As Governor Daugaard begins dog-and-pony-showing the results of his Workforce Summits, newly Hillsified Seth Tupper takes a look at the tight labor supply in Rapid City. Predictably, we get some smoke about how far a dollar stretches in South Dakota. John Tsitrian pounds down the relevance of this excuse for low wages.
Tupper's own article offers the best counterexample to South Dakota's faith in low cost of living and high quality of life to overcome low wages in attracting workers, the Bakken oil fields:
Duff Kruse, president and general manager of Adams ISC in Rapid City, said another factor is the demand for workers in North Dakota’s booming oil patch. His growing manufacturing and repair firm employs 68 workers, including steel tradespeople such as welders, mechanics and machinists.
“We pretty much run help-wanted ads for welders and other skilled people nonstop,” Kruse said. “The last two years, I don’t think there’s ever been a time when we haven’t had help-wanted ads running.”
While he’s paying skilled tradespeople $35,000 to $60,000 a year, he has heard workers in similar jobs are making up to $30,000 more for the same kinds of jobs in the North Dakota oil patch....
Benjamin Snow, president of the Rapid City Economic Development Partnership, also identified the pull of the North Dakota oil boom as a factor in Rapid City’s tightening labor market. Almost anyone who wants a job in the oil patch can have one immediately, he said [Seth Tupper, "On Labor Day, Jobs Aplenty in Rapid City Area, but Wages Are Low," Rapid City Journal, 2014.09.01].
Think about the Bakken. Under the South Dakota state religion, no one would ever go work in the Bakken. North Dakota sucks. In Williston, milk costs $5 a gallon, rent averages $2,000 a month, and dye and a haircut cost $100. And for that high cost of living, you get to live amongst a bunch tired, cranky men in worse terrain and winters than the bleakest corners of South Dakota.
And yet workers flock there instead of beautiful, sunny Rapid City for one obvious reason: better wages. It's that simple.
Whatever else Governor Daugaard tells you today and tomorrow, boil any prescriptions for bringing more skilled workers to South Dakota down to one simple plan: pay workers more.