In raw dollars, South Dakota’s $8.50 an hour is the 11th-best in the nation. Nine states and D.C. guarantee a higher basic wage. No neighboring state has a higher minimum wage; Montana is closest, at $8.05, followed by Nebraska and Minnesota at $8.00.
But factor in regional price parities, the “differences in the price levels of goods and services across states and metropolitan areas” calculated by the Bureau of Economic Analysis, and South Dakota is Number One! An hour’s work at the lowest rung in South Dakota earns $9.70 in real purchasing power. That’s 3.5% more purchasing power than an hour of grunt work in second-place Oregon, where the raw minimum wage is $9.25 and real purchasing power is $9.37. South Dakota’s adjusted minimum wage is 9.7% more powerful than Nebraska’s and 18.3% higher than Minnesota’s. Boo-yah!
We can only hope that our leadership in effective minimum wage purchasing power may create some pressure to raise the rest of our wages. Looking at all occupations, our raw wages stink: we rank 48th for median hourly wage, 50th for mean hourly wage, and 50th for mean annual wage (and Capital One is still leaving Sioux Falls, due to turnover and worker shortage? seriously?). Factor in regional price parities, and our rankings in those categories don’t budge out of the 40s (42nd, 47th, and 47th, respectively).
You can view every state’s minimum wage, median hourly wage, mean hourly wage, and mean annual wage on this spreadsheet. I use the current 2015 minimum wage data posted by Chokshi, the 2013 regional purchasing power data mapped by Cole and Drenkard, and the May 2014 wage estimates posted by the Bureau of Economic Analysis for each state (for example, for South Dakota here). That’s a mishmash of years; I invite readers to find and analyze a year-unified dataset.
Let’s look at specific numbers for the septa-state region:
|State||Minimum wage||Adjusted minimum wage||1/RPP (real value of $1)|
|State||Median Hourly||Adjusted Median Hourly||Mean Hourly||Adjusted Mean Hourly|
|State||Mean Annual||Adjusted Mean Annual|
South Dakota is leading the nation on the effective minimum wage. But on the real purchasing power of wages across the spectrum, we’re lagging all of our neighbors except for Montana.