South Dakota Passes Qualified Minimum Wage Increase

This week South Dakota enacted legislation increasing the state hourly minimum wage—contingent upon an increase in the federal minimum wage law. South Dakota’s current minimum wage is fixed at $5.15 per hour—identical to the federal law—and will not increase until July 1, 2007 or until a federal raise is passed, whichever date is later. At that point, the wage will increase to $5.85, rising to $6.55 a year out and $7.25 in 2009.

The state Senate’s original version of the bill (as well as that of Republican Governor Mike Rounds) was not tied to federal action, but the GOP dominated House of Representatives approved the restrictive language on a 62 to 8 vote earlier in the month.

Congress has taken up federal minimum wage legislation, which could be approved as early as sometime this spring.

South Dakota and Iowa (along with 13 other states) currently have the lowest minimum wage laws in the United States at $5.15. An additional 5 states (all in the South) have no minimum wage law. Minnesota’s minimum wage is $5.25 for small businesses and $6.15 for larger businesses; in Wisconsin it is $6.50 for all employers.

Not surprisingly, South Dakota (9 percent) and Iowa (22 percent) also have a lower percentage of union households than Wisconsin (30 percent) and Minnesota (28 percent).

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