Wage Change Insights (14)
Between 2000 and 2019, South Carolina saw growth in the manufacturing sector and slow growth in its average hourly wage while South Dakota was facing a wage gap and had mainly low-paying jobs. During the same period, Tennessee saw fast-growing occupations contributing to its average hourly wage as well as growth in the manufacturing sector.
Growth in the manufacturing sector
- Between 2003 and 2015, there was a steady increase in the average hourly wage in South Dakota, moving from $14.98 in 2003 to $18.23 in 2010 and $19.97 in 2016.
- There were increased job opportunities in South Carolina since 2011, due to growth in the manufacturing sector. Between 2011 and 2015, there was recruitment for 28,000 manufacturing jobs which out-numbered those in Georgia and North Carolina.
- There was a 12.7% increase in factory jobs between 2010 and 2015 which amounted to over 231,000 jobs. This also contributed to the change in the state's average hourly rate because during this time, the rate increased from $18.23 in 2010 to $19.51 in 2015.
Slow growth in average hourly wage
- South Carolina was considered as the state that was "leading the manufacturing renaissance" as it became the top state that was exporting tires as well as passenger vehicles. Despite this however, the Bureau of Labor Statistics reported that South Carolina's average hourly rate in the manufacturing sector was $18.76 in January 2015, while there were 30 other states paying a higher rate.
- Average hourly wages remained low during this period, especially in the manufacturing sector, because companies were also recruited to the state on the basis that the state offers a rate that is lower than the national average.
- Another sector that sees slow growth in average hourly rate is education, when compared with other states. A proposal was recently made to have a 7% increase in their average pay for public school teachers which "would push the state above the Southeastern average for the first time in seven years".
- The average salary would increase from approximately $52,917 to $56,621 (i.e. about $27.56 — $29.49 average hourly wage) and would require $211 million from the state to make it happen. The reason for this proposal is to ensure that teachers are adequately compensated.
- The minimum wage for South Carolina is $7.25 per hour and was last increased by $0.70 in 2008 (i.e. $6.55 to $7.25) because of Consumer Price Index, causing the rate to increase along with inflation.
- In 2000, South Dakota's average annual pay had a 29% wage gap/difference when compared with the U.S. average as a result of "lack of urban density", level of education, low tax burden and low unionization rates. This was found in a study that was conducted by Ralph Brown, who was a professor of economics at the University of South Dakota.
- In 2010, employees in the private industry earned $16.53 per hour. The Department of Labor found that South Dakota's average hourly wage was the lowest in the U.S.
- The rate reported then was considered unmoved for decades even though there were "state initiatives, studies and investment" implemented to improve it.
- Between 2013 and 2014, there was a 5.4% wage growth, there was a 3.6% increase in 2015 – 2016 and a 2.8% increase between 2016 and 2017.
- In 2017, the median hourly rate was $15.55 in South Dakota, compared with $18.12 for the U.S. The state however, saw a steady increase in the median hourly wage, but the growth was slowing.
Mainly low-paying jobs
- In 2019, growth in South Dakota's average hourly wage was being hampered by the state's rural nature, limited manufacturing employers, and lack of highly educated workers. The state is also not very attractive to high-tech employers and workers aren't able to demand higher pay because of low union membership.
- The state has a lot of available jobs that are low-paying and are unfortunately, the types of jobs that dominate the state. These include "office support, food service and sales"; this causes brain drain because those who are highly educated/qualified migrate to other states for better paying jobs.
- There has been little to no improvement in attracting new employers or pay for workers, "over the past few decades". South Dakota had the lowest average hourly wage in 2008 and since then, it has only managed to move up by two spots.
- The minimum wage for South Dakota is $9.30 per hour and was last increased by $2.75 in 2008 (i.e. $6.55 to $9.30) because of Consumer Price Index, causing the rate to increase along with inflation.
- In 2016, all occupations in Tennessee saw an increase of $0.30 per hour, raising the average hourly wage from $19.55 to $19.85.
- This was influenced by the fast growing occupations, healthcare practitioners as well as technical occupations, that pay $31.75 as the average hourly wage.
Growth in the manufacturing sector
- Between 2017 and 2019, the manufacturing and construction industries saw positive growth with the latter contributing at least 4,000 jobs.
- The state also saw a record high in employment of 3.1 million people and growth in the average hourly wage in manufacturing by $0.32 between 2018 and 2019, amounting to $20.18. This was still 7.4% below the average factory wage in the U.S. ($22.03/hr).
- For 2019, it was anticipated that the manufacturing industry would "be the fourth largest employment sector in Tennessee, comprising 352,610 jobs" and earning $1,084 as average weekly wages.
- The minimum wage for Tennessee is $7.25 per hour and was last increased by $1.67 in 2008 (i.e. $5.58 to $7.25) because of Consumer Price Index, causing the rate to increase along with inflation.
To provide insights into the reasons for changes in average wages between 2000 and 2019 in South Carolina, South Dakota and Tennessee, we leveraged government databases (e.g. Tennessee Department of Labor & Workforce Development). However, we found general information about the minimum wage for the states and some information relating to the average hourly wage.
We also looked for reports of increases or decreases in the average hourly wage for each state using respective state news publications (e.g. South Dakota News Watch) but while we found information about the changes in average wages statewide, for Tennessee and South Carolina, we mostly found information highlighting specific industries such as manufacturing and education. We also looked at other news publications (e.g. Capital Journal and Argus Leader) that reference government press releases or data and/or studies conducted by experts in the area of economics that also looked at the historical changes in average wages. While we found additional information, it remained that more information about some sectors was available rather than across all occupations for South Carolina and Tennessee. We were able to identify and synthesize insights that point to reasons for the changes in average wages between 2000 and 2019, using these highlights and group them with appropriate themes.