Gov. Noem touts record low unemployment; also presided over the highest

By two measures, Gov. Kristi Noem has presided over South Dakota’s lowest – and highest – unemployment rate.

One of those metrics is the number of tax forms sent in January to those who’ve received certain kinds of government assistance in the previous year. That assistance includes things like agricultural payments, taxable grants or unemployment benefits, the last of which are handled in South Dakota by the Department of Labor and Regulation.

Last year, the department sent 5,736 of the 1099G forms to South Dakota residents. That’s a 25% drop from 2018, the year before Noem became governor, when the department sent 7,608 such forms.

In 2020, the agency sent 47,314 of the forms.

The news release trumpeting the figures noted that the 2022 figure was the lowest since data collection began. 

“South Dakota’s jobs market is thriving. We are setting an example of the power of the American work ethic. The careers of the future are available right here,” the governor said in a prepared statement. “Thanks to our incredible economic strength, fewer South Dakotans than ever are having to rely on unemployment benefits to keep food on the table for their families.”

What the news release didn’t say, however, was that the 47,314 forms sent for 2020 likely represent the largest number recorded in South Dakota. Unemployment spiked to historic highs nationwide that year due to the global COVID-19 pandemic. 

Noem spokesman Ian Fury pointed to the Department of Labor and Regulation when asked for historical 1099G figures. The DLR did not immediately respond to a request for additional information, but federal statistics confirm that 2022 was South Dakota’s lowest year for unemployment claims.

Unemployment rates are typically reported as a percentage by the federal Bureau of Labor Statistics. That information dates to 1976.

South Dakota’s highest monthly unemployment rate was 8.8%, recorded in April of 2020. The previous high was 6%, logged in December of 1982 and January of 1983.

The lowest monthly rate is the current one, 2.3%, which was the rate in December when the number was last reported. Six other months in 2022 also had a rate of 2.3%.  

The current historic lows have sparked legislative action this session. Both chambers passed House Bill 1011, which lowers employer contributions to unemployment insurance by a half percentage point. Gov. Noem signed the bill on Feb. 1, calling it “an $18 million tax cut for South Dakota businesses.”

Low unemployment rates are a sign of a healthy economy, but low unemployment also creates challenges for employers.

The online retailer Amazon recently opened a 5-story fulfillment center in Sioux Falls that its general manager, Tim Choate, said is the largest building in the state by square footage.

At full capacity, the center can employ around 2,300 people, Choate said on a tour this week attended by South Dakota Congressman Dusty Johnson. 

At the moment, the center employs about 450 people. In Sioux Falls, the company has placed a host of hiring ads across various media platforms and has even sent postcards to residences in the city touting its starting salary, sign-on bonus and benefits package.

“We’re very cognizant of hiring constraints,” Choate said.

UPDATE, February 21, 2023 – after the initial publication of this story, the Department of Labor and Regulation released the number of 1099G forms mailed since 2008. Here is that data: