The South Dakota State Employees Organization is calling for the Legislature to study state worker pay and benefits. SDSEO exec Eric Olilla tells WNAX that the Legislature has resisted previous calls for such a study.
What would the Legislature see if it took that look? According to the Bureau of Labor Statistics 2019 Q2 Quarterly Census of Employment and Wages, state employees nationwide make 9.9% more in average weekly wages than private sector employees. In South Dakota, state employees on average make 16.6% more than the private sector average.
But that state-worker advantage comes in part from the fact that South Dakota’s private-sector wages are only 77.1% of the national average. Only two states, Idaho and Montana, have worse private-sector pay. South Dakota’s state employees make 81.8% of the national average weekly wage for state employees, state workers in twelve other states have greater gaps between their average checks and their national counterparts’.
So sure, state employees paychecks look pretty good, compared to the skinflint private-sector wages we pay other South Dakota workers. But unless they are related to Kristi Noem, South Dakota state employees could go to 37 other states and make more money for their services.
Related State Stats:
- Again, no, low cost of living does not make up for the low wages of either private or public employees in South Dakota. Missouri’s Economic Research and Information Center pegs South Dakota’s 2019 Q3 cost of living at 96.5% of the national average. One can live more cheaply in 23 states.
- BLS says the average weekly wage for South Dakota’s state workers is $975. Kennedy Noem’s current weekly wage is $1,113. Kennedy’s brother-in-law Kyle Peters is getting $1,138 a week.
After being involved in MANY discussions about wages in SD, I have found that “fairness” and “comparisons” do not matter. What matters is 1) Do we value the work that a job does? and 2) are we able to hire people to do that work? Only those ruthless, bottom-line discussions matter.
We only cared about teaching salaries when we had classrooms with students and without teachers. Absent the real shortage (and the opportunity lost to our students), the discussion never moved forward.
There was a very comprehensive study done in the 80s by an outside agency. It was somewhat controversial at the time. State employees were dubious. It was a time when state government wasn’t paying enough to attract new workers and keep the mid-career employees from leaving for other states or the private sector. I might have some of the details wrong, but this is how I recall that process worked.
The study looked at tasks done in every state government job classification. I recall having to write down/classify everything I did in my state lab job at the time and compare it to the job description, then make any edits to the job description that might be needed in consultation with our supervisor. It was a pretty detailed process. Then all jobs (with their associated tasks) were compared to similar jobs in public and private sectors in the state and region. Then they calculated something called “job worth,” which was, if I recall, 60%-75% of a regional pay range for the job/tasks done. Most state employees’ actual wage fell below “job worth.” So, the commitment was made to move state wages for each position up gradually over about 10 years to “job worth.” People would get an annual cost of living raise, plus an additional raise to move the position up closer to “job worth.” Once the positions reached “job worth,” or if the position was paying over job worth, the employee would only get a cost of living bump.
The question was: would governors and legislators honor that 10-year commitment to raise wages up to “job worth?” I believe there were a couple years when economic conditions made it impossible to keep that upward movement to “job worth” commitment, but in general they did.
I started my consulting career working with Gerry Andrews in the private personnel-focused consulting business he started after leaving State Government. For those of you who may remember, it was under Gov. Kneip, and led by Gerry, that the entire structure of SD’s state government was reformed. Departments, eliminated, consolidated, created and so on. Part of that effort included a process similar to that which Donald describes above.
The focus of my work with Gerry for the year and a half I was there before going on to grad school was on the sorts of compensation structure analysis and revision described. Did a few of them.
o is correct in what the foci of compensations studies needs to be to an extent. Donald is accurate in his description of the process by which an analysis of task functions and relative worth – for that task performance is accomplished.
But the element that o neglects is a consideration of market forces – competition. And that – a consideration of the market forces/competition is what I took Cory’s presentation to speak to – and not “fairness”. If fairness applies anywhere it is what the analysis and adjustment process addresses.
I think the problem comes when there is no commitment over long-term, as occurred with teacher pay, and a structure geared to yearly budgeting. Governors and legislators come and go. Economic conditions change. No session of a Legislature can bind a succeeding session. There’s a lot of reasons why public sector workers get shafted. So, there has to be overwhelming buy-in by both caucuses, institutional memory, education and re-education of members regarding the commitment, and a public that understands or at least accepts prioritizing funding in order to keep the commitment.
