In the United States, the minimum wage has become a topic of considerable debate and disagreement over the years. Although national legislation is continuously making efforts to set a standard rate, the responsibility of setting their own minimum wage has been delegated to many of the individual states. South Dakota has been no exception.
For the past seven years, South Dakota has kept its minimum wage well below the national federal government’s rate of $7.25 per hour. Before 2016, South Dakota employers were allowed to pay new hires and employees under age 20 a lower minimum wage, $4.25 per hour. Workers aged 20 and above were given the federal minimum wage of $7.25 per hour. In 2016, South Dakota increased its overall minimum wage rate to $8.55 per hour for all hourly employees, and then again in 2018 to $9.10 per hour. The rate was set to increase incrementally each year and it is anticipated that the rate in South Dakota by 2023 will be $9.85 per hour.
In order to ensure workers are receiving a fair and livable wage in South Dakota, the Governor passed a law in 2019 that allowed the minimum wage to increase annually based on the Consumer Price Index (CPI). The CPI is a measure of the average change over time in the prices paid by consumers for a basket of goods and services. By linking the rate of increase at an annual level to the CPI, the Governor ensured that the rate will increase gradually with the rate of inflation, so the minimum wage is still purchasable in the state.
Although the increase has been gradual, it still greatly impacts both employers and employees. One benefit for employers is the chance to reduce employee turnover rates. With a higher, stable minimum wage rate, employees can now count on receiving a fair employer and in turn, will be more likely to stay within the same job for an extended period of time. To employees it means more money in their pockets to spend on the goods and services they need. This higher wage has allowed them to provide for their families, pay off debt, and better their financial situations. In addition, many local businesses have seen their sales increase due to the wage increase, as employees now have more money to spend when they go out.
It is thus safe to conclude that in 2023, the US Minimum Wage in South Dakota will be $9.85 per hour. Although this wage can seem low compared to other American states, South Dakota employers and employees alike must understand that this rate has been closely linked to the rate of inflation, and will ensure the long-term financial stability of the region and its inhabitants.
