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.