South Dakota Council Analyzes Labor Force Shifts
State economic advisors review declining workforce participation as labor market challenges mount.
Updated on Oct. 30, 2026 in Employment
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The South Dakota Governor's Council of Economic Advisors met to address ongoing economic concerns as the state's labor force participation rate fell to 66.3% in September 2026. This figure marks a decline from the 68.2% recorded in September 2025.
Why it matters
The decline in workforce participation is attributed to an aging population, with approximately one-quarter of residents over 60 years old. Additionally, federal tariff policies on imported metal and rising costs for farm inputs like diesel and fertilizer continue to impact local operations.
The state's labor force participation rate fell to 66.3% in September 2026, down from 68.2% a year prior. While the current unemployment rate sits at 2%, South Dakota currently sees three job openings for every unemployed person.
The players
South Dakota Governor's Council of Economic Advisors
This body provides economic guidance to state leadership on fiscal policy and workforce development.
The details
General fund revenue through September reached $704 million, exceeding state forecasts by $350,000. Farmers in the state face significant headwinds from drought and equipment expenses, though they remain eligible for portions of a new $8 billion federal assistance package.
Timeline
The labor force participation rate peaked at 73.4% in 2003.
Federal farm payments reached a record $45 billion in 2020.
The labor force participation rate was 68.2% in September 2025.
The labor force participation rate fell to 66.3% in September 2026.
Macro View
The current economic environment for state agriculture mirrors trends seen in 2020, when federal farm payments reached a record $45 billion. Reliance on the federal farm payments program continues to grow, with projected annual U.S. totals reaching $55 billion as states manage aging workforce demographics.
Residents may see continued shifts in local hiring as businesses struggle to fill vacancies with three openings per unemployed person. Meanwhile, farm-related retail and production costs remain sensitive to federal tariff policies on imported metal.
The takeaway
An aging demographic and shifting federal trade policies present long-term challenges to the state's traditional labor and agricultural models. Residents and business owners should prepare for continued volatility in operational costs and workforce availability.
Further reading
For additional context on the local labor market, visit South Dakota Employment.
Source note: This article includes information reported by Kotatv.
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