The Build Dakota Scholarship program created by Governor Dennis Daugaard and billionaire T. Denny Sanford promises 300 vo-tech students a year a free two-year education in return for three years of work in South Dakota.

KELO says vo-tech programs in South Dakota run between $12,000 and $15,000. The top end of that range puts the up-front dollar value of the Build Dakota scholarship on par with the Critical Teaching Needs Scholarship, created in 2013, which pays the last two years of tuition and fees for willing teacher candidates. However, the vo-tech students are getting a better deal: the teachers must promise to work in South Dakota for five years.

As we know, students accepting the Critical Needs Teaching Scholarship are trading $15K in tuition costs for $65K in sacrificed purchasing power available for working outside of South Dakota. Will Build Dakota Scholarship takers come out any better financially?

That math is uncertain: Governor Dennis Daugaard has not announced yet which job fields he will target with the new scholarship, so we don't know which wage data to compare. But let's take some guesses.

We'll focus on wages in South Dakota and the six adjoining states. Let's look first at median wages, the halfway point for wages in various fields. Here are the median wages for all occupations:

All Occupations
State Annual Median Salary Per-capita state taxation Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $32,380 $3,740 $28,640 92.8 $30,862 $4,884
MN $37,390 $4,858 $32,532 101.2 $32,146 $6,168
MT $30,770 $3,137 $27,633 102.1 $27,065 $1,086
ND $35,640 $4,057 $31,583 101.7 $31,055 $5,077
NE $31,840 $3,991 $27,849 97.7 $28,505 $2,526
SD $29,420 $3,052 $26,368 101.5 $25,978 $0
WY $36,990 $3,500 $33,490 94.4 $35,477 $9,498

South Dakota has the lowest median wage in the region. We have the lowest state and local tax burden, but our cost of living (by the most recent available data, 2014 Q3) is higher than the national average and even three ticks higher than Minnesota's. Our median adjusted post-tax purchasing power is four digits less than our neighbors'—4% less than Montana's, 24% less than Minnesota's, and 37% less than Wyoming's.

But hold on: that's all jobs, from bailiff and dishwasher up to nurse anaesthetist and CEO. Our vo-tech grads are aiming for a specific subset of jobs.

Let's look at the general category BLS calls "Production Occupations," where we should find a higher proportion of vo-tech grads:

Production Occupations
State Annual Median Salary Per-capita state taxation Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $31,550 $3,740 $27,810 92.8 $29,968 $4,186
MN $33,730 $4,858 $28,872 101.2 $28,530 $2,748
MT $30,970 $3,137 $27,833 102.1 $27,261 $1,479
ND $33,830 $4,057 $29,773 101.7 $29,275 $3,494
NE $30,230 $3,991 $26,239 97.7 $26,857 $1,075
SD $29,220 $3,052 $26,168 101.5 $25,781 $0
WY $44,270 $3,500 $40,770 94.4 $43,189 $17,407

Oops! Median pay is actually a little worse in this field, except in Wyoming, where median pay and post-tax adjusted purchasing power jumps to a $17K advantage over South Dakota'

Let's get specific. Within "Production Occupations," our governor talks a lot about welders:

Welders, Cutters, Solderers, and Brazers
State Annual Median Salary Per-capita state taxation Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $34,570 $3,740 $30,830 92.8 $33,222 $4,820
MN $38,760 $4,858 $33,902 101.2 $33,500 $5,098
MT $33,750 $3,137 $30,613 102.1 $29,983 $1,581
ND $43,010 $4,057 $38,953 101.7 $38,302 $9,900
NE $34,340 $3,991 $30,349 97.7 $31,063 $2,661
SD $31,880 $3,052 $28,828 101.5 $28,402 $0
WY $46,120 $3,500 $42,620 94.4 $45,148 $16,746
Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders
State Annual Median Salary Per-capita state taxation Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $36,890 $3,740 $33,150 92.8 $35,722 $4,729
MN $36,000 $4,858 $31,142 101.2 $30,773 -$220
MT $36,140 $3,137 $33,003 102.1 $32,324 $1,331
ND $37,760 $4,057 $33,703 101.7 $33,140 $2,147
NE $37,960 $3,991 $33,969 97.7 $34,769 $3,776
SD $34,510 $3,052 $31,458 101.5 $30,993 $0
WY $50,360 $3,500 $46,860 94.4 $49,640 $18,647

