Black Hills Knowledge Netowork

The value of work output in Rapid City lags the state and other cities in our region.
The value of work output in Rapid City lags the state and other cities in our region.
Graph by Kathryn Birkeland
February 2, 2015

Economist: Worker Output In Rapid City Area Lags State, Region

Rapid City has a tight labor market -- a low unemployment rate and lots of people working -- so economist Kathryn Birkeland wondered why the city's median household income also is low compared to the state as a whole. 

"There's lots of people working; there's lots of production going on. So why is income so low?" Birkeland asked at the annual meeting of the Rapid City Economic Development Partnership held Feb. 2, 2015.

The assistant professor of economics at the University of South Dakota found her answer by measuring the value of the output of Rapid City workers. In 2013, the average output per worker in Rapid City, stagnant since 2011, was just above $85,000, compared to about $95,000 for the state as a whole, nearly $125,000 for Sioux Falls and more than $110,000 for Cheyenne, Wyo. (Find more data about output per capita on the South Dakota Dashboard.)

Rapid City's relatively low worker output helps explain the city's similarly situated median household income of $44,960 compared to South Dakota's $48,947. Although the median household income for the city of Rapid City is up slightly from $44,626 in 2012, in the entire Rapid City metro area, which encompasses Pennington, Meade and Custer counties, incomes fell 4.9 percent in inflation-adjusted dollars. (See data on the Rapid City and Sioux Falls metro areas in sortable charts with numerous data set breakdowns and exportable data and charts on the Median Income page of the South Dakota Dashboard.)

 

Kathryn Birkeland speaks Rapid City Economic Development 02 02 15

Kathryn Birkeland, assistant professor of economics at USD, discussed the Black Hills area economy at the annual meeting of the Rapid City Economic Development Partnership on Feb. 2, 2015.

Birkeland hihglighted several other 2013 data points for Rapid City, the most recent year for which data is available. 

  • Gross Domestic Product growth rate -- 1 percent. 
  • Labor-force participation rate -- 65 percent 
  • Employment-to-population ratio -- 61.32 percent
  • Unemployment -- 3.2 percent (compared to 3.7 percent for South Dakota)
  • Average change in Gross Domestic Product, 2009-2013 -- 1.9 percent (compared to 5.4 percent in Bismarck, 2.6 percent in Sioux Falls and -0.1 percent in Cheyenne, Wyo.) 

Birkeland said that while Rapid City's unemployment rate is low, it has not returned to extremely low pre-recession levels. 

"It was not sustainable, what was happening in 2007 and 2008. We were in a boom," she said. 

See Birkeland's presentation slides in the file attached at the bottom of this post. The presentation includes all slides from the meeting. Birkeland's slides are Nos. 53-70. 

 

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