According to recent census data, Clay County has a poverty rate of 23 percent.
For this to change, Vermillion has to diversify its industry mix, said Steve Howe, director of the Vermillion Area Chamber of Commerce & Development Company.
Being a single-industry community is not working real well for us if you look at our numbers, Howe said. Three hundred fifty (families) needing housing assistance, 22 percent in poverty, 70 percent of the workforce in organizations like Masaba (are) coming from outside. Those arent rosy numbers for Vermillion to grow.
The poverty level is not necessarily an issue resulting from Vermillions high student population, Howe said.
Thats an argument that I get often, that its because were a college town, he said. Well, it is because were a college town, but it has nothing to do with the students. It has to do with the fact that were a single-industry town.
Howe said that the poverty levels of other South Dakota cities that serve as locations for state-run institutions are either at or below the average of 14-15 percent.
If the presence of a university was the primary reason for our poverty rates to be high, that would be the case with the other state institution communities. And its not, he said. The reason ours are higher is because of the lack of industry diversity.
If youre not working at the university, for the most part youre working for the retail and service industries that ultimately serve the university, he said. Those are the career paths that pay very little. They pay in that poverty range.
The leading employers in the city are the University of South Dakota, followed by Stream Global Services and Sanford Hospital. Masaba and Polaris are big employers, as well.
However, many of these institutions employees come from out of town, Howe said.
We havent traditionally developed these (businesses) and now that we are starting to get some of those businesses, we are dependent upon outside labor in order to serve their needs, he said.
This is true for the industry-based employers, as well as the university, he said.
If you think about the kind of spouse theyre going to have, youre going to have another highly-educated spouse, he said. And Vermillion just doesnt offer that type of job opportunities for that trailing spouse. Depending on where theyre coming from, Vermillion might not be as appealing as say Sioux Falls, Sioux City or Dakota Dunes.
That makes diversification all the more important, Howe said.
We dont need any more part-time jobs for students. We just dont. So were not out there actively recruiting call centers and things of that nature, he said. What were trying to do is get some representative examples of the various industries because it provides stability in your economy. Were stable with the university because they dont have the fluctuation that other industries have. However, its consistently low.
According to Howe, the average salary for a USD employee is $35,000-$40,000.
However, he said, the mean salary is a lot less than that.
Half the people are making under $30,000, he said. The average is driven by the fact that theres some very high-earning people at the top end, and the rest are at comparable wages with the other industries in town.
Howe said there are a lot of partners who have to work together to address this issue. He said the local high school could play a role by offering more options in terms of technical education classes.
Currently, the school offers one semester of welding every other year, he said.
Its not enough to support local workforce needs, Howe said, adding that the school is interested in working with its curriculum.
Our curriculum because of our higher education focus in this community is on the college-bound student, he said. The high school has a 15 percent dropout rate, which is inexcusable to me. Were kind of leaving that other 15 percent to fend for themselves.
The dropouts arent going to be able to work at Masaba because they need a high school education. We are not leaving the significant dropout rate with any opportunity. We are not providing them with any opportunities to support the workforce needs in this community, he said.
And the college-bound will be more likely to leave because the job opportunities arent there, Howe said.
Those dropouts are hanging around here working low-paying jobs, scraping together whatever they can. The college-bound ones are leaving, and theyre not coming back. Very few are coming back because there are very few opportunities for a professional outside the university, he said.
Steps are now being taken through groups like Vermillion Now to aid the diversification process, although it is going to take a long time, Howe said.
We are doing our best, he said.