In these two job areas, the only place South Dakota beats on post-tax purchasing power is Minnesota, for welding, soldering, and brazing machine setters, operators, and tenders, and there our advantage is just $220, about 0.7%, or the cost of gas and a motel room to go see the Vikings play. Welders, cutters, solderers, and brazers come out over $5K better a year in Minnesota than in South Dakota.

But hold on again: these figures are median figures, the 50th-percential salary. Half the welders make more, half make less. We're trying to calculate the outlook for fresh-faced vo-tech grads. Welders probably need to work a while before they can prove they deserve more pay than half of their colleagues. We should thus look at salaries in the lower end of each field.

The Bureau of Labor Statistics has data on the certain percentile salaries in each occupation and each state (and you think your daily math is hard?). So let's try this: assume a new vo-tech grad jumps into a new job and, for a starting wage, gets the 10th-percentile salary (10% of workers make less, 90% make more). This kid's from South Dakota, and she would have qualified for a Build Dakota free-ride, so she's smart and good at her job. Second year, the boss raises her pay to the 25th-percentile. Third year, she gets another raise, to the median salary. On that pay trajectory, how do things look for our prospective welders?

Welders, Cutters, Solderers, and Brazers
State Annual 10th-percentile salary Annual 25th-percentile salary Annual 50th-percentile (median) salary Sum
IA $25,670 $29,460 $34,570 $89,700
MN $26,970 $32,410 $38,760 $98,140
MT $23,350 $27,510 $33,750 $84,610
ND $30,820 $35,240 $43,010 $109,070
NE $25,110 $28,870 $34,340 $88,320
SD $25,290 $27,750 $31,880 $84,920
WY $30,720 $37,530 $46,120 $114,370
Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders
State Annual 10th-percentile salary Annual 25th-percentile salary Annual 50th-percentile (median) salary Sum
IA $27,400 $32,370 $36,890 $96,660
MN $25,290 $29,260 $36,000 $90,550
MT $24,790 $31,460 $36,140 $92,390
ND $26,830 $31,910 $37,760 $96,500
NE $24,050 $31,280 $37,960 $93,290
SD $27,220 $31,240 $34,510 $92,970
WY $33,990 $41,400 $50,360 $125,750

With that fourth column, adding a year at the 10th percentile, a year at the 25th, and a year at the 50th (the median), we're getting closer to the real picture our vo-tech prospects face as they try to figure out whether taking the Build Dakota Scholarship is worth committing to work in South Dakota for three years. Let's plug those three-year income sums into our spreadsheet, subtract three years' tax burden, factor in cost of living, and see what happens:

Welders, Cutters, Solderers, and Brazers
State 3-yr income 10th-25th-50th 3-yr state/local tax burden Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $89,700 $11,220 $78,480 92.8 $84,569 $9,925
MN $98,140 $14,574 $83,566 101.2 $82,575 $7,931
MT $84,610 $9,411 $75,199 102.1 $73,652 -$992
ND $109,070 $12,171 $96,899 101.7 $95,279 $20,635
NE $88,320 $11,973 $76,347 97.7 $78,144 $3,500
SD $84,920 $9,156 $75,764 101.5 $74,644 $0
WY $114,370 $10,500 $103,870 94.4 $110,032 $35,387
Welding, Soldering, and Brazing Machine Setters, Operators, and Tenders
State 3-yr income 10th-25th-50th 3-yr state/local tax burden Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $96,660 $11,220 $85,440 92.8 $92,069 $9,494
MN $90,550 $14,574 $75,976 101.2 $75,075 -$7,500
MT $92,390 $9,411 $82,979 102.1 $81,272 -$1,303
ND $96,500 $12,171 $84,329 101.7 $82,919 $344
NE $93,290 $11,973 $81,317 97.7 $83,231 $656
SD $92,970 $9,156 $83,814 101.5 $82,575 $0
WY $125,750 $10,500 $115,250 94.4 $122,087 $39,511

