A recent governor's task force reported that South Dakota workers had the lowest average wages of any state in the country at $21,645, almost $9,000 below the national average. The study cited a lack of advanced educationthe result not of poor education but of "education flight" upon graduation-low union membership and lack of large firms as a few of the reasons for low wages.
The good news is that the state's low tax burden lets workers keep a larger portion of their income, giving them as much buying power as those making higher wages in higher-tax states, the report said.
The report also cited the state's relative lack of metropolitan areas, which typically offer higher wages across the board. A recent analysis by the Sioux Falls Argus Leader showed that Sioux Falls wages in the state's top 10 fastest growing jobs paid wages comparable to the same jobs in Minneapolis. A tight labor market and weather (seen as a deterrent to labor migration) are two factors believed to be exerting upward pressure on wages.