Friday I noted that South Dakota has the 11th-highest minimum wage in the nation, at $8.50 an hour.
Come Saturday, Minnesota will bump us back to 12th:
Minnesota will vault past Illinois, Michigan and South Dakota this week to gain the highest minimum wage in the Midwestern region at $9 an hour, which also will rank among the most-generous state wage floors in the country.
The dollar-per-hour bump taking effect Saturday for some 288,000 of Minnesota’s lowest-paid workers is the second of a three-stage increase adopted in 2014, when the state had one of the lowest minimum wages in the region. Next August, the wage will rise again to $9.50 and it will go up automatically with inflation in following years [Brian Bakst, “With Buck Bump to $9 Per Hour, Minnesota Ushers in Top State Minimum Wage in Middle America,” AP via Minneapolis Star-Tribune, 2015.07.28].
Factor in regional price parities, and South Dakota’s $8.50 still goes 5% farther than Minnesota’s $9.00. But Minnesota’s RPP-adjusted $9.23 jumps it from fourth to second in our septa-state region and from 21st to third nationwide. And a day’s work at minimum wage in Minnesota will buy more groceries than a day’s work at minimum wage in South Dakota, because the South Dakota worker will lose $3.85 of the $68 she spends on Sioux Falls groceries to state and local sales tax, while her Minnesota counterpart can buy food in Luverne tax free.
But why should Minnesota or South Dakota be mandating such handouts to workers?
Minnesota Gov. Mark Dayton, a Democrat who signed the new wage law last year, said Monday the higher wage is about “allowing people to earn a better living through their work. We’re not talking about handouts here. We’re talking about rewarding people who work with a better income, which makes them better citizens.”
…”People aren’t flying out to New York to spend this money. They’re spending it in their local economy,” Dayton said in an interview with The Associated Press. “That’s what drives our economy forward. It’s not trickle-down economics. It’s consumer spending” [Bakst, 2015.07.28].
Minnesota restaurant and hotel lobby leader Dan McElroy says Minnesota’s minimum-wage increase “has had challenges, and they’re frustrating but they’re not dire.”
Not dire, fellas. As in, not requiring Legislative meddling.