Clearly, Wyoming beats us all for welding wages. A welder who stays in South Dakota instead of moving to Wyoming gives up over $35,000 in purchasing power over three years. A welding machine operator making the same choice gives up over $39,000. Choose South Dakota over Minnesota, and the welder loses over $7,900, but the welding machine operator gains $7,500.

But where the rubber hits the road—or where the vo-tech student doesn't!—is the scholarship question. Denny D. and Denny S. are offering you sharp welders (come on, after all this talk, you're going to include welders in the scholarship, right, guys?) $15,000 in tuition savings. If those welders don't take the scholarship because they want to work out of state, they have to earn back the $15,000 they spent on school.

Only the Wyoming and North Dakota welders and the Wyoming welding machine operators make more than $15,000 above the typical wages in South Dakota. The Build Dakota Scholarship will be worth it for a lot of welding candidates.

Let's try another job field. Our benefactor Mr. Sanford is all about health care, so let's assume we'll promote some health tech jobs. How will radiologic technologists do?

Radiologic Technologists
State 3-yr income 10th-25th-50th 3-yr state/local tax burden Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $116,610 $11,220 $105,390 92.8 $113,567 $14,184
MN $143,620 $14,574 $129,046 101.2 $127,516 $28,133
MT $121,360 $9,411 $111,949 102.1 $109,646 $10,263
ND $112,720 $12,171 $100,549 101.7 $98,868 -$515
NE $118,630 $11,973 $106,657 97.7 $109,168 $9,785
SD $110,030 $9,156 $100,874 101.5 $99,383 $0
WY $132,090 $10,500 $121,590 94.4 $128,803 $29,420

Again, assuming a $15,000 scholarship value, the potential Build Dakota Scholarship recipient thinking about leaving South Dakota to work in radiology for Montana, North Dakota, or Nebraska will want to think again. Future radiologists eying Minnesota or Wyoming will tell Dennis, "No deal!" Radiological aspirants looking at Iowa will have a tougher choice: for them, Build South Dakota and three years locked into South Dakota offers them less than a thousand-dollar net advantage.

How about bus and truck mechanics and diesel engine specialists?

Bus and Truck Mechanics and Diesel Engine Specialists
State 3-yr income 10th-25th-50th 3-yr state/local tax burden Salary in pocket after state tax Cost of living (2014 Q3) Adjusted post-tax salary power Additional purchasing power from working here instead of SD
IA $87,200 $11,220 $75,980 92.8 $81,875 -$5,311
MN $106,830 $14,574 $92,256 101.2 $91,162 $3,976
MT $90,440 $9,411 $81,029 102.1 $79,362 -$7,824
ND $110,530 $12,171 $98,359 101.7 $96,715 $9,529
NE $83,210 $11,973 $71,237 97.7 $72,914 -$14,272
SD $97,650 $9,156 $88,494 101.5 $87,186 $0
WY $120,030 $10,500 $109,530 94.4 $116,028 $28,841

Even without Build Dakota, if you're into diesel engines, you lose money leaving South Dakota for Iowa, Montana, or Nebraska. The four-figure puchasing-power gains promised by Minnesota and North Dakota don't beat the $15,000 value of our new vo-tech scholarship. But once again, Wyoming is the land of opportunity. Skip the scholarship, head for Sheridan, and in three years, you'll have earned back your tuition and cleared another nearly $14,000 over what you would have made back in Aberdeen.

