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One-Party Rule Leads to Low Wages and Brain Drain

Senator Reynold Nesiba (D-15/Sioux Falls) gets a keen example of how South Dakota loses talent due to low wages from his economics classroom at Augustana:

“I had a student that was graduating from Augustana that I was visiting with a few weeks ago,” he says. “She was graduating with a nursing degree from Augustana and she said she was taking a job in Minnesota.”

Nesiba says he asked the student if she had look[ed] at jobs in South Dakota.

“She looked me right in the face and she laughed,” he says. “She said ‘you know in Minnesota the average pay for nurses is $37/hour. In South Dakota it’s $27/hour.’ There’s a gap of $10/hour. That’s $20,000 per year — it didn’t take her very long to realize that the environment in Minnesota was far more supportive of nurses” [Jacob Newton, “Exporting Our Workforce: Brain Drain in South Dakota,” KELO-TV, 2021.07.15].

One doesn’t need an advanced economics lecture from Professor Nesiba to figure out that making $20K more in Minnesota makes that nursing student’s move a no-brainer. Even if you plug those nursing salaries into the state’s “Real Wage Calculator” and accept the state’s assumptions about taxes and cost of living, that new nursing grad still comes out with 11% more purchasing power in Minnesota than in South Dakota.

Senator Nesiba agrees with this blog’s assessment that low wages and high brain drain result from the chronic failure of South Dakota’s one-party regime to take economic development seriously:

“What we’ve been trying for 40-years is to be a low-tax, low-regulation, low-government intervention state, and what it’s yielded us is a low-wage economy with few union jobs and our young people are leaving to take and pursue opportunities somewhere else.”

“I would say that 40-years of supermajority Republican policy has failed working people in South Dakota,” says Nesiba. “We haven’t seen a Fortune 500 company relocate here other than having CitiBank and Wells Fargo having a presence. If this strategy was so great at being able to attract outside firms, we’d see a lot stronger job growth and we’d be seeing higher wages” [Newton, 2021.07.15].

That lazy, anti-worker attitude that’s sending Professor Nesiba’s nursing student and numerous other talented young people to Minnesota to make the fortunes is the same fundamental failure of vision and governance that has depleted our Corrections staff to the point that they have to work mandatory overtime. Maybe the people we need to fire aren’t the wardens of the Penitentiary but the wardens in the Capitol whose political laziness and ideology have denied local opportunities to all of us inmates of South Dakota’s stagnant economy.

26 Comments

  1. DaveFN 2021-07-16

    What an ass-backward State SD continues to be.

  2. John 2021-07-16

    Great analyses. The numbers miss is the far higher standard of living, and thus happiness, in urban-ish Minnesota than anything comparable in South Dakota.

    President Lincoln noted that labor is superior to capital. South Dakota’s economic development has that backward.

    South Dakota continues exporting its greatest asset, while importing unproductive, grumpy boomers. South Dakota remains and secures its future as a place for youth to earn a credential (professional or trade) – then rush to an urban-anchored area to earn a life.

  3. Nix 2021-07-16

    Why in the hell would any brilliant minority young man or woman want to come let alone stay in a state that has a
    Governor and State legislators that really do not want them here.
    “Call me when you are an American “
    is just one example of the warm welcome
    they can expect.
    While The Dope Queen and her ilk pray to the Golden Donald Trump statue, I wonder…..
    Who’s land do they think they are standing on ?
    They conveniently forgot about the Ft. Laramie Treaty.
    Dopes, one and all.
    Welcome to South Dakota.

  4. Jenny 2021-07-16

    CNPs (Certified Nurse Practitioners) start at a $110,000 salary at Mayo Clinic with 2% cost of living raises every year.
    Wages in the medical field rank among the highest in the nation.here in MN.
    Republicans never never never talk about low wages because they don’t care.

    Vote for Democrats next time you vote, low wage South Dakotans They care about the low wage problem and will fight for you.

  5. Jake 2021-07-16

    The Republican GOP party exists to bolster the upper 25% of wealth earners at the expense of the bottom 75%. They do this with the ability to “con” the lower % into believing that they are being well-served by the party. Along come Democrats, and the GOP calls them “socialist” out of one side of their mouths while the other side of their mouths is advocating more tax-cuts and wealth to the rich…..

