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South Dakota Scapegoats Unemployment Assistance to Distract from Long-Standing Failure to Build Worker-Friendly Economy

Governor Kristi Noem is treating South Dakota’s chronic labor shortage as a pretext for cutting off pandemic unemployment benefits to South Dakotans, effective June 26:

“Businesses across the state continue to say they would grow and expand, if it wasn’t for the lack of workers. Help wanted signs line our streets,” said state Labor and Regulation Secretary Marcia Hultman. “South Dakota is, and has been, ‘Open for Business.’ Ending these programs is a necessary step towards recovery, growth, and getting people back to work.”

South Dakota was the only state to not apply for the federal Lost Wages Assistance (LWA) supplement last fall. Additionally, South Dakota did not opt into the federal Mixed Earner Unemployment Compensation (MEUC) program in December 2020.

South Dakota elected to participate in three unemployment-related programs in connection with the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Continued Assistance to Unemployed Workers Act of 2020.

  • South Dakota will no longer participate in the federal Pandemic Emergency Unemployment Compensation (PEUC) program, which affected claimants who have exhausted their traditional 26 weeks of regular State unemployment compensation.
  • South Dakota will no longer issue supplemental $300 weekly payments to claimants under the Federal Pandemic Unemployment Compensation (FPUC) program. This payment was made to all claimants who were receiving unemployment benefits regardless of the program under which they are being paid.
  • South Dakota will no longer participate in the federal Pandemic Unemployment Assistance (PUA) program. PUA currently provides benefits to the self-employed, the underemployed, independent contractors, and individuals who have been unable to work due to health or COVID-19-related reasons.

The termination will be effective on the week ending June 26, 2021, for all three programs. South Dakota will continue to pay regular State claims. The agreement signed to initiate these programs allows South Dakota or the U.S. Department of Labor to terminate the programs upon 30 days’ written notice to the other party [South Dakota Department of Labor and Regulation, press release, 2021.05.12].

The Department of Labor could just enforce existing rules better to track down whatever handful of people may be illegally turning down offers of full-time work and continuing to collect unemployment checks. But such diligent governance would likely distract the Governor from her Presidential campaign, and making government do its job of helping people while preventing abuse of public assistance isn’t nearly as arousing for Republicans as cutting off benefits to everybody.

Congressman Dusty Johnson thinks public assistance is keeping people out of the workforce. But as John Tsitrian notes in his detailed and well-sourced analysis, people receiving higher unemployment benefits appear to search even more intensely for work. And here in South Dakota, the extra unemployment assistance does not appear to be keeping workers out of the workforce. According to the Department of Labor, we ended 2020 with over 3,000 more workers than we started with. The March 2021 number of unemployed workers was only 50 more than the number reported last March. And as of this March, says DOL, “South Dakota establishments have recouped about 98.8% of the worker levels they had in March 2020.”

Retailers’ lobbyist Nathan Sanderson admits that South Dakota’s unemployment rate is now 2.9%, below the 3.1% pre-pandemic level. Pandemic unemployment benefits thus appear to be a convenient scapegoat for the professed panic of South Dakota’s retail class over a problem that has existed for years. “Unprecedented Workforce Shortage,” KSFY said in 2018. “Plenty of Jobs, Not Enough Workers,” Pew’s Stateline reported in 2012 as it discussed Governor Dennis Daugaard’s five-million-dollar effort to use private recruiting firm Manpower Inc. to tackle South Dakota’s worker shortage:

The proposal is not intended to create a permanent relationship between the state and Manpower. Instead, it is a placeholder plan for use while the state ramps up longer-term job-training efforts to better match its own workforce with the needs of employers. South Dakota has an unemployment rate of just 4.2 percent, the third-lowest in the nation, leaving many employers struggling to find the technically trained workers they need.

…The question now, as both Manpower and state officials acknowledge, is whether out-of-work, skilled professionals from other states will see South Dakota that way.

…The state faces a dearth of affordable housing in some areas, and interested workers are likely to have many questions about South Dakota, both before they agree to move there and after.

…Robert Meyer, branch manager of the Manpower office in Sioux Falls, will help coordinate the company’s recruitment efforts around the country, and says there are “definitely some good things that can bring people to South Dakota,” including the low crime rate, the lack of a state income tax and even excellent hunting and fishing opportunities. But Meyer is careful not to gloss over one frequently discussed negative. “Winters are pretty harsh in South Dakota,” he says, “and it’s good for people to know that up front” [John Gramlich, “In South Dakota, Plenty of Jobs, Not Enough Workers,” Pew: Stateline, 2012.02.14].

