Augustana College takes up the back page of my Monday paper with photos of its “Forty Under 40,” a roster of 41 outstanding graduates.
Out of the 41 youngish graduates listed, 14 appear to remain based in South Dakota. That’s 34%.
Augustana says South Dakotans make up 45% of its student body. The ad doesn’t list where the students came from, but among this non-scientific sample of the best and brightest at Augie, among students from relatively higher-income families who spend four years studying and working in South Dakota’s most opportunity-filled job market, South Dakota still doesn’t do very well at retaining talent.
As we learned last fall, South Dakota’s public universities manage to keep about 73% of their South Dakota-raised graduates and 33% of its out-state students in South Dakota. Augie’s ad shows that brain drain is a problem at South Dakota’s private and public colleges.
I’m reminded of the SDSU ad campaign, “You can go anywhere from here.”
Funny you mention it Nick – I recall the vast majority of the alums featured within that ad campaign were employed in states other that South Dakota.
The brain drain issued will continue to haunt South Dakota for as long as we have average wages hovering somewhere under 45 out of 50 states. We can hear stories about how employers can take their people out for a beer on a Friday afternoon or how they can fund trips to help others… but at the end of the day, the salary is the deciding factor in more cases than not.
If we are talking about a 10% difference in pay it probably won’t be such a big deal, but if a teacher or nurse or engineer realizes they can boost their income by 20-50% simply by moving a state or two away it becomes increasingly difficult to convince them it is a bad idea. Once young people form families and start estabishing roots then it takes more convincing to get them to relocate… but for graduates straight out of a University with no commitments to the area? That is a tough sell.
You’ve hit the nail on the head Craig. Low wages will haunt the South Dakota labor market for as long as we market the state as a low cost place to do business. There is a large, well educated, and willing potential work force here in SD. But if employers are unwilling to pay market rates for labor workers will go to places where the market rewards labor. It’s not that hard a concept to understand.
Funny thing is – Sanford and Avera both struggle to recruit and retain top talent and they are well aware of the problems here. Other large companies such as those in the financial services industry have struggled to the point that in many cases their top leadership is no longer in Sioux Falls but instead based out of other areas where they fly in a handful of times per year for meetings and pep talks and then fly right back out.
These companies know they can’t easily attract people to this area. Yes there are many reasons such as the weather, cultural opportunities, etc. but salary continues to be the driving factor for the majority. When the same company pays someone in Sioux Falls $50,000 a year but that exact same position earns $65,000 in the Minneapolis/St. Paul area or over $75,000 in San Diego or Boston – well it doesn’t take a rocket surgeon to figure out why people leave, and in the case of the cities they surely aren’t leaving for the tropical climate.
The arguments of cost of living don’t hold up either. A new car doesn’t cost more in Minneapolis than it does here (although registration and license plate fees are more). Clothing and food don’t have significant differences and in fact if you have ever visited a small town South Dakota grocery store you quickly realize it is cheaper to shop at Whole Foods than it is in one of those places. Housing can be much more expensive in the core of a city, but I happen to know a family that just recently relocated to the cities from Sioux Falls and they bought a newer home of comperable size in arguably a nicer neighborhood for $20,000 less than the one they sold in Sioux Falls. They will end up spending more on fuel from the commute, but all things considered they still come out ahead.
Even if housing were more expensive in every case the increase in wages is more than enough to offset it and then some. When you consider lifetime earning potential and consider growth potential for employer sponsored retirement accounts, bonus payouts etc. it becomes a no-brainer for people to look elsewhere. I don’t expect South Dakota to pay as well as San Diego or New York, but shouldn’t we at least strive to pay our people to the point we aren’t consistently ranked in the low 40s for pay out of the 50 states? How about reaching to be ranked at or above 39th out of 50?
How about a new marketing slogan – “South Dakota – Great Faces, Great Places, Average Salaries… and We’re OK With That”
Send it to DoNothing
Thats mine great faces low wages South Dakota.
“Great faces, low wages” good one, Moses!
Nick, that was my first thought too. We always looked at it as, “You can go anywhere from here…, because you sure as heck don’t want to stay here.”