  6. Bill Kennedy 2021-07-16

    I am waiting for someone to post about how much cheaper it is to live in South Dakota. Please entertain us with the old song and dance.

  7. jerry 2021-07-16

    NOem’s South Dakota was settled on stolen land by people who were on their last legs of the economic ladder, As Gene Wilder so brilliantly said in Blazing Saddles ”
    “You’ve got to remember that these are just simple farmers. These are people of the land. The common clay of the new West. You know… morons.”

  8. cibvet 2021-07-16

    If anyone thinks the “brain drain” is a manufactured political hypothesis, all one has to kook at is what we are left with for governor and legislators, state and national.

  9. John Kennedy Claussen, Sr., 2021-07-16

    Wages are definitely the number one issue in this state and have been for sometime. But what has the South Dakota Democratic Party really done about this, or tried to do about it? Well, in 2018 they nominated a Republican for lieutenant governor, who was the past president of the SF Downtown Rotary Club. Then in 2018, they ran a candidate for the US Senate who constantly took pride in his relationship with his local Chamber. Only when Democrats start to run candidates who represent and care about the workers will the SDDP begin to be effective in dealing with the wage issue in this state. It’s not the duty of the SDDP to rub elbows with the business community, rather it is the duty of SDDP to respectfully and civilly sit across the table from such business leaders, in order, to press the justified needs of South Dakota workers.

  10. Porter Lansing 2021-07-16

    Enough said.

    Kicking SD, when it’s down, helps nobody.

    Because, the nobody’s that love it there have a strong case of German stubborn.

    Right, Edwin? #grins

  11. Bob Newland 2021-07-16

    Cibvet nailed it.

  12. Bob Newland 2021-07-16

    Bill Kennedy, it’s cheaper to buy weed on the street here than it is to buy it in a legal store in Denver. So there.

  13. buckobear 2021-07-16

    Ah yes. Our taxes ae low, butwe don’t get much for ‘em.

  14. Arlo Blundt 2021-07-16

    Well..45 years of Republicans in power has failed the young, has failed the oldest of us, in nursing homes, has failed the small town merchant and the working man in every community.There are very few of us who have not been misserved, unserved, or just out and out neglected by government at the State level. All in the name of a frugal tax policy.

  15. Porter Lansing 2021-07-17

    John Dale. Don’t forget why you left Tucson. SD will turn out the same because the problem is you not those around you.

  16. Cory Allen Heidelberger Post author | 2021-07-17

    “Kicking SD when it’s down helps nobody”? Does that preclude any South Dakota Democrats from speaking up as Senator Nesiba does about this state’s chronic problems and proposing solutions to those problems?

  17. Cory Allen Heidelberger Post author | 2021-07-17

    John makes a fair point: one-party rule depends on not having a dedicated opposition party.

  18. grudznick 2021-07-17

    You don’t need those advanced economic pants, Mr. Nesiba, to do the maths around $10/hour and how much better life is here in the Great State of South Dakota.

  19. Edwin Arndt 2021-07-17

    Yes Porter, those stubborn germans have resolutely resolved to persist
    in their tenacity and determination to persevere. There are some that
    consider that those are noble qualities.
    Actually, quite a few of those morons living in South Dakota don’t even know
    that South Dakota is down. They just go about their business, doing their
    work and living their lives. Ah, the blessings and serenity of ignorance.
    Betcha didn’t think I was reading this morning, huh, Porter? (Smile)

  20. M 2021-07-17

    There is such a disconnection between what people earn in small town S.D. People are perfectly happy to see a young kid mow lawns for the city for $15.00 or more per hour and complain when a homecare worker gets $10.00. In S.D. the lawn is more important than helping the elderly and disabled. Of course, it’s women’s work and that’sa big part of the problem.

  21. Arlo Blundt 2021-07-17

    M–you’re absolutely correct…the exploitation of working women has enabled South Dakota to eke by.

