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Monday, March 23, 2009

Small-Town Job Loss: Putting South Dakota Faces on Recession

An eager reader points to a well-done article from Stateline.org on the recession in South Dakota. Forget all the blogospheric political posturing about socialism and GOP windbaggery: author Stephen C. Fehr focuses on what matters: our friends and neighbors losing jobs and struggling to pay the bills. Fehr spins his story around the very real impact of December layoffs at Scotchman Industries in Philip:

Today, three months later, Connie Schlim is collecting $260 a week in unemployment benefits and looking for work to replace the $12.50-an-hour job she had changing parts on a milling machine. But like many victims of this recession, Schlim says she feels trapped because there are no other jobs available nearby and no new employers coming to Philip. Other than the local hospital, Scotchman is the largest employer in Philip, with 72 people after the cutbacks. The Schlims are resigned to stay in Philip but say they will cut back on expenses.

“Our golden years won’t be as golden as we had planned on,” said Schlim, who has two grown daughters [Stephen C. Fehr, "Tracking the Recession: How Layoffs Affect One Small Town", Stateline.org, 2009.03.23].

Pick your perspective: Fehr notes that the week Scotchman laid off Schlim and 11 co-workers, major U.S. companies like Dow Chemical and Home Depot cut 80,000 jobs. But in Philip, 12 jobs equal 3% of the workforce. A loss like that in Sioux Falls would be 4,000 jobs.

Fehr also notes that Schlim's $12.50 an hour counts as a "high-wage" job. If that's full-time work 52 weeks a year, that's $26,000.

One bit of blogospheric bloviation: I heard some talk on MPR this morning about the need for more "shared sacrifice." Small-town working folks, even those still hanging on to their $12.50-an-hour jobs, are already making sacrifices. Fehr notes the remaining employees at Scotchman have offered to cut their hours to save their neighbors' jobs. The big bankers who think they have to keep paying million-dollar bonuses to retain "talent" should take notes from Philip, South Dakota.


  1. Can you imagine what 75 jobs will do for Arlington? I'm still mumbling Arlington over and over in disbelief. Lake County now has a 7.2% unemployment rate. Not good. Rather than giving $330,000 of tax credits to Randy Schaefer for his housing project that could have been used to attract a new employer. Our town needs new leadership.

  2. Just to clarify the Schaefer TIF district point posted by Anon 1:06, recognize that the city isn't actually handing out dollars, they're just shifting who receives the benefit. Typically, when a business starts up in Madison a sliding tax scale is applied (25% of total f/ yr 1, 50% for yr 2, etc.) to help the business take off. In the TIF district, these incentives will not be offered and will counter balance the funding Randy is receiving.

  3. Tony, it's interesting to learn what other tax breaks new businesses can get in Madison, but my real point about the TIF is those dollars could have gone toward a new call center building for example, rather than improvements for Randy's lots. I don't see any counterbalance. Taxes paid on the TIF first go to paying off those improvements before Madison retains revenue. There was a city commission choice for a few new spec homes. Would a new employer care we have a few spec homes in town or prefer to have $330,000 go toward a new building? We have factory jobs but our work force could easily be trained in call center work. A big step up in my opinion. I realize it's not the high tech work Madison hopes to employ, but that hasn't worked out so well either. The right call center would actually employ some tech people for networking, etc.


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