My readers at South Dakota Magazine may not think minimum wage workers deserve any consideration, but fortunately, the are in the minority. Thanks to the good sense of 55% of South Dakota voters, minimum wage workers will get a raise on January 1, from $7.25 to $8.50 an hour.

But what about all the jobs ALEC says we're going to lose? South Dakota's going to end up a wreck like Minnesota, where they raised the minimum wage even more this summer, right?

On August 1, Minnesota hiked its minimum wage for small employers from $5.25 to $6.50 an hour and for large employers from $6.15 to $8.00. Those are hikes of 24% and 30%, respectively. South Dakota's upcoming increase is 17%.

Let's look at what has happened to employment in Minnesota since then, with some numbers from the whole past year for context:

Month Labor Force Jobs Unemployed Unemployment
rate
2013-07 2,969,376 2,818,339 151,037 5.1
2013-08 2,968,353 2,819,609 148,744 5.0
2013-09 2,968,482 2,822,623 145,859 4.9
2013-10 2,970,349 2,826,633 143,716 4.8
2013-11 2,965,982 2,828,347 137,635 4.6
2013-12 2,971,572 2,834,248 137,324 4.6
2014-01 2,985,354 2,843,982 141,372 4.7
2014-02 2,995,127 2,850,755 144,372 4.8
2014-03 3,002,431 2,856,843 145,588 4.8
2014-04 3,001,998 2,860,415 141,583 4.7
2014-05 2,999,601 2,860,560 139,041 4.6
2014-06 2,995,361 2,859,447 135,914 4.5
2014-07 2,987,768 2,854,409 133,359 4.5
2014-08 2,981,147 2,852,956 128,191 4.3
2014-09 2,983,397 2,860,969 122,428 4.1
2014-10 2,988,155 2,871,566 116,589 3.9
Source: Minnesota Department of Employment and Economic Development

Three months after imposing a higher relative increase in costs on minimum-wage employers than South Dakota's increase will, Minnesota has 17,157 more jobs. Unemployment ticked down two tenths of a percentage point in August, in September, and again in October.

The last three months continue a steady upward economic trend in Minnesota that has taken place under a strong regime of Democratonomics that the Republicans are acknowledging they probably aren't going to overturn with their new State House majority.

Minimum wage goes up; job growth hums along. Minimum wage decriers, cry away.

54 comments

Senator-Elect Mike Rounds lies on Meet the Press:

And so part of the message has got to be that the bureaucracy, which has taken over, or the vacuum, because Congress has been dysfunctional, has not been doing their job. You've got a bureaucracy which is growing. We've got to get that bureaucracy back under control again [Mike Rounds, interview with Chuck ToddMeet the Press, NBC-TV, 2014.11.09].

The federal bureaucracy, the black beast Mike Rounds is charging to Washington to kill, is not growing. It is shrinking:

Federal State Local Total
October 2013 2,732,000 5,057,000 14,065,000 21,854,000
October 2014 2,711,000 5,066,000 14,137,000 21,914,000
change -21,000 9,000 72,000 60,000

Over the last year, the federal government has cut 21,000 jobs. Over the last six years, after briefly adding 629,000 federal jobs as part of the stimulus effort to tow the economy out of the ditch, the Obama Administration has given all those jobs back and cut another 75,000 from the 2.786-million strong workforce it inherited from the Bush 2 Administration.

Fewer civilians work for Uncle Sam now than at any point under President Reagan or President Nixon.

The federal bureaucracy is not growing. Mike Rounds's list of lies is.

29 comments

Sioux Falls restaurateur and known liberal Steve Hildebrand got to serve Governor Dennis Daugaard on Friday. As a tip, the Governor left a signal that if the Legislature wants to kill the minimum-wage increase we voters passed Tuesday, that would be hunky-dory:

So, Republican Governor Dennis Daugaard came into my restaurant this morning to meet with a newly elected Republican legislator who frequents the place. After their meeting and before he walked out the door, I asked the governor if he had a minute to talk to me. I asked him to not let Republican legislators repeal the cost-of-living adjustments for the minimum wage increase that the people of South Dakota just passed by a healthy majority.

His response: "I don't believe in the minimum wage. I believe we should let the market set the rates of pay." I said, great. Then people in South Dakota will work for $2.50 an hour.

And then I pointed out to him that Sioux Falls has a 3% unemployment rate, but that 50% of our school-aged kids qualify for free-or-reduced lunches - and that poverty is a REAL problem in our state. I asked him to pay attention to low wages, poverty and to take this very seriously. His aides, were very rude and escorted him quickly out of the restaurant. I was left with only one thought - the governor of my state doesn't care that families are working in poverty level jobs, can't make ends meet. Too bad he can't have a reasonable conversation with a local business owner who knows how hard it is for people to make ends meet when wages are so low.

And what a shame if Republicans attempt to repeal a law passed by the voters. Not that they haven't done it many times. But really, wages for people working in poverty-level jobs. Shame on them [link added; Steven C. Hildebrand, Facebook post, 2014.11.07].

Almost everyone is working, but with only the meager protection of a minimum wage still well below what workers deserve for their productivity, half of the families need help buying lunch for their kids. Governor Daugaard, should the market also determine which kids eat?

Blogger Michael Larson suggested that we should lower the Governor's pay to parity with the Lennox mayor's, $3,200 a year. Let's go one better: let's let the market determine Dennis Daugaard's salary. Remove his legally guaranteed salary of $107,121.62 (plus that really valuable house he gets to live in on our dime, and the nice state cars and planes that haul him and his rude aides around). Let him work, and at the end of each month, we'll conduct a poll to determine just what they think their Governor's labor has been worth. Maybe he'll get $10,000. Maybe he'll get $10, and Mrs. Daugaard will have to go jerk espresso at Pier 347 or substitute-teach.

I suppose we could argue that's how we do state executive salaries right now. We poll the "market"—comprised mostly the Governor's fellow Republicans in the Legislature—and they compose a state budget that locks in pay for the Governor along with all state employees.

But not one of these executives is anywhere near subsistence living at $8.50 an hour. Not one of these executives needs a second income to feed the kids. Not one of these executives faces the reality of a market that would throw them into welfare or bankruptcy in a month if the law didn't protect their basic dignity as workers.

Citizens, take your new legislators to coffee this month. Remind them that you are the market, and you have spoken: workers deserve at least $8.50 an hour, with indexed increases each year. Legislators, don't mess with Initiated Measure 18.

Update 14:04 CST: Todd Epp suggests some might call a Legislative repeal of IM 18 totalitarianism. Indeed, we might.

124 comments

Funny? Mean? Reaching? Tell me what you think of this new Senate campaign mailer submitted by an eager reader:

USW Rounds Knock Knock front

Who's there?

USW Rounds FBI mailerRemember: they're not kidding. The FBI really is investigating South Dakota's EB-5 visa investment program. And the card gets to the heart of the matter: regardless of how many dollars or jobs EB-5 brought to the state, Governor Rounds approved of and actively participated in a program whose director broke multiple laws and rules to stuff money into his own pocket and the pockets of the governor's supporters.

But who brings us this message?
USW Rounds Knock Knock address

USW Works—the United Steelworkers' Super PAC. Remember, anti-labor South Dakota: a statement isn't false just because a union says it.

My correspondent gets the impression this card is going out to Independent voters. Will it pull down Rounds's total? Will it lift Rick Weiland? Will it synergize with the big Sioux Falls endorsement of Larry Pressler?

27 comments

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

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