In this arid, windswept city on the western plains, where the best jobs in town used to be found at the local hog-slaughtering plant, America's boom time is underscored by a 1.4 percent unemployment rate and a fundamental shift in the balance of power between employers and employees, with the employees definitely on top.
Many companies, desperate to retain the workers they have, not to mention attracting more, are raising wages sharply -- up 25 percent in the past two years -- sweetening their health insurance plans and raiding other firms' payrolls.
Traditional wage earners -- people who answer phones, repair motors, or process loans and insurance paperwork -- are being offered the kinds of perks that once went only to top management or high-tech whizzes, such as stock options, bonus incentives, child care assistance and even free company cars.
"This is worker's paradise," said Chuck Ostrowski, chairman and chief executive of Specialized Card Services Inc., a credit card company here.
Sioux Falls is an example, albeit somewhat more extreme, of what good times feel like in a national economy with increasingly low unemployment. Nationwide, unemployment dipped in May to 4.2 percent, as low as it has been in three decades, according to figures released yesterday.
People here can shift jobs with relative ease, to make more money, get better benefits or just because they feel like it. Jess Kuehl, 20, for example, quit her position at a local Target store because, among other things, she didn't like being limited to wearing Target's red uniform. So she went to work as a waitress at Applebee's restaurant, where employees are allowed to pick the color of the shirts they wear, she said approvingly, and where the managers work hard to make life enjoyable for workers.
"The managers are cool and a lot of cool people come in to eat and you can talk to them too," Kuehl said. With frequent staff parties, company-sponsored sports teams and a generally jovial atmosphere, "they make it fun," she said.
Making a Quick Switch
"Cool" is not what the executives and managers of Sioux Falls think of this turning of the tables. "People come to work for two days and they're gone," said Jim Wheeler, president of Wheeler Manufacturing Inc., which makes pressurized steel storage tanks. He said he could double the size of his business if only he could find the additional 20 skilled, dependable welders he would need to expand.
Because of that and the city's remoteness, national trends are concentrated and exaggerated. While the number of people in the Sioux Falls area has climbed 18 percent in the past decade, to 165,000 from 140,000, job growth has risen at twice that clip, with non-farm employment rising to 108,800 jobs, from 79,300 in 1990, the Sioux Falls Planning Department said.
Sioux Falls business groups have joined forces to create an organization to attract workers from outside the area, an effort reminiscent of pioneer days when promoters recruited people to move west. They have also shooed away employers who consider moving to Sioux Falls but who want to pay anything close to the federal minimum wage of $5.25.
Dan Scott, president of the Sioux Falls Development Foundation, which promotes business opportunities in the area, recalled with a grimace a manufacturing firm that hoped to move to the city and pay workers $6 an hour. "We told him he wouldn't be able to hire people at that rate," he said.
Wages are definitely on the rise in Sioux Falls. In March, Specialized Card Services unexpectedly announced a 10 percent pay increase for all its workers because a salary survey had indicated that some workers were being paid slightly below the average for the area. The raises, the company told its workers in a memo, would occur in addition to regular raises related to performance.
Bell Paper Box, a local printing firm, earlier this year bumped up its starting entry-level wage to $8 an hour from $6.50, a 23 percent increase, and workers can expect another increase of 5 percent to 10 percent later this year, depending on their performance and how well their work group is doing. At area credit card companies, local executives say, wages are up 25 percent in the past two years.
Last year LodgeNet Entertainment Corp., which designs and installs in-room entertainment and information systems for hotels and resorts, gave its customer-service workers raises of 10 percent to 15 percent after realizing it was losing good employees to firms willing to pay more.
"It's costly for the company, but if you want to hang on to people, you need to pay them," said Scott Petersen, LodgeNet's president and chief executive.
At some companies, the increases are coming several times a year now. At Norwest Banks, which has 1,100 employees in the Sioux Falls area, the company now conducts local salary surveys three times a year to be competitive.
"You need to start people at a higher wage than in the past and be more aggressive on salary reviews, which usually means increases," said Lon D. Clemensen, a Norwest senior vice president of human resources.
Job security is on the rise as well, with many companies loath to lose a single worker. "They don't fire people anymore," said Marvelyn Gilbertson, a waitress at the Falling Water Grille. "They just give them three, four, five warnings now."
Right Place, Right Time
For individual workers, the tight job market is opening up new opportunities as employers take risks on employing those who previously lived on the fringes of the economy.
Barbara Jorgensen, 29, a Lakota Sioux from the Red Bear clan who grew up on the Cheyenne River reservation, is a good example. Five years ago she was cleaning motel rooms part time for minimum wage, then $4.25 an hour, living in a one-bedroom apartment with her two children and relying on a community food bank to help feed them.
