...less purchasing power for everyone.
It's another crowded day on my browser: time to clear those tabs!
Governor Dennis Daugaard has signed House Bill 1148, which exempts seasonal workers in our tourism industry from the minimum wage. The bill passed with surprisingly little opposition from either the State House or Senate. Once again, South Dakota is a right-to-work state, but not a right-to-earn state.
Governor Daugaard is already carrying out the political plan to make us forget about this terrible, horrible, no good, very bad budget year in time for his re-election in 2014. In a thank-you note to state employees, the governor signals that this year's hard budget choices may allow him to offer state employees a raise next year. That would by the first raise for us state employees since July 1, 2008. In the mean time, Governor Daugaard praises state employees for our "self-reliance, persistence, and frugality," values he has made his rhetorical centerpieces since his inaugural address. Please forgive me if a feel just a little nervous getting the same praise from my boss that I might have gotten from Kim Il-Sung.
Don't tell those seasonal workers and state workers how lucky they are to enjoy South Dakota's lower cost of living. Data published by the Missouri Economic Research and Information Center finds that in the fourth quarter of 2010, South Dakota's cost of living was just 1.5% less than the national average. I don't have Q4 income data, but in Q3 2010, South Dakota's personal income was 4.1% below the national average. In other words, South Dakotans have less purchasing power than the national average.
Our 98.5% cost of living index is an improvement over the third quarter of 2010, when we were at 101.3%, but it still ranks us a mediocre 26th nationwide. We used to regularly rank as one of the ten cheapest states to live. Our economic advantage on that front has evaporated.
Well, I can't say I'm surprised that our Cost of Living has gone up... We rely upon personal vehicles for transportation - and those have gone up astronomically. We rely upon food shipped to us - again, that's gone up. The price of land has skyrocketed, as has the cost of everything farmers put in/on the ground to grow food.
The average tax burden for South Dakotans is 7.9% of their income (vs. 9.7% nat'l average) for state & local taxes. If we already have less purchasing power, how is increasing our tax burden to pay higher state wages going to increase citizen purchasing power?
Do we have any good sources of research demonstrating higher public sector wages cause higher private sector wages? Otherwise aren't we robbing Peter to pay Paul?
On behalf of all the parents of college students working a summer job let me say thank you very much Gov. Daugaard. You just increased the amount of college loan debt our kids will have when they graduate.
Public school teachers working a summer job to make ends meet now have even more incentive to quit teaching.
Does that cost of living index "data" include average state and local taxes? I don't see it heading up any of the columns in the table.
Stan, I don't know if the MERIC data includes taxes. Wayne, I can see the point that higher public sector spedning takes money out of the private sector... but is that the whole picture? We pay those public employees. They have more money to buy popcorn, sheetrock, and F-150s. They also provide valuable public services -- roads, training, police protection, parks -- that lower the cost of doing business for the private sector (want to plow your own highway and teach all of your employees algebra?). Your statement may make sense to a point, but at some level, taking minimal or zero dollars out of the private sector leaves us with detrimentally low public services. (When I get done with the DSU degree, I really need to go get an econ degree!)