Daugaard’s Manpower plan flopped, as apparently did whatever else our elected officials have been doing over the last decade to address the workforce shortage, because here we are still talking about a workforce shortage. As John Tsitrian wrote in 2014, “South Dakota’s labor shortage is symptomatic of a much larger problem“: low wages. Low pay doesn’t get highly educated workers to come brave the harsh weather that Manpower’s Meyer cited in 2012. Low pay doesn’t get people to stay and work here; the Drexel University report that Tsitrian cited in 2014 noted that South Dakota had the fourth-highest number of folks born in state who live in other states:

Currently, about 1.03 million residents of the U.S. reported that they were born in the state of South Dakota out of which about 540,000 have remained residents of the state. This is among the lowest fraction of state residents to birth residents in the nation. South Dakota is ranked 4th highest among all states in the nation in the share of births residents who resided in another state during 2011-2012, with 488,000 persons or 47 percent of all living persons who were originally born in South Dakota now residing in other states. Offsetting this outmigration, were about 262,000 persons who currently reside in South Dakota who were born in another state, along with about 27,500 foreign born residents. During 2011-2012 about 65 percent of South Dakota residents were born in the state and about 31 percent moved to South Dakota from another part of the U.S. Foreign-born residents accounted for about 3 percent of the state’s population at that time. South Dakota’s foreign-born population share is among the lowest in the nation. South Dakota had the 4th lowest foreign-born share of its total resident population among all states in the nation [Nesta P. Fogg and Paul E. Harrington, “Growth and Change in South Dakota Labor Markets: An Assessment of the State’s Labor Market Imbalances in a Weak National Recovery,” Drexel University Center for Labor Markets and Policy, February 2014, pp. 10–11].

More people leave South Dakota than move here: that’s the market saying South Dakota doesn’t offer as much opportunity as other places. Offering less unemployment assistance doesn’t overturn that market judgment; in one more small way, it reinforces that market judgment.

Cutting unemployment benefits is just the latest excuse South Dakota’s political and economic leaders need to distract voters and workers from South Dakota’s failure to address the real problems in our economy that deplete our labor pool and hinder South Dakota’s economic development.

28 Comments

  1. mike from iowa 2021-05-13

    Whining about unemployment insurance is a magat talking point being spread by most magat guvs across this once great land.

  2. O 2021-05-13

    My radical question is: do we have too many jobs in SD? Are businesses opening and hoping for profit even though there is not the ability to staff the needed positions — much less at the low wages those business require for the profit margins they want?

    One element that is not often spoken of in this analysis is how college costs factor in. I believe that many teenagers are not working because as they look to the cost of college, the price is SO enormous that no amount of minimum wage effort can make a dent on a potential $64,000 price tag. What is the difference between not working and $64,000 debt and working in a miserable job to drop that debt to $58,000? Working does not meaningfully help pay for college, and that is different from 20 years ago.

  3. Donald Pay 2021-05-13

    O is right. Students and some Moms are making rational decisions, both economically and from a public health standpoint. It may not be what they actually want to do, because working has intrinsic benefits other than money, but it’s better for students and moms to skip the lower wage public-facing service job and do something else. Students can take another 4 credits and summer courses and finish early, thus saving money. Moms can stay home and save on child care. Want to change that calculus? You have to increase wages and benefits, treat people better, provide free or reduced-fee child care, provide free or reduced tuition, etc.

  4. Jake 2021-05-13

    When the private sector employers in South Dakota stop daydreaming of the profits to be had suckling at the socialist teat of Federal $$$ thrown into the public trough through grants, out-right subsidies (farm) and the millions of recent Covid excuse handouts to businesses not too badly affected by the pandemic and focus on paying wages designed to lure good employees to their company they will worry will flourish.
    Rapid City area based businesses almost had heart attacks when they thought the base might close and dry up that teat.
    They’d rather sit around a beer or cocktails with their cohorts and whine about not getting help or “No one wants to work” instead of paying more to the people doing the work.
    When faced with a ‘shortage’ -they blame the person laid off following their example and taking the federal $$$ offered to the unemployed for a short time and ask Noem to cut off those benefits to FORCE them back to work. ‘Small government’ Republicans seem to love it when government forces someone else to do something against their will.
    If there’s no place to live that is affordable, people won’t come and take those jobs. Our tourism employers want the feds to let more foreign workers in that are housed in employer owned housing so they can take away jobs that should pay more and attract local-year long residents . They seem to love the modern method of ‘slavery’ – hiring people from down-trodden countries to staff seasonal jobs.