In 1994 she landed an entry-level job at Bell Paper Box, earning $6.65 an hour. Then she heard about a vacancy for a printing-machine operator. "I thought of the money right away," Jorgensen said with a laugh. "I thought, `This would be jammin' if I got this.' "
Bell Paper Box managers decided to take a risk that Jorgensen, an unskilled worker, could be trained to operate an expensive printing press. The gamble has paid off and she has tripled her salary to more than $18 an hour, which has allowed her to buy a comfortable three-bedroom mobile home and the Harley-Davidson motorcycle she had always dreamed of.
Workers higher up on the economic ladder, such as Specialized Card Services' Ostrowski, have seen their fortunes soar as well. In 1995 he was 45 and a mid-level manager at Citibank in Sioux Falls, working as controller of the branch's domestic credit card operations. After 13 years with the firm, he had decided that job security had become a chimera in the corporate world -- and perhaps had always been overrated. So he took a job as president of a new bank that was offering a new high-interest-rate credit card to potentially risky borrowers. "I saw the potential for a significant financial reward in this endeavor," he recalled.
Ostrowski declines to specify his income now but says that his compensation has increased fivefold. He and his family have moved from their four-bedroom, 2,500-square-foot house to an 8,000-square-foot one, and they have bought an adjacent lot just to protect the view overlooking a golf course. "The economic side of it is beyond anything I ever would have imagined," said Ostrowski, the son of a self-employed washing-machine repairman.
From Pork to Perks
Such success stories represent a big change for Sioux Falls. For decades the biggest employer in town had been John Morrell & Co., a subsidiary of Virginia-based Smithfield Foods, which operates a 100-year-old pork plant across the street from the nation's largest surviving stockyard. Young people wrangled for openings at the plant, where the work was hard but solid union wages offered a ticket to the middle class. Now the plant is the largest local employer of recent immigrants to the United States, who earn an average of about $10.50 an hour.
In the early 1980s, changes in banking laws enabled Citibank and several other large firms to open credit card service centers in Sioux Falls, where they took advantage of a plentiful supply of workers, paying them near-minimum wages to answer customer telephone calls. Insurance back-shop operations proliferated as well.
More recently, a bevy of high-tech firms, including computer manufacturer Gateway 2000 Inc., computer-component maker Hutchinson Technology Inc. and LodgeNet have set up sprawling operations on the outskirts of town.
These companies also launched themselves by siphoning workers from other local companies. But now companies find themselves bidding against each other.
CCC Information Services Inc., a Chicago insurance claims-processing firm, came to town with an aggressive strategy for hiring several hundred workers: offering wages above the going rate and presenting itself as the most family-friendly firm in town.
CCC Information found the standard pay for insurance claims processors was $8 an hour, so it offered $9 to start, with experienced workers getting up to $15 an hour. It ended up with 3,300 applicants, most of them employed at the more traditional firms in town that were paying lower salaries.
"You're unfortunately going to have to steal, or end up taking, employees from other companies," said Terence J. Ronan, CCC Information vice president.
`Feeders' Fight Back
For old, established companies, it's been disturbing. Citibank officials acknowledge that their company had become a "feeder," the local label for companies that lag in employee compensation, and find their workers jumping ship for better offers. So Citibank officials are fighting back with better pay, stock options for even entry-level employees after one year with the firm and a focus on quality-of-life issues.
In the past two years Citibank spent $7 million expanding its child care center so that no employee would ever face a waiting list. Another expansion is underway, and the company plans to soon offer an all-day kindergarten on site as well.
Officials say the center has reduced employee turnover among parents who have children at the center to less than 10 percent, or about half the rate of other employees.
"We have to do as good or better than our neighbors," said Jim Coyne, human resources director for Citibank South Dakota, which employs more than 3,000 people in Sioux Falls.
Health insurance is the magic pill at other companies. Specialized Card Services pays at the top of the wage scale, but it also offers what it contends is the best health insurance package in town. The firm has grown to 700 employees, from 200 in early 1998.
The word is spreading of the good life to be had in Sioux Falls. Regina Hubbard, 26, was living in Chugiak, Alaska, when she decided a year ago to move to Sioux Falls. She had heard the economy was good, the job market was great and that the community was child-friendly, which appealed to her as a mother of three. She was quickly hired as manager of a video store, where she is earning $26,000 a year and hopes to become a regional manager, partially because the company gives regional managers a new Dodge truck.
"I don't think I'll have a problem getting where I want to go," Hubbard said. "I can go as far as I want to with that company."
CAPTION: Chuck Ostrowski, outside his Sioux Falls house, is a former mid-level bank manager who went on to head a credit card company. "This is worker's paradise," he says.
CAPTION: Barbara Jorgensen left a job cleaning motel rooms to run a printing press.