure out whether their current or prospective employers offer health plans that meet their needs.
  3. An applicant going into an interview wanting to learn about the company's health insurance plan and exemptions in coverage must ask questions that, under today's rulings, are treated as fundamentally religious questions.
  4. Asking such questions opens the door for the employer to ask—or at least wonder about—the applicant's religious beliefs. Good heavens, she's asking whether our health plan covers contraception. Is she one of those heathens who thinks women deserve access to basic health care? We can't let her corrupt our employees!
  5. If holy companies can Swiss-cheese their health plans, their employees can't switch to better coverage in the ACA Marketplace, since the Marketplace only takes applicants whose employers don't offer coverage.
  6. Therefore, we need to elect a Congress that will revisit the ACA, open the Marketplace to all willing customers, and offer all Americans the chance to buy into a publicly funded health insurance option that offers them the same stable, reliable coverage no matter what sort of religionists they work for.
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