SD Minimum-Wagers Get Nickel Raise in 2016; Still No Sign Voters Hurt State Job Creation

The near-zero change in the Consumer Price Index, thanks largely to the collapse of energy prices, means no cost-of-living increase in Social Security checks in 2016.

The 0.2% CPI increase also means South Dakota’s minimum wage will increase by just a nickel in 2016, to $8.55 an hour. Applying CPI straight to the current $8.50 minimum wage would produce a mere 1.7-cent upward adjustment; however, the minimum wage initiative that South Dakota voters approved last year included a provision that rounds the minimum wage increase up to the nearest five cents.

This low increase deals Senator David Novstrup (R-3/Aberdeen) another blow as he gears up to defend the minimum wage reduction that he proposed for young workers last winter and which thousands of cranky voters put on hold and referred to a vote in 2016. Had the hyperinflation that Ron Paul and gold-bugs have been predicting for years materialized, South Dakota’s minimum-wage workers could have received an 85-cent raise, and Senator Novstrup’s business pals would have been squealing. They’ll still squeal, but they have just a nickel extra of squealing to do heading into the 2016 election cycle, compared to the $1.25 increase that prompted Senator Novstrup and fellow Republicans to try thwarting the voters’ will this year.

Is that $1.25 increase in the minimum wage having any impact on South Dakota’s economy? Let’s update some jobs figures that we last reviewed in July:

Year Month chg: labor force chg: jobs chg: unemp
2014 Jan 300 505 -207
2014 Feb 265 425 -158
2014 Mar 250 370 -120
2014 Apr 235 340 -105
2014 May 250 390 -140
2014 Jun 260 435 -175
2014 Jul 210 370 -160
2014 Aug 155 245 -90
2014 Sep 85 90 -5
2014 Oct 25 -35 60
2014 Nov -20 -105 85
2014 Dec -40 -150 110
2015 Jan 475 360 115
2015 Feb 1055 840 215
2015 Mar 1325 685 640
2015 Apr 1355 940 415
2015 May 1705 905 800
2015 Jun 970 820 150
2015 Jul 335 435 -100
2015 Aug -440 180 -620
  • Average monthly change in workforce in 2014: 165.
  • Average monthly change in workforce in 2015: 848.
  • Average monthly change in jobs in 2014: 240.
  • Average monthly change in jobs in 2015: 646.
  • Total net job gain in 2014: 2,880.
  • Total net job gain in 2015: 5,165.

Every month of South Dakota’s $8.50 minimum wage has seen net job gain. Six of eight months in 2015 have seen higher job gains than the same month in 2014 (January and August are the exceptions). Unemployment is up a couple ticks from last year, but only because the number of new entrants in the workforce has grown even faster than the number of new jobs.

Many factors affect workforce participation and job creation, but the 17.2% increase we voters gave minimum-wage workers this year appears not to have stopped South Dakota from creating jobs at a monthly rate 2.7 times greater so far this year than last. The upcoming 0.6% nickel raise, for the kids Senator Novstrup wanted to screw as well as everyone else at minimum, will have even less economic and political potency.


2 Responses to SD Minimum-Wagers Get Nickel Raise in 2016; Still No Sign Voters Hurt State Job Creation

  1. Cory,

    “Lynn? Would you endorse John Thune or David Novstrup over me? ”

    Are you announcing your run for John Thune or David Novstrup’s seat? Which one and when?

  2. larry kurtz

    Little wonder migrant labor fills the gaps in South Dakota’s workforce even as SDGOP defies immigration. Red state collapse on parade.