Too often these pay issues are looked at as election year problems with little real commitment beyond the election.
Mr. Pay refers to what I think they called the “Haying Study” because it started with those employees who cut hay, then expanded to everybody writing down everything they did in minute increments. I heard it all went away some time ago. They should have Mr. Pay and grudznick come in and do a new study and we could do it for fairly cheap. A couple hundred grand, I’d guess, would get them a really good study. But we would need carte blanche to order people to do what we wanted and give us all the data we needed.
What that would take, Mr. Pay, is an effective government. I.E., a government that does what it intended to do – assure the best welfare of the citizenry it governs. That is something other to an approach that is driven by adherence/commitment first to furtherance of a political ideology or agenda as opposed to a regard primarily for the immediacy of the public welfare.
SD may have to emulate Idaho. They have an organization called “Reclaim Idaho,” 100% grass roots. It developed organically out of rage at their GOP owned state government.
Idaho has I & R, and passed an R for expanded Medicaid. The legislature reversed it and Reclaim Idaho was born. Their petition to put Medicaid to a vote succeeded and it passed by 62%.
Their GOP state lege is continuing to obstruct the will of the citizens so Reclaim Idaho remains active. Why they don’t vote the SOBs out I don’t know, but the I&R process continues as the citizens’ voice.
After Cory wins this lawsuit against the SDGOP, SD citizens need to “reclaim” their state too, and rein in an “elitist” lege that does not care in the least about the will of the voters.
grudz – the state has nearly 20,000 employees. You think you can get everything you need to fully understand their job tasks from one of them for just $10 worth of your effort?? Including your travel time, collation of data, analysis, comparison of similar jobs in other organizations, creating a functional pay-scale recommendation set – including advancement and incentive scenarios?? Boy you really do work cheap. – Or maybe compensation at that level would really just be reflective of the adequacy of the work you would do?? I can tell you – I did the same thing for an organization with about 200 employees – all in one building. It took me 2 months just to get the interviews done. 10 times the # of employees would take at least 20 months. And even then – all you’d have is a room full of notes to start sorting through.
Debbo, as I’ve said many times – the ONLY way to prevent a legislature from nullifying the will of the people exercised via the I and R process is to get an amendment passed to the constitution that does what California’s does. That says that the ONLY way an I or R can be altered is by another I or R. What the people decide at the ballot box can only be altered via a decision of the people at the ballot box.
Mr. Schriever, in looking at data on the websites I’d say they have around 8-10,000 employees. Mr. H posted pictures of graphs of it. At least the kind of employees that would be studied for these kind of raises. And Mr. Pay and I each need one hundred thousand dollars, just to begin. Plus, we don’t need to study every single one of the 10,000 employees, we need to study each of their jobs.
But, you’re probably righter than right, Mr. Schriever, and Mr. Pay and I will need $2,000,000 dollars to provide a higher quality study, which you suggest is required.
Example: How many desk sitters are there? How many HP storm troopers? I’d guess hundreds of each. But we only need to study the pay of those 2 jobs. Remember, we will be a commission empowered to act however we want, and most will be please with our recommendations but surely those who are overpaid will be unhappy when our studies show they need to get some haircuttings.
Debbo, I’m all for reclaiming the state… but are there enough voters out there who would rally around the issue of state employee pay? I’m pleased to hear the SDSEO exec speaking up, but are state employees willing and able to advocate for themselves in the public arena? Will they dare step out and advocate for the kinds of Legislative and gubernatorial candidates who respect government work and are willing to maintain a long-term commitment to paying fair wages for that work?
Mr. H, is not this SDSEO a union representing all of the state employees and they could vote to strike and march about the capitol building with signs, like the teacher’s union used to do back in the day?
I’m going to speculate that private sector pay statistics do not include profit sharing or bonuses, which do not happen in government jobs. Other very common private sector benefits can include free use of company vehicle, equipment and facilities, which I speculate are not included in the private sector pay statistics.
Mr. Scott, we do know that government jobs come with a lot of free food. That can add up, too. The legislatures all get paid around $150 a day to eat and drink and they are fed like kings in the capitol building all day and then wined and dined at the finest eateries all night. Who knows how much free food gets trucked in when the legislatures are not meeting to feed all the other hungry mouths.
