I can hear the conversation in Pierre: We're short on teachers, and folks going to expect better pay... quick! Blow smoke!

South Dakota’s superintendents say schools are struggling to fill open positions mainly because of low teacher pay, while policymakers suggest a solution to the teacher shortage isn’t simple and the problem won’t be fixed with funding alone [Kevin Burbach, "Lawmakers Say Education Needs More Than Just Money," AP via that Sioux Falls paper, 2014.09.21].

Actually... yeah, it will. Raising teacher pay would do more to solve South Dakota's worsening teacher shortage than any other single policy action. $10,000 more in every teacher's paycheck would change more teachers' minds about moving or retiring or taking up welding than improving teacher training and "support," the ideas Rep. Jacqueline Sly (R-33/Rapid City) mentions in Burbach's report. (At least Burbach gets Rep. Sly's name right; he calls Democratic Rep. Paula Hawks "Tessa".)

At the bottom of the article, spokesman Tony Venhuizen reminds us what the Daugaard Administration really thinks of the teacher shortage—they'd like to make it permanent:

“Particularly in some small districts we see they’re making decisions to keep larger staffs, to keep their staffing levels higher rather than to use the money to pay fewer teachers more [Tony Venhuizen, quoted in Burbach, 2014.09.21].

That's right, far from a shortage of teachers, Governor Daugaard still thinks we have too many teachers. Getting rid of a third of our teachers would deprive our kids of even more resources and support in school, but hey! those darn teachers lean union and Democrat anyway! Who needs 'em?

There are plenty of other, more positive legislative actions we can take to improve our K-12 schools. So let's not dilly-dally: let's raise teacher pay so we can get on to those other improvements.

61 comments

I continue to try to nail down how well South Dakota includes the American Indian population in its unemployment data. Following my weekend calculation that ignoring unemployment on the reservation causes us to underreport statewide unemployment by ten percentage points, an informed reader insisted to me that the state does count jobs data from reservation counties.

The state Department of Labor does include reservation counties in its Labor Supply report:

South Dakota
Labor Supply
July 2014
South Dakota 51,755 Deuel 250 Lawrence 1,625
Rapid City MSA 7,935 Dewey 900 Lyman 320
Sioux Falls MSA 14,505 Douglas 150 McPherson 130
Aurora 140 Edmunds 255 Marshall 215
Beadle 975 Fall River 505 Mellette 175
Bennett 200 Faulk 110 Miner 115
Bon Homme 255 Grant 430 Moody 430
Brookings 2,070 Gregory 205 Perkins 145
Brown 2,090 Haakon 115 Potter 125
Brule 305 Hamlin 380 Roberts 535
Buffalo 295 Hand 170 Sanborn 100
Butte 440 Hanson 245 Shannon 1,295
Campbell 80 Harding 90 Spink 355
Charles Mix 445 Hughes 1,105 Stanley 310
Clark 165 Hutchinson 300 Sully 105
Clay 890 Hyde 85 Todd 665
Codington 1,580 Jackson 255 Tripp 260
Corson 320 Jerauld 205 Union 1,035
Custer 805 Jones 105 Walworth 370
Davison 1,230 Kingsbury 275 Yankton 1,345
Day 335 Lake 615 Ziebach 215

Source: Labor Market Information Center, South Dakota Department of Labor and Regulation.

Now we're really going to apple-orange the numbers here. "Labor supply" is the state's guesstimate of the number of workers a new business setting up shop could get to apply for work in a given county. It includes workers who would leave their current jobs, folks who would commute from elsewhere, and folks who aren't working but would like the chance to work. My Saturday calculations came from tribal reports that included folks who are "available to work," whether they are actively seeking jobs or not. Those tribal numbers do not appear to count folks with jobs and willing commuters from elsewhere. So the state's "labor supply" numbers should be larger than the figures the tribes report.

Furthermore, my numbers are based on reservations; the state's numbers are based on counties. Some reservations partially touch multiple counties. If we try to line up reservation numbers and county numbers, some of those counts (i.e., on the Crow Creek, Lower Brule, and Sisseton-Wahpeton reservations) will include some non-Indian labor supply. So again, the state's numbers should be larger than the tribes' numbers.

But make spreadsheets boldly, said Luther. So here we go!

Reservation County State Labor Supply Tribal Unemployment
Pine Ridge Shannon 1,295
Pine Ridge Jackson 255 26,408
Standing Rock Corson 320 3,074
Cheyenne River Dewey 900
Cheyenne River Ziebach 215 9,893
Rosebud Todd 665 11,909
Yankton Charles Mix 445 88
Lower Brule Lyman 320
Lower Brule Stanley 310 759
Crow Creek Hughes 1,105
Crow Creek Hyde 85
Crow Creek Buffalo 295 380
Sisseton-Wahpeton Marshall 215
Sisseton-Wahpeton Day 335
Sisseton-Wahpeton Roberts 535 6,023
Flandreau Moody 430 472
total 6,430 59,006

On the reservations, my tribal-report-based data shows 59,006 people available for work. In the state's broader calculation of labor supply, in counties either entirely or partially located on reservation land, including some people who already have jobs and who would be willing to drive to those places from elsewhere to work, we find 6,430 people available for new jobs in July 2014. Statewide, the official labor supply is 51,755.