  5. Spike 2021-05-13

    You nailed it Jake. Thanks

  6. Mark Anderson 2021-05-13

    The people who used to work starvation wages in restaurants and the rest of the service “industry”, have gone into greener pastures. There really should be a nationwide remaking of that “industry” so there are livable wages. It could involve higher prices to eat folks, a 15 at least. minimum wage, no tips. Just a straightforward job that pays a living wage, none of the two dollars an hour and tips bull that happens now.

  7. O 2021-05-13

    Reliance on tipping is an abhorrent business practice.

  8. Arlo Blundt 2021-05-13

    Well…one thing that will force wages and employment up is construction jobs, specifically road construction. Those jobs put a lot of young people through college, certainly did during the “building the Interstate Highways” years. Good wages, plenty of overtime, tough work,. Need to get Biden’s infrastructure bill passed and going in South Dakota.

  9. Mark Anderson 2021-05-13

    Arlo, those summer construction jobs got me through college, building steel tower lines through central So Dak, electric lines through downtown Huron, below ground. Remember it well, the first week was the test, the long haired college boy jackhammering the cement. This was when construction workers had very short hair. It made college tough because the first two weeks were party time. It was union work too, great pay for the time. I remember the 75lbs of torque on those steel towers, I was too ignorant to be scared, only slipped once that was enough for focus. A definite learning experience, more than college. I figured after four summers I’d constructed enough.

  10. Arlo Blundt 2021-05-13

    Well…Mark, I’m with you. I was involved briefly, for a couple summers, operating a dump truck building overpasses on I-90–Mt. Vernon to White Lake…scary work…the truck driving crew was a hard drinking bunch who didn’t get much sleep, kept the wheels rolling from 6 AM to sundown, and kept a sharp eye out for the foreman, who was a man of strict observance of the rules. Tip one over and you were down the road…literally..walking back to the yard.The pay was great. Peter C. Kiewit Construction had the contract. I knew absolutely nothing about driving a dump truck but it was either learn or walk. Got fired once, laid off once when a group of more experienced guys who worked for the company became available after another job was completed. I didn’t care. I took the money and ran back to college.

  11. Porter Lansing 2021-05-13

    Blaming UI for worker shortage is like blaming virus testing for high Covid numbers.

    No wait, she did that, too.

  12. Arlo Blundt 2021-05-13

    Well. you’re right Porter, Republicans have a cognitive disconnect when it comes to cause and effect.It comes with the premise that the wealthy and powerful are, somehow, to be pitied as “victims” of the conniving poor.

  13. Porter Lansing 2021-05-13

    -You nailed it, Arlo.
    -Don the Con’s entire platform is based on “false victimhood”.
    -Noem’s claiming it also by attacking Critical Race Theory.
    -She doesn’t have a clue about what minorities experience.
    -She’s from Castlewood, for gracious sakes.
    -The only minorities in Castlewood are Norwegians being exploited by Germans.

  14. grudznick 2021-05-13

    Whining about low pay is for lazy people. Get out there and work harder, you will get more money. If you don’t like the pay you are getting there are many other jobs to choose from. Even the out-of-state name-callers here agree with that.

    Work harder. Stop whining. No free breakfast money for people who aren’t working.

  15. grudznick 2021-05-13

    Mr. Blundt is right about getting young people out there with some good, muscle-hardening, blue-collar work that pays a nice wage. That is so much better than them sitting around playing those video games in their parents basement collecting the free breakfast money on the dole and not learning the meaning of hard work. Mr. Blundt, good on you. grudznick, too, worked a good share of tough jobs that taught me many life lessons.

  16. CraigSK 2021-05-13

    Grundz, think you missed , O, Donald, and Jakes, comments. In this state working harder does not get you anywhere. Your 64,000 debt I is now only 58,000 after working hard all summer and making someone else rich from their government contract. The pay and benefits do not add up to a good life in this State.