I'd compare wind turbine service technicians, but South Dakota apparently doesn't have enough jobs in that field for BLS to count. (Hmm.... Governor Daugaard, you and the PUC could do something about that, couldn't you?) Job opportunities in that field are numerous enough to count in Wyoming, Iowa, Minnesota, and North Dakota, where the median annual salary for fixing wind turbines is $55,550.

Whatever the exact numbers above, the Build Dakota Scholarship makes working in South Dakota for the first three years of one's technical career more appealing. Possible future earnings in welding or radiology or diesel mechanicry in another state don't matter to the young person who can't get those jobs because she doesn't have the cash right now to go to vo-tech. Plus, with their "stay in South Dakota" requirements, our scholarship plans "get our hooks" into young workers early: in those first three years, they'll accumulate connections and obligations that will incline some fraction of them to stay, despite the greater earning potential available in many fields in most other states.

And therein lies the sneaky and arguably irresponsible part of these scholarship plans. The state is not investing in a long-term plan to raise wages (which would raise economic activity, which would raise tax revenues, which would raise the amount and quality of public goods...). The state is using its resources and Denny Sanford's resources to rope young people into working for less competitive wages. The state and Sanford are going to great lengths (and putting up real money is the greatest length our state government can go to) to keep their business pals from solving their own workforce shortages with the obvious free-market solution of offering bigger paychecks.

Vo-tech students, do your own math for your own field, and tell us whether the Build Dakota Scholarship will sway your decision to stay and work in South Dakota. Fellow South Dakotans, let's ask ourselves whether we do more to address a workforce shortage by lowering workers' entry costs or raising workers' ongoing wages.

Main data sources:

  1. Cost of living: 2014 Q3 C2ER data from MERIC: http://www.missourieconomy.org/indicators/cost_of_living/index.stm
  2. State + local tax burden: SD GOED: http://sdreadytowork.com/South-Dakota-Advantages/50-State-Comparison.aspx
  3. Wages: Bureau of Labor Statistics State Occupational Employment and Wage Estimates, May 2013: http://www.bls.gov/oes/current/oessrcst.htm

Final Thought: The state has an obligation to educate citizens. Business has an obligation to train workers. Would Adam Smith agree?

12 comments

Arizona/South Dakota billionaire T. Denny Sanford is using $25 million of his usury-gotten fortune to keep South Dakota state government from coming up with more of its own money to address workforce development. How very nice.

I suppose it's impolite to pester an elderly benefactor about the literal content of statements made in a fit of boosterism. But permit me to look at a few words from the gift horse's mouth, uttered yesterday at the rollout of the new Build Dakota vo-tech scholarship plan:

"I'm proud of everything that South Dakota stands for," Sanford said. "Productivity, a great health system and South Dakota Works. And it works in a good way. Not only do people work harder and have a better work ethic, but the system works. We've got a system unequal to anything else I've seen. We've got to get the people here to do it."

..."Go forward, South Dakota; let's get it done," Sanford said. "I know you will because everything we do here works" [Jodi Schwan, "Sanford, State Pledge $50 Million for Workforce Needs," that Sioux Falls paper, 2014.12.17].

Everything we do here works... that statement makes it hard to explain why we need this scholarship program in the first place. What happened to the New South Dakotans program that was Governor Daugaard's first big swing at workforce recruitment? Oh yeah: it didn't work. And if everything we have here works, why do we have a teacher shortage? And a road-repair shortage?

But we South Dakotans still work harder than everyone else, right? We have a better work ethic, right?