Something is missing here. Either the tribal reports of folks available for work are way off, or South Dakota really is excluding Indians from its labor statistics.

6 comments

In his proposal to include American Indians in our workforce initiatives, Rep. Steve Hickey says, "South Dakota celebrates a low unemployment rate only because tribal unemployment statistics are excluded. The real unemployment rate in South Dakota which include tribal unemployment are much more dire."

Logically, a commenter asks, "Does anyone know what the unemployment rate would be in SD if the reservations were included?"

Good question. For what I think is the answer, skip straight to the table at the bottom.

But if you want some wonky caveats, plow through the following exposition:

Let us establish that South Dakota does not count unemployed Indians in its job stats because counting Indians is the feds' job. And even the feds don't exert themselves very hard on that task. The Bureau of Indian Affairs issued a report on Indian job data in 2007, then skipped its biennial legal mandate to do so in 2009 and 2011. They caught up last January with data from 2010:

The law mandating the report doesn’t provide funding for it. One full-time employee – an economist – was assigned the task of producing the report....

But it’s a question of priorities, according to [Assistant Secretary for Indian Affairs Kevin] Washburn. Although the report is “not unimportant,” Washburn said he didn’t want to pull human resources from other important aspects of the BIA’s mission “and I’m not sure Congress would like us to...."

So why not hand the task over to the Census Bureau or Labor Department with their armies of researchers with expertise in statistics?

“I’m not authorized to do that,” Washburn said [Gale Courey Toensing, "Finally! Indian Country Gets Its Labor Force Report," Indian County Today, 2014.01.29].

That one poor economist also warns us not to apple-orange the BIA numbers with standard unemployment figures:

It is very important to note that this report does not provide any estimates of "unemployment.” “Unemployment,” as also defined above, refers to the proportion of people in “the labor force” who are not working, in accordance with the official Federal definition of “the labor force” as set by the Department of Labor. For example, people may be “available for work” in the sense of wanting a job, but would not be “in the labor force” if they do not have a job and are not actively looking for one. This measurement standard has long been established in the Federal Statistical System.

The above-mentioned standard definition of unemployment does not reflect any judgment as to whether people who are not working, and who want a job, should be actively looking for work. Indeed, it may well be the case that there are no job opportunities in certain areas of Indian Country, thereby making it pointless, or perhaps even irrational, for anyone without a job under these circumstances to be continually and actively looking for one in the same, economically depressed, geographic area.

The Act does not require this report to provide estimates of unemployment, and such estimates are not possible because data on the size of the labor force within tribal service populations are not available. Therefore, none of the statistics provided in this report should be seen as reflecting or representing estimates of unemployment. Anyone who uses the statistics provided in this report to infer any statement about unemployment with regard to any individual tribe, with regard to the tribes in a state or region, or with regard to Indian Country overall, will be misinterpreting and misrepresenting the findings of this report [2013 American Indian Population and labor Force Report, Bureau of Indian Affairs, January 2014, p. 9].

Oh, for criminy pete jeeper's sakes, can we just have a spreadsheet?

No, but we can creep slowly toward the most responsible answer possible to my commenter's question.

First, the 2014 BIA report indicates that South Dakota is doing worse at putting the Indian workforce to work than almost anyone else. Between 25.7% and 28.5% of tribal service populations age 16 and over who were available for work in 2010 were not working [pp. 33–34]. That's one of the worst rates in the nation, matched only by Arizona (27.0%–28.3%) and Utah (22.5%–29.0%). The national rate is 17.6%–17.9%. Evidently, it's harder for Indians to find work in South Dakota than most other states, and we could use proposals like Rep. Hickey's to catch us up.

Alas, the 2014 report does not provide the same direct numbers (or even arrive at them by the same methodology) as its last report, from 2007, based on 2005 data. To keep my extrapolations low, I want to look at the 2005 data.

Now let's address this problematic distinction between "in the labor force" (the category used for traditional unemployment calculations) and "available for work." Discussing nationwide data [p. 35], the 2014 BIA report finds that about 96% of those "available for work" were in the "labor force" either holding jobs or actively seeking jobs. In 2005, that percentage was closer to 97% (see 2005 BLS labor force data and count of those available to work but not in the labor force). As suggested by the report [see above, p. 9], that greater lack of jobs on in Indian Country may depress that percentage much further.

