Wait a minute: Monday I reported that South Dakota is led the region for job growth in May. Wasn’t raising the minimum wage supposed to kill jobs?
The South Dakota Department of Labor doesn’t have the May job numbers online yet. But consider what has happened to our workforce numbers since the voters raised South Dakota’s minimum wage from $7.25 to $8.50 and hour, effective January 1, 2015:
Now if you look at the far right column (and that is where the Far Right will look, right, Right?), you go, “Oh my gosh! Unemployment started rising in January 2015! It was higher now than at any time last year! And that Sioux Falls paper said it was 3.8% in May! The minimum wage raises unemployment!”
But look at the workforce and jobs columns. South Dakota’s unemployment rate is up in 2015 primarily because people have entered the workforce at a faster rate than job creation, but both figures are at all-time highs, and both have increased this year under the $8.50 minimum wage at relatively torrid paces:
- Average monthly change in workforce in 2014: 165.
- Average monthly change in workforce in 2015: 1,066.
- Average monthly change in jobs in 2014: 240.
- Average monthly change in jobs in 2015: 719.
South Dakota has created nearly as many jobs in the last four months (2,875) as it did in all of 2014 (2,880). Unemployment is up because the 4,265 people jumped into the labor pool in those four months, compared to 1,975 total new job seekers in all of 2014.
Lots of other economic factors could be motivating faster job creation and workforce expansion beyond the minimum wage. But South Dakota’s new voter-approved $8.50-per-hour minimum wage clearly has not deterred hiring or job-seeking during 2015 compared to rates in the preceding year. We could even speculate that the higher minimum wage may have motivated more people to join the labor force and seek work.