  22. Cory Allen Heidelberger Post author | 2021-07-18

    Even though John at the top says Nesiba and this post offer great analysis, he reminds me with his comment about quality of life that our analysis, like most analyses wrought in these discussions of where people can afford to live, perhaps does not say enough about the quality of living versus the cost of living.

    South Dakota state government’s Real Wage Calculator looks solely at the cost of living: how much one pays in taxes to sustain one’s civil society and how much one pays for the basics of living. The latter metric, cost of living, and the resulting calculated purchasing power, does serve as a proxy for quality of living, though one still rooted in narrow capitalist/materialist thinking: the more you can purchase, the better off you are. In general, that thinking isn’t wrong: more purchasing power means more financial security, more cushion against emergencies, more ability to save for a comfortable retirement.

    Now Nesiba’s nursing grad is already coming out ahead in Minnesota on raw purchasing power. But even for those rare jobs where the SD/MN pay gap isn’t so large and the Real Wage Calculator might show that the worker would come out with more technical purchasing power in South Dakota, raw purchasing power doesn’t take into account what all a community/state has available for that worker to purchase. Online shopping smooths out some of the differences: a nurse can buy the same cool shoes and stream the same French films on Amazon whether she lives in Sioux Falls, Stickney, or St. Paul. But if she lives in Stickney, she can’t ride her bike on the paved, shady trail to the shoe store and try on those shoes. Even if she lives in Sioux Falls, she doesn’t have as many opportunities to see plays and concerts instead of films. Purchasing power doesn’t mean much if there’s not as much to purchase.

    The tax portion of that calculation is even more myopic to quality of living. When South Dakota markets itself with the Real Wage Calculator, it looks at taxes purely from a cost perspective and assumes that the more you pay in taxes, the worse off you are. But often you get what you pay for. Minnesota collects more taxes and provides better public services. They can pay their public servants more, which means on balance they attract more talent and provide better public service. Minnesota relies less on federal subsidies to keep government running, so deep down, Minnesotans feel more independent and are not subject to the same stress and resentment that South Dakota conservatives must feel when they ape their Fox News slogans while knowing they can’t survive without Uncle Sam’s handouts.

    South Dakota’s Real Wage Calculator puts out numbers that make Minnesota look good for Nesiba’s nursing grad and many other workers. But even where that marketing tool produces figures that suggest certain workers have more purchasing power in SD than in MN, those workers don’t live on a spreadsheet. They live in real towns and cities where they make real choices every day, where they go to stores, drive on roads, relax in parks, enjoy public services, and make complicated heuristic assessments of their quality of life. They may not even be aware of the numbers in either direction; they just know where they feel they can most easily access a choice of groceries from a variety of vendors and where they have the most opportunities to move up in their career and sell their house and enjoy their lives. And as Nesiba notes, more often than not, that sense people get breaks against South Dakota: our lack of opportunity leads to good people leaving without a commensurate flow of new people coming, and that imbalance in talent flow leads to an ongoing comparative lack of opportunity.

  23. ABC 2021-07-18

    So wages are $10 an hour higher in Minnesota than South Dakota, for nurses and also for highway workers.

    So what do we do?

    Bitch and complain OR do something?

    Do something! Yes it’s controversial.

    Create jobs yourselves. Pay higher wages.

  24. Richard Schriever 2021-07-18

    A great example of the quality life vs. cost of life issue is what just happened to me. We have a new young co-worker on our crew from a smallish town in MN. We are currently in Lemmon, SD working on a road. He made a comment about the “little grocery store” here. FYI, Lemmon has a nearly new IGA store that I have found to be very well stocked – even has some things I have a difficult time finding in Sioux Falls – a nice deli – and seems pretty good sized to me considering Lemmon’s population of barely more to 1200. Still, the perception is it is a small – limited in value – grocery to someone unfamiliar with SD in general.

  25. mike from iowa 2021-10-23

    http://www.sheilakennedy.net/ Ms Kennedy tells the story of a Florida man who applied for jobs all over Florida because he was hearing of the dearth of workers and finds out those seeking workers want slaves and offer putrid wages.

    Good read from a very good writer, lawyer, professor, etc. Talking points to use against Grudzilla and his magat ilk that blame workers for being lazy.

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