South Dakota’s minimum wage will increase 20 cents to $8.85 an hour next year. That’s the largest jump since South Dakotans approved raising the minimum wage to $8.50 an hour and implementing an automatic annual cost-of-living adjustment in the 2014 election. (On behalf of the South Dakota Democratic Party that brought you Initiated Measure 18 and helped reject the Republican effort to repeal the provision of that law applying the minimum wage to young workers, you’re welcome.)
The minimum wage hike is pegged to the Consumer Price Index (for urban consumers) as calculated by the federal Department of Labor in August. Last month, the CPI-U rose 0.4%, bringing the average for the past 12 months to 1.9%. $8.50 + $8.50*1.9% = $8.814, and statute says keep it neat and round to the nearest nickel, so voilà—$8.85.
Servers hustling for tips get half minimum, so they will see their guaranteed pay go up a dime to $4.425 an hour.
The new minimum wage takes effect on January 1.
By the way, we’re still waiting for the economic decline that Republican/corporate opponents assured us would ensue from paying the lowest-earning workers more. South Dakota’s nonfarm employment and income have grown every month since implementation of the minimum wage increase in January 2015. And echoing Democratic predictions, poverty is down in South Dakota and especially in Sioux Falls (funny that Sioux Falls boosters didn’t mention the increased minimum wage as one of the factors contributing to the reduction of poverty).
Of course, the South Dakota Retailers also predicted the CPI would push the minimum wage to $9.10 by 2018.