I want to combine BIA report numbers with South Dakota employment data from 2005. But before we do any calculations, we face a choice:

  1. Do we damn the torpedoes, mash the numbers together as is, and leave it to Governor Daugaard to hire his own economist to better rectify the numbers?
  2. Do we multiply and BIA "available for work" numbers by 97% to estimate "labor force"?
  3. Do we assume a much lower Indian labor force participation rate and multiply by a guessed lower percentage?

To strike a balance between restraint and extrapolation error, I will take the middle route and multiply BIA "available for work" numbers by the nationally, statistically attested 96%

Now, finally, let's crunch some 2005 numbers. That year, South Dakota reported an unemployment rate of 3.65%. Let's add the 2005 data South Dakota's nine tribes reported to the BIA for its 2007 report and see what comes out:

2005 avail to work labor force* employed unemployed unemp rate
SD 429,485 413,825 15,660 3.65%
Cheyenne River 11,205 10,843 1,312 9,531 87.90%
Crow Creek 1,317 1,274 558 716 56.22%
Flandreau Santee 1,247 1,206 775 431 35.78%
Lower Brule 731 707 351 356 50.38%
Oglala 29,539 28,584 3,131 25,453 89.05%
Rosebud 14,428 13,961 2,519 11,442 81.96%
Sisseton-Wahpeton 8,599 8,321 2,576 5,745 69.04%
Standing Rock 3,565 3,449 491 2,958 85.77%
Yankton 719 695 631 64 9.31%
SD + Tribal 498,530 426,169 72,361 14.51%
*Reservation labor force calculated by multiplying reported "available for work" by 2005 national labor force/available to work of 0.96769

According to this tribal data, there were more Oglala Sioux unable to find work on the Pine Ridge reservation than there were not working in South Dakota's official count of the rest of the state. If South Dakota is not including 57,000 out-of-work Indians in its unemployment data, then in 2005, instead of 3.65%, the statewide unemployment rate was 14.51%.

South Dakota currently (as of July 2014) brags about an official unemployment rate of 3.7%, tying with Vermont for fourth-lowest in the nation. That's half of California's 7.4%. That's well below the worst rate in the nation, Mississippi's 8.0%.

The Indian population has been growing faster than the white population in South Dakota. I haven't heard anyone saying that jobs have been proliferating on the reservations since 2005. And I don't think Northern Beef Packers or any of Mike Rounds's other magical job creation schemes created 57,000 jobs on the reservations.

So if the above 2005 data are not riddled with errors, we could safely speculate that South Dakota's all-inclusive unemployment rate is over 14%.

Whether that 14% would make us worst in the nation depends on how badly other states would be affected by counting their Indian labor data. But 14%

39 comments

Speaking of wages, the Governor's Workforce Summit report isn't.

  1. Accenture (the international consulting shard of Arthur Andersen that incorporated in Bermuda, then Ireland, thus avoiding U.S. taxes—way to keep our dollars local, Governor!) does not mention wages in the executive summary.
  2. Accenture does say South Dakota's workforce problems come from stupid workers "Job seekers do not know the real potential of technical and other careers, or what is expected to succeed") and misfocused teachers ("Education is critical to providing the workforce South Dakota needs, and must be focused on the skills and competencies needed to grow and sustain South Dakota’s economy"). Obviously we are the dummies, not our business leaders.
  3. The executive summary damns us with limited thinking: "...South Dakota will never fully solve its workforce challenges."
  4. The key to South Dakota's economic success is "having enough workers with the right skills and competencies."
  5. The bullet list of the key difficulties in recruiting and retaining workers mentions "competition for available skills", lack of job seeker "soft skills", and lack of housing, but does not mention wages.
  6. Summit participants proposed that the business sector can boost recruitment and retention if it will "Increase workplace flexibility to meet needs of a changing workforce... expand the number of apprenticeships leading to jobs... [and] develop creative solutions to provide transportation for workers." Wages are not mentioned.
  7. The three scariest words in the entire report: Business-driven curricula.
  8. Once we retool our schools to do what business wants, we just need to build more complicated "centralized online hubs for job seekers and employers" built around "common language, data, and a unified agenda" so we can match up skills and competencies with openings (but not wages).
  9. In their discussion of "Creating a Roadmap" for recruitment and retention, summit coordinators asked business participants several questions, but not, "Do you think you pay your employees a competitive wage?"
  10. Participants at all six summits included low wages as a problem for recruitment and retention. But only the Brookings, Rapid City, and Sioux Falls sessions managed to get "increase wages" to bubble into the top suggestions for recruiting and retaining more workers. Watertown, Aberdeen, Huron-Mitchell-Yankton, are you that dense?

I'm sure Accenture's consultants were paid very well to conduct and summarize these Workforce Summits. If South Dakota would apply its attitude toward Irish consultants to its own workers, it might not need another Workforce Summit.

44 comments

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.

4 comments

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.

8 comments

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.

5 comments

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.

273 comments

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