“the ONLY way an I or R can be altered is by another I or R.”
I agree Richard. That’s indispensable and may be one of the items Reclaim Idaho is working on now. There as well as SD, it’s the Kochs and like right wing groups that are trying to silence the voters. They know better than those silly South Dakotans. 😠
“Reclaim Idaho?” Sweet baby jeebus! Idaho is almost as libbie as they come, and there are members of the alt-left trying to swing it even more to the long-hair side of crazy?
Yup, grudznick was righter than right again. Reclaim Idaho is run by a bunch of California politico-hack leftists with a lot of out-of-state money.
https://lmtribune.com/opinion/what-is-reclaim-idaho-who-knows-but-grassroots-it-s/article_9c46d09b-ed51-5a82-a865-a2cb53434178.html
Idaho is “as libbie as they come?” I question your credibility, Grudz.
Idaho Voter Registration and Party Enrollment as of May 3, 2018
Party Number of Voters Percentage
Republican 403,771 49.86%
Unaffiliated 305,980 37.78%
Democratic 90,230 11.14%
Libertarian 6,733 0.83%
Constitution 3,006 0.37%
Total 809,720 100%
Scott, you pose an interesting question about methodology. The BLS QCEW FAQs lead me to this explanation: “Under most State laws or regulations, wages include bonuses, stock options, severance pay, the cash value of meals and lodging, tips and other gratuities, and, in some States’ employer contributions to certain deferred compensation plans, such as 401(k) plans…. Covered employer contributions for old-age, survivors, and disability insurance; health insurance; UI; workers’ compensation; and private pension and welfare funds are not reported as wages. Employee contributions for the same purposes, however, as well as money withheld for income taxes, union dues, and so forth are reported, even though they are deducted from the worker’s gross pay.”
It could have changed a lot since then, Mr. Ryan, what with all the out-of-state big-dark-money coming into Idaho from California,
Sure, it’s possible the demographics of an entire state that’s historically been almost entirely red did a complete 180 in a year. It’s also possible there’s a giant invisible unicorn in the sky.
It’s okay to be wrong, grudz.
Neal St. Anthony is a business writer for the Strib. He’s a middle-of-the-road guy and he’s got some sound suggestions for the economy:
I’m worried. The middle class is struggling as the top 10% get richer. There are steps that would strengthen our economy, broaden prosperity and ensure a better future for more folks:
• Boost renewables. The fastest-growing, good-job industries in rural Minnesota and urban America involve a greener, low-carbon economy, from wind and solar power to innovative software that helps us conserve energy and be more productive. The renewables industry, despite recent cuts to tax incentives, will prosper because of public and business support and because they are economical investments that promote health.
• Raise the federal adult minimum wage from $7.25 to $10 by 2022. Minnesota is already at $9.86. Many states lag.
• Enact a working-class tax cut. They buy stuff that stimulates the economy, not government bonds to finance our malignant debt.
• Cut the Social Security tax on wages; offset the tax cut by extending it to all incomes, not just wages up to $133,000. The rich get richer off capital and investments.
• Bail out Medicare, which is in danger of insolvency, partly with a small tax on investment income and gains. After all, the affluent live longer than working stiffs and the poor. They benefit much more from longer runs of maximum Social Security and federally subsidized Medicare and Social Security payments.
• Add a carbon tax of $25 per metric ton on greenhouse gases, such as from oil, natural gas and coal. This can raise several hundred billion annually, pledged to federal debt retirement. Raise the earned-income tax credit to protect the working poor and low-income households who otherwise would pay a disproportionate energy penalty. The U.S. should be the global leader to a renewable-energy-driven economy by 2050.
• Reduce mortgage-interest deductions over five years to a maximum of $5,000 annually. That’s billions in tax savings and less housing inflation.
• Increase the federal gas tax over five years from 28 cents to 38 cents. Dedicate the funds to road maintenance and mass-transit investments. Protect working-class households with a higher earned-income tax credit.
• Eliminate, finally, the “carried interest” tax break on gains for hedge and private-equity fund managers who pay a capital-gains tax rate under 25% instead of income taxes of up to 37%. It is essentially income from investors and investments.
is.gd/Rpt3xu