  1. A Bureau of Labor Statistics report from 2010 says that in 2008, South Dakota ranked 47th for average weekly hours and 51st for average hourly earnings in private industry.
  2. From 1977 to 2000, 25 states had higher annual labor-productivity growth than South Dakota. Our labor-productivity growth improved from 2000 to 2004, thanks to our riding out the 2001 recession a little better than the rest of the country, but 13 states still beat us on that metric in that period.
  3. This is a crude figure, but if you divide our gross state product by our population in 2013, you find that South Dakota ranks 22nd for economic output per person (see full chart below). However hard they are working, folks in 21 other states are generating more wealth per person than South Dakotans. The only neighboring state producing less wealth per person is Montana, which ranks 42nd in GSP per capita.
  4. Working harder isn't exactly a sign of progress. How hard do you think Mr. Sanford is working right now? American workers put in more hours than their European counterparts but report less life satisfaction.

I suppose the state's official position should be that Denny Sanford can say the sky is blue and Elvis is President, as long as he keeps the money coming. Denny Sanford can build our hospitals and schools and workforce... but let's not let him fabricate our facts.

State 2013 GSP $ Millions Population (2013) GSP/pop GSP/pop rank
Alabama 180,727 4,833,722 $37,388.79 47
Alaska 51,542 735,132 $70,112.58 2
Arizona 261,924 6,626,624 $39,526.01 41
Arkansas 115,745 2,959,373 $39,111.33 43
California 2,050,693 38,332,521 $53,497.47 13
Colorado 273,721 5,268,367 $51,955.57 18
Connecticut 233,996 3,596,080 $65,069.74 5
Delaware 58,028 925,749 $62,682.22 7
District of Columbia 105,465 646,449 $163,145.12 1
Florida 750,511 19,552,860 $38,383.69 46
Georgia 424,606 9,992,167 $42,493.89 37
Hawaii 70,110 1,404,054 $49,933.98 20
Idaho 57,029 1,612,136 $35,374.81 50
Illinois 671,407 12,882,135 $52,119.23 17
Indiana 294,212 6,570,902 $44,774.98 31
Iowa 150,512 3,090,416 $48,702.83 21
Kansas 132,153 2,893,957 $45,665.16 28
Kentucky 170,667 4,395,295 $38,829.48 44
Louisiana 222,008 4,625,470 $47,996.85 24
Maine 51,163 1,328,302 $38,517.60 45
Maryland 322,234 5,928,814 $54,350.50 11
Massachusetts 420,748 6,692,824 $62,865.54 6
Michigan 408,218 9,895,622 $41,252.38 39
Minnesota 289,125 5,420,380 $53,340.36 14
Mississippi 96,979 2,991,207 $32,421.36 51
Missouri 258,135 6,044,171 $42,708.09 35
Montana 39,846 1,015,165 $39,250.76 42
Nebraska 98,250 1,868,516 $52,581.83 15
Nevada 123,903 2,790,136 $44,407.51 33
New Hampshire 64,118 1,323,459 $48,447.29 23
New Jersey 509,067 8,899,339 $57,202.79 9
New Mexico 84,310 2,085,287 $40,430.89 40
New York 1,226,619 19,651,127 $62,419.78 8
North Carolina 439,672 9,848,060 $44,645.54 32
North Dakota 49,772 723,393 $68,803.54 3
Ohio 526,196 11,570,808 $45,476.17 29
Oklahoma 164,303 3,850,568 $42,669.81 36
Oregon 211,241 3,930,065 $53,750.00 12
Pennsylvania 603,872 12,773,801 $47,274.26 26
Rhode Island 49,962 1,051,511 $47,514.48 25
South Carolina 172,176 4,774,839 $36,059.02 49
South Dakota 41,142 844,877 $48,695.85 22
Tennessee 269,602 6,495,978 $41,502.91 38
Texas 1,387,598 26,448,193 $52,464.76 16
Utah 131,017 2,900,872 $45,164.70 30
Vermont 27,723 626,630 $44,241.42 34
Virginia 426,423 8,260,405 $51,622.53 19
Washington 381,017 6,971,406 $54,654.25 10
West Virginia 68,541 1,854,304 $36,963.19 48
Wisconsin 264,126 5,742,713 $45,993.24 27
Wyoming 39,538 582,658 $67,857.99 4
15 comments

So that's why Governor Dennis Daugaard didn't include a big workforce initiative in his budget proposal. He's going to do workforce development off budget with Sanford money:

Gov. Dennis Daugaard and T. Denny Sanford will announce a multi-million dollar partnership to address workforce development needs Wednesday in Sioux Falls.