    If you are receiving low wage, WHY can’t one complain? If you are receiving low wages I bet the last thing you are is lazy. The lowest paying jobs usually work you the most. Ie, teachers, CNA, housekeeper, etc. There are NOT many other jobs,.. there are many jobs that pay the same poor wage.

  17. David Newquist 2021-05-13

    Many comments here and in Cory’s post address the problem. Over the years, post-secondary education has grappled with outmigration. The number of students who use their degrees as passports to other states has troubled the state as long as I’ve been here. Post-secondary institutions saw that the outmigration was increasing at high school graduation as it occured to students that it might be an advantage to obtain their educations closer to where the good jobs are. To recruit such students, NSU for a time adopted the motto “Gateway Institution” to indicate it was a pathway to better opportunities. It was a fairly successful recruiting device, but it sent state economic officials into a rage.

    The problem is not a lack of jobs, but a lack of good jobs. Pay is low and work environments are not the kind sentient beings want to spend their lives in. South Dakota is an at will state, meaning it can fire workers whenever employers want, excluding racial or gender discrimination. South Dakota’s taxes and work rules attract businesses that see employees as expendables. This is a factor in the extended unemployment relief. People want to work, and it offers them some opportunity to look for a better job.

  18. M 2021-05-14

    Many of us over 65 will never return to our pre covid jobs or for as many hours. And yes, we do jobs that the young won’t like caregiving, cash register jobs, cleaning, stocking grocery shelves, and unloading trucks. Most all retired people I know have to work a part time job to make ends meet but are going through food lines instead because it’s not worth the $10.00 an hour to lose one’s life. None qualify for unemployment since they willingly quit due to the environmental conditions that David mentioned.

    Also, many of our older residents are moving out of state to be near their children who moved years ago to make make a living. The services they need, like a Walmart closer than 100 miles, nursing home, ambulance care, and a hospital closer than 50 miles are driving them to move as well. The number one destination is Minnesota where many of our alumni reside.

    So the young and the old are leaving to greener pastures. But wait, Kristi Noem is recruiting the next generation work force as she encourages all those people from other states to move here. But wait, once they discover that the tips to make up for the lack of minimum wage mainly come from tourists 6-7 months of the year, the winter becomes bleak. But wait, with Noem’s go out and kill anything that moves campaign, maybe we can get varmint tourists here for those off months. And from what I hear, some folks are so broke that they are making a living from Noem’s kill anything that moves program. No road kill around here for 100 mile radius.

  19. Cory Allen Heidelberger Post author | 2021-05-14

    From Marketplace on SDPB this morning:

    So far, all of the states dropping the enhanced benefits are led by Republican governors who say the federal unemployment programs, created to help people survive the pandemic, are too generous and dissuading people from going back to work.

    Dean Baker, senior economist at the Center for Economic and Policy Research, said that while that is probably true of some people, “that’s not a big factor in the economy. We’ve looked at the evidence on that, and it just doesn’t hold up.”
    The U.S. economy is still down more than 8 million jobs and, “for many people, those jobs aren’t there,” Baker said. “They’re dependent on the benefits” [Samantha Fields, “More Republican-led states opting out of federal unemployment payments,” Marketplace, 2021.05.14].

    these benefits are doing far more good than harm for Americans and for the economy. Cutting them off now needlessly punishes people in need just so if you Republicans can score political points. We should be ashamed of ourselves and of the selfish, short-sighted Republican leaders whom we have elected.

  20. Jake 2021-05-14

    Yeah, let’s hear it from Grudz about all those ‘tough jobs’ that taught you ‘life lessons’ on how to be a GOP grifter,….

  21. Arlo Blundt 2021-05-14

    Well…believe me, Mr. Grudz, I’m no poster child for tough physical labor. I went to college for a couple degrees so that I could avoid, tough physical labor. It worked out for me. I respect people who make a living with their hands and wits. They make America run but, in return, their labor is exploited, often times, and the rewards of their labor are not commensurate to their contribution.

  22. mike from iowa 2021-05-14

    Get out there and work harder, you will get more money.

    Sounds like someone grounded in 1890’s. You can tell a person who is a party wingnuj/magat.They failed to evolve over the last 100 plus years.

  23. O 2021-05-14

    My dear Grudznick, you missed the point entirely. What I learned is that my hard work is worth a fair wage. I also learned that I do not need to be exploited so someone else can make all the profit from my sweat (to talent or expertise). Far too often, Republicans/Righties/Conservatives (even those with common sense) leave that part out of the employment equation. Like others who have recalled the good old days of hard work, My job was also a union job that kept a level of fairness on who profits from labor’s work.

