Measuring Unemployment in South Dakota

Jul 24, 2019

Credit South Dakota Department of Labor & Regulation

The unemployment rate is the most common number measurement of a healthy job market, and employers also use it to determine the number of available workers.  But officials at the South Dakota Department of Labor say that number does not tell the whole story.

Marcia Hultman is the Cabinet Secretary for the South Dakota Department of Labor and Regulation.  She says unemployment involves more than one number, and there is a big misconception about what the unemployment rate measures.

Hultman says the unemployment rate only measures the number of people actively searching for work over a period of four weeks who are not currently employed.

“That really narrows the definition and does not, maybe, include individuals that have become discouraged or just been out of the job market for long periods of time. Or maybe have, for a variety of reasons, never been in the job market,” says Hultman.

Hultman says the unemployment rate is a useful tool for employers to see who is active and ready to work today, but it doesn’t address all employment needs. She says the ratio of job seekers to open positions makes it hard for employers to fill some positions, especially skilled positions.

“Just this week we’ve had over 19,000 jobs advertised in our ‘South Dakota Works’ – which is actually the largest databank, in the state, of job openings, and that’s maintained by the Department of Labor – but the number of unemployed is about 13,000,” says Hultman.

Hultman says there is an effort to reach out to people who are not engaged in the labor market, as well as those who are underemployed, but that number is harder to track.

She says the Department of Labor offers services to help individuals retrain or learn how to market themselves to potential employers. She says a big part of the problem occurs as job descriptions change and people don’t know how their current skill set applies to new positions.

Hultman says wages have been a big part of the conversation, and South Dakota has seen an overall increase in pay. She says employers who list wages on a job posting see more success attracting applicants.  She adds despite this most employers are hesitant to do so, and only around 15 percent of postings have a wage listed.