The announcement will be held at Southeast Technical Institute but has statewide reach.

“South Dakota’s strong economy depends on a skilled workforce,” Daugaard said. “Denny Sanford is joining with the state to aggressively address this need.”

The partnership developed in recent months as First Premier CEO Dana Dykhouse and Premier Bankcard CEO Miles Beacom reached out to their founder and philanthropist Sanford to support workforce development [Jodi Schwan, "State, Sanford to Announce Millions for Workforce Development," that Sioux Falls paper, 2014.12.16].

Let's hope the Governor uses Sanford's money for something more productive than the first four years of Daugaardonomics. Let's hope that instead of throwing money away on ineffective recruiter subsidies, the Governor makes some real investments where they are needed most: creating jobs on the reservation, boosting education at all levels, and promoting higher wages for all workers.

Governor Daugaard will provide details tomorrow at 3 p.m.

37 comments

Here, have another turkey sandwich...

Pat Powers commits more blogospheric malfeasance with a gratuitous attack on Ann Tornberg worthy of the Stranahan School of "Journalism." If you're able to read past the paralyzing funny headline, in which the man who defines party hackery calls Tornberg and Jeff Barth "Democrat party hacks," you'll find Powers reaching for an excuse to mention "Ann Tornberg" and "sexual assault" in the same paragraph.

Powers drags up a 2005 incident in which some Sioux Falls Roosevelt student-athletes engaged in sexual activity on a school bus on the way home from a football game in Spearfish. The incident led to one player pleading guilty to misdemeanor sexual contact with someone under 16. Students and coaches were disciplined, although, per contract and policy, the district did not publicize that discipline.

Powers then makes out Tornberg to be evil for doing her job as teachers' union leader at the time and defending the privacy rights of employees. He cites this passage from an offline December 2005 article from Dan Lederman's opposition research folder:

Ann Tornberg, president of the Sioux Falls Education Association, said contract provisions to protect an employee’s privacy are crucial. ‘The policy protects the rights of the employee,’ Tornberg said. She said Homan and the school district had followed the letter of the contract. ‘I compliment her for that. They have a high degree of professionalism,’ she said “District: Contract prevents report,” that Sioux Falls paper, 2005.12.10, cited in Pat Powers, "Democrat Party Hacks Trying to Out-Hack Each Other to Be the New SDDP Chair,Dakota War College, 2014.11.28].

If Tornberg's answer bears any fault, it lies in not ripping Superintendent Homan for her incautious damage-control e-mail that alerted the media to the discipline of the coaches. Otherwise, Tornberg spoke simple truth: employee privacy matters. Contract provisions matter. There's no hackery there, and certainly no embrace of sexual misconduct, as Powers so Stranahannily insinuates.

South Dakota Democrats will spend the next couple of weeks debating the relative qualifications of Ann Tornberg and Jeff Barth (and maybe others!) to lead their party to recovery and victory in 2016. Pat Powers will have nothing of intelligence or integrity to add to that debate.

27 comments

Governing posts Bureau of Labor Statistics data showing job growth over the past twelve months in all fifty states. Without counting North Dakota's dangerous and poorly regulated Bakken job boom, South Dakota is slogging along in the middle among its neighbors:

State Job Change Oct 2013–Oct 2014 Average Monthly Change %Job Change Oct 2013–Oct 2014 Nonfarm Jobs Oct 2014
Iowa 15,400 1,283 1.0 1,556,900
Minnesota 49,400 4,117 1.8 2,847,000
Montana 6,800 567 1.5 455,100
Nebraska 8,300 692 0.8 991,800
North Dakota 22,500 1,875 5.0 471,700
South Dakota 6,000 500 1.4 422,700
Wyoming 6,200 517 2.1 298,100

To reinforce the point I made Friday, Minnesota has more progressive economic and fiscal policies, yet it is outpacing South Dakota on percentages for job growth.