    Making a starvation wage to line the pockets of management/owners/stockholders has tipped the decision making calculus on this topic because the greed of management/owners/stockholders has gone entirely too far.

    Income disparity fueled by tax policy has destroyed the work-wage-value equation. That is what has perverted the system that Republicans/Righties/ Conservatives (even those with common sense) wish to lay at the feel of unemployment insurance. The Fed has focused on propping up the wealth accumulation of Wall Street; where is the Republican/Righties Conservatives’ (even those with common sense) outrage of that “big government” intrusion that perpetuates bad businesses? Where is the outrage for the corporations that took paycheck protection federal funds, then laid off workers, then increased CEO wages and investor dividends?

  24. Porter Lansing 2021-05-14

    Hear, hear Professor Newquist.

    ~ It pains me to see a state with so many brilliant and talented people still suffer from problems that are well within its capacity to solve, but SD – like other federally dependent, Republican states – is riddled by class divisions, local corruption and most devastatingly, insurmountable, political deviance.

    ~ I too grew up on hard labor. When I left the gravel pit in Watertown I was earning $3.65 hourly driving a Euclid earth hauler. Upon leaving, I was immediately employed in the Wyoming oilfield and my starting pay was $9.85 hourly. When I left that, after three years I was immediately employed in a Denver Teamster’s Union job for $15.00 hourly, in 1976. That was an five fold increase in three years over SD labor wages, with no training necessary.

    ~No need to kick SD when it’s down but it’s not growing anywhere except to become more and more stagnant.

  25. Jake 2021-05-15

    The ‘mold’ in South Dakota grows quite well, while the ‘gravy’ seems to flow towards the upper 10%.

  26. V 2021-05-17

    Another reason some people won’t return to service industry jobs is because of the way they are treated. The people leaving my small town are going to Aberdeen, Watertown, and Mitchell in search of better jobs and hopefully better treatment.

    I see a lot of men sitting around for coffee everywhere I go while women and teens wait on them. There aren’t enough workers so service is slow, the coffee is cold, and who gets blamed. Plus, they leave no tip because it’s just coffee, even though the poor server ran their buts off for these men like Grudz and several others that contribute to this site.

    There are two types of men; gentlemen or slobs and there is no in between. I feel bad for anyone who has to provide service in hotels, cafes, coffee shops etc who have to wait on slobs. Unfortunately there are more of them in S.D. than gentlemen.

  27. Cory Allen Heidelberger Post author | 2021-05-17

    The young people V sees moving to the big towns recognize what O is saying: “hard work is worth a fair wage.” We all recognize that fact when we’re doing the work, but too many South Dakotans forget that fact when they are demanding that work to be done on their behalf. South Dakota’s real problem is not unemployment benefits for the tiny fraction of South Dakotans who are between jobs. Our real problem is the desire to get by on the cheap, to not pay full freight for the labor and other resources we need to survive as a state.

  28. ABC 2021-06-12

    Uncle Joe gives unemployed workers extra money, R Governors take it away.

    We have to take away South Dakota from the Republican Insureectionists permanently.
    No bipartisanship, which is turning the ship over to the other guys before she Noem runs it into iceberg. Bipartisanship watch Titanic, it shows you where that goes.

    Democratic leaders in this state should be like Jehovahs Witnesses, everywhere! They should be saying Hey we will run the state for the next 50 years till 2072. Come on board. We re gonna win. We ll move the Capitol to Aberdeen or Wall. We ll expand voting rights. We ll create a state owned Bank. We ll restore pandemic unemployment benefits right now. We ll increase the size of the legislature. We ll put a fair low tax of 3% on wealthy incomes. We ll have many women and people of color in our Administration. We ll make it easier to vote. We ll make it impossible for legislators to by pass citizen initiatives for 2 years after Bill is voted in by people. We ll take the sales tax off food and clothing forever. We will hire no outside consultants. On our new low income tax, we will offer very generous tax credits for using solar and geothermal power.

    Why isn’t the Democratic Party saying this?

    Why isn’t any Party saying this?

    It is easier to bitch and complain than it is do something.

    We need a Party to do the above,

    Not a weak weak caving Blue Dog Party.

    We need to do the best!

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