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Analysis of Minimum Wage Hike: $47 Million in Raises, Maybe 300 Jobs Lost

The South Dakota Budget and Policy Project has just issued a report analyzing the impact of Initiated Measure 18, the ballot proposal to increase South Dakota's minimum wage. The highlights that should inform your vote:

  • 64,000 South Dakotans will get a raise.
  • 34,000 of those workers currently make under $8.50. Bringing them all up to the proposed minimum will translate into an average yearly raise of $1,125.
  • The other 28,000 currently make between $8.50 and $9.75. SDBPP estimates that those workers will get an average annual raise of $300 as employers adjust their pay scales.
  • 78% of those getting raises will be adults.
  • 76% of those getting raises have finished high school.
  • 45% of those affected workers are working full-time.
  • 21% work less than 19 hours a week.
  • The wage hike could kill 357 jobs, if the change has the same impact that the CBO calculates would come from a hike to $9.00. We're fifty cents shy of that, so I say scale that back a snudge: 300 jobs? Heck, let Mike Rounds recruit some more EB-5 investors, and we'll make up for that in no time, right?

Let's see: nearly $47 million in new wages for folks to spend at Hy-Vee and Schoeneman's, versus maybe 300 fewer jobs worth a fraction of that income. Put those figures in the scales, voters, and tell me which way you tilt.


  1. Tim 2014.09.27

    Cory, I'm not sure those 300 jobs will be lost, as I travel the state working I notice businesses all over the state are begging for workers, granted most of those beggars are minimum wage places like fast food and what have you but, will those jobs really be lost, assuming the jobs that are eliminated will also be minimum wage jobs? Just a thought.

  2. Tim 2014.09.27

    Yep, definitely a right wing Kool-aid overdose. That person hasn't looked at any of the documented proof coming from other states that raising the minimum wage has little to none of the effects he writes in that article. Of course we all know that South Dakota is different and none of that proof applies here. Sad thing is, the weak-minded right wing base will point to that article and say "see we told you, damn liberals".

  3. Bill Fleming 2014.09.27

    Cory, do we know where this year's political candidates for political office stand on the minimum wage increase? I know Weiland is for it, and I'm assuming most Democrats are, but don't know for sure. Maybe we could see one of those "checklists" like Stacy and Gordo like to bust out around election time.

    "Where Does Your Candidate Stand on the Minimum Wage Increase?" You know... a cool little table or something. Has anybody compiled that info?

  4. Francis Schaffer 2014.09.27

    Bill, I would rather know if they suffer from Dunning Kruger.

  5. Roger Elgersma 2014.09.27

    When Cabellas came to Mitchell, the town would only allow them to come if they paid one dollar an hour less than they planned since they paid more than main street. So Cabellas sends that much more in profit out of state to corporate profits rather than let those employees spend that much more on main street Mitchell. So main street could have afforded to pay more to their employees also with the extra profits. I
    In actuality, only the worst managers would have to lay off workers. So the real effect of raising the minimum wage is that business gets more efficient. The bad managers should not be able to continue by underpaying their workers. Both managers and workers should lose if they do a poor job. Not just workers getting fired if they do bad and workers losing if management does bad. Keeping wages low to pamper bad management is not good for America.

  6. Bill Fleming 2014.09.27

    Lol Francis. Only problem with that would be, how would they know?!

  7. Francis Schaffer 2014.09.27

    Precisely my point. Sufferers are never the ones who notice first.

  8. W R Old Guy 2014.09.27

    I note that there are a lot of businesses hiring in the Black Hills. Many of them are paying $8.25 to $14.00 per hour to start. These are retail stores, fast food, and service jobs. A couple of cleaning services offer $12.00 to $14.00 to start.

    The Base Exchange at Ellsworth (BX) has a small food court with a Burger King, a grilled subs franchise and a pizza franchise. I was at the base two weeks ago and found that the Burger King was the only one open. The other two had signs posted saying "Temporarily closed due to lack of employees". There were also several "Help Wanted" signs posted with a starting wage of $ 8.30 per hour. I doubt that raising the wage to $8.50 will cost jobs and may not help fill some.

  9. larry kurtz 2014.09.27

    Rapid City is hardly an isolated labor vacuum. When Wall Drug and the traps can't find people then action will be taken leaving the Dems with holding a very low bar.

  10. larry kurtz 2014.09.27

    Climate and water will guide demographics in the Bakken and West River, another brutal winter precipitated by a melting ice cap will smite the region again because it deserves it.

    The Rapture can't come soon enough.

  11. Roger Cornelius 2014.09.27

    About those 300 lost jobs, any business that can't their employees a minimum wage let alone a living wage have not business being in business.

    A little wishful thinking here, but if the state raises the minimum wage and Susan Wismer adds Medicaid Expansion, what an economic boom it would be for the state.

  12. Michael B 2014.09.27

    As with everything else in this world, the law of unexpected consequences will put a twist on things.

    If you are the poor soul that is only paid minimum wage for a job that you love, then it is a direct benefit to you. Sometimes government mandates work the other way and businesses are forced to close. In some small towns that business might be the cafe or gas station that everyone depends on to be there. There will be winners and losers.

  13. jerry 2014.09.27

    Good deal that there will be a raise because Initiated 17 will erase that and then some.

  14. Jenny 2014.09.27

    Well, state govt voted to raise the minimum wage to $8/hr in MN on Aug 1st, and I haven't heard of any drastic layoffs b/c of it. The MN unemployment rate has actually fallen slightly since then.
    I can just foresee SD, as usual, voting against this initiative.

  15. mike from iowa 2014.09.28

    Minimum wage hike good. Didn't we try whitey wingnut attempt to make minimum wage jobs in fast food industry more palatable(about a decade ago) by renaming them manufacturing jobs? How did that work out?

  16. mike from iowa 2014.09.28

    Sure we did.-

  17. Francis Schaffer 2014.09.28

    mike from iowa, I find your link useful, funny and sad all at the same time. Whoever came up with this idea didn't have all their oars in the water.

  18. mike from iowa 2014.09.28

    Francis Schaffer-imo that was a systemic flaw of the w bush administration. War mongering and profiteering of,for and by the 1% is what that bunch of Gumbys excelled at. Everything else- not so much.

  19. lesliengland 2014.09.28

    mike b-govt wage mandate unnecessary unless small town café or gas station that everybody depends on uses business model that maintains poverty status of employed.

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