4 comments

Agricultural industry groups complain that President Barack Obama's immigration action won't help them find the workers they need to bring home the bacon. In a brilliant display of rationalization, Hurley hog farmer Steve Schmiechel says the President's inaction and the free market will force him to break the law to stay in business:

Steve Schmeichel, a Hurley, S.D., pig farmer, said he hasn’t hired undocumented immigrants to work on his operation, but the growing labor shortage and ongoing challenge to find employees willing to work means he’ll probably need to soon. Schmeichel said farmers he knows who have hired undocumented immigrants describe them as reliable and willing to work.

“It’s difficult for us or anybody else to find people who are willing to work and do the job and not be afraid to get dirty to get it done,” Schmeichel said. “It’s something that we’re almost going to have to do. It’s our next step” [Christopher Doering and Bill Theobald, "Ag Largely Left Out of Immigration Plan," that Sioux Falls paper, 2014.11.21].

I guess South Dakota's hog farmers and dairy farmers are in the same situation as illegal immigrants. We flooded the Mexican market with subsidized American farm products, crushing the Mexican farm economy. Wal-Mart, sweatshops, and other fruits of NAFTA made things worse for Mexican workers. Mexican workers couldn't wait for the United States Congress or the President to expand and expedite H-2A visas. They couldn't wait to save up half a million dollars to buy an EB-5 visa. To feed their families, those Mexican workers needed to cross the border illegally. They had to. It was their next logical, justifiable, sayable-in-the-paper step, right, Steve?

Schmeichel and the rest of Big Ag just don't want to pay the wages that the local market would bear. They don't want President Obama or Congress to do anything, because that would take away their pool of cheap, exploitable labor:

Sanjay Rawal is the director of Food Chains, a documentary about farmworkers in the United States, which is released in theaters today. I got to chat with him about whether Obama’s failure to address farmworkers in his immigration reform is actually a significant setback.

“Obama is not addressing the needs of agricultural workers in this country,” he agrees. “The reason why the agricultural lobby did not push for farmworkers to be included – and in essence actually fought against it – was because they said that if farmworkers get a pathway to citizenship, they will no longer work in the fields, and [farms] will lose that labor force” [Eve Andrews, "Obama's Immigration Order Won't Help Farmworkers. What Can?" Grist, 2014.11.21].

But wait! We can still get Schmeichel off the hook. Don't blame farmers for the exploitation of migrant labor; blame Safeway and Hy-Vee:

The thesis of Food Chains, essentially, is that the exploitation of migrant farmworkers is a direct result of supermarket monopsony. In short, huge supermarket chains have maintained prices at artificially low levels as the cost of producing fruits and vegetables — in terms of land and equipment — has increased. To survive, farmers have no choice but to hire very, very cheap labor.

“Over and over, we kept hearing that the problem was farmers, the problems were labor contractors, but it seemed like the issues were much more systemic,” Rawal tells me. “And when we started following the coalition, we understood that the problem was really these gigantic corporations that control the entire supply chains. And these corporations can be ruthless” [Andrews, 2014.11.21].

A hog farmer resorts to breaking the law instead of paying market wages. Supermarket corporations refuse to pay producers the market value of their products. Consumers aren't making enough to afford food at the prices legal employment practices and fair payment of farmers would set because their corporate employers aren't paying living wages. That's the American "free" market at work.

What's the real tyranny here? Who in our society is exercising dictatorial power? And what was I saying the other day about slavery?

194 comments

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

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