Minimum wage, living wage and cost of living: How does South Dakota stack up?

KELOLAND.com Original

SIOUX FALLS, S.D. (KELO) — On January 1, 2022, South Dakota’s minimum wage will rise 50 cents from $9.45 an hour to $9.95 an hour. This will put South Dakota in 24th place in terms of minimum wage, behind 23 other states.

D.C. has the highest minimum wage in the nation at $15.20, while Puerto Rico comes in with the lowest at $6.55.

Note: Not all states have announced a minimum wage increase for 2022, so the minimum wages listed below combine wages from 2021 and 2022.

District of Columbia$15.20
California$15.00
Washington$14.49
Massachusetts$14.25
Connecticut$14.00
Oregon$13.50
New York$13.20
New Jersey$13.00
Arizona$12.80
Maine$12.75
Colorado$12.56
Vermont$12.55
Maryland$12.50
Rhode Island$12.25
Illinois$12.00
New Mexico$11.50
Missouri$11.15
Arkansas$11.00
Florida$11.00
Virginia$11.00
Delaware$10.50
Alaska$10.34
Minnesota$10.33
Hawaii$10.10
South Dakota$9.95
Michigan$9.87
Nevada$9.50
Ohio$9.30
Montana$9.20
Nebraska$9.00
West Virginia$8.75
Alabama$7.25
Georgia$7.25
Idaho$7.25
Indiana$7.25
Iowa$7.25
Kansas$7.25
Kentucky$7.25
Louisiana$7.25
Mississippi$7.25
New Hampshire$7.25
North Carolina$7.25
North Dakota$7.25
Oklahoma$7.25
Pennsylvania$7.25
South Carolina$7.25
Tennessee$7.25
Texas$7.25
Utah$7.25
Wisconsin$7.25
Wyoming$7.25
Puerto Rico$6.55

The federal minimum wage is $7.25 per hour. While individual states may institute a higher minimum within their own state, no state can go lower than $7.25.

The purpose of the minimum wage as it was created by the Fair Labor Standards Act (FLSA) in 1938 is to “create a minimum standard of living to protect the health and well-being of employees.

Minimum wage itself does not tell the whole story, however. The Missouri Economic Research and Information Center (MERIC) provides a cost of living for each U.S. state and Washington D.C., as of Q3 of 2021. The higher the index, the higher the cost of living.

Of the 50 states and Washington D.C., 21 have an index of 94.9 or lower, 12 have an index between 95 and 104.9, 7 have an index between 105 and 114.9, while 11 have an index of 115 or greater.

Puerto Rico is not included in MERIC’s data.

Among these states and D.C., South Dakota has the 29th highest cost of living, with an index of 96.2.

Hawaii185.6
District of Columbia154.4
California146.9
New York143.7
Massachusetts132.4
Oregon127.5
Alaska125.7
Maryland121.4
Connecticut119.5
New Jersey118.3
Rhode Island115.8
Vermont114.8
Washington112.8
New Hampshire112.6
Maine110.9
Arizona107
Delaware106.6
Colorado105.8
Nevada103.3
Florida101.5
Utah101.5
Montana100.8
Pennsylvania100.5
Minnesota99.6
Virginia98.1
North Dakota97.8
Idaho97
North Carolina96.4
South Dakota96.2
Wisconsin95.5
South Carolina94.8
Kentucky93.9
West Virginia93.9
Nebraska93.6
Wyoming93.6
Ohio92.9
Louisiana92.8
Texas92.6
Arkansas92.1
Michigan91.4
Missouri91.2
Indiana91.1
New Mexico90.6
Illinois90.5
Iowa90.3
Tennessee90
Georgia89.8
Alabama88.6
Oklahoma88.2
Kansas86.9
Mississippi85

At the crossroads of minimum wage and cost of living, is the living wage. In essence, the living wage is the amount a worker must earn to maintain a decent standard of living, able to provide for basic needs such as housing, food, healthcare, and other essentials.

The living wage in South Dakota as calculated by World Population Review, adjusted for inflation, is $45,000 per year. Out of all 50 states, South Dakota ties with Arkansas and West Virginia for the 2nd lowest living wage in the nation, behind only Kentucky at $43,000.

Hawaii61,000
Connecticut60,000
Massachusetts60,000
New York59,000
Maryland58,000
California57,000
New Jersey56,000
New Hampshire55,000
Alaska54,000
Colorado54,000
Virginia54,000
Delaware53,000
Nevada53,000
Rhode Island53,000
Florida52,000
Illinois52,000
Minnesota52,000
Oregon52,000
Vermont52,000
Arizona51,000
Maine51,000
Washington51,000
Wisconsin51,000
North Carolina50,000
Pennsylvania50,000
Iowa49,000
Michigan49,000
Georgia48,000
Kansas48,000
Louisiana48,000
Nebraska48,000
New Mexico48,000
Texas48,000
Utah48,000
Wyoming48,000
Indiana47,000
Montana47,000
North Dakota47,000
Oklahoma47,000
South Carolina47,000
Tennessee47,000
Alabama46,000
Idaho46,000
Mississippi46,000
Missouri46,000
Ohio46,000
Arkansas45,000
South Dakota45,000
West Virginia45,000
Kentucky43,000

This means that of the 50 states, (Puerto Rico and D.C. are not included) South Dakota is one which costs the least to survive in. But how does a $9.95 minimum wage match up to a $45,000 living wage?

Assuming a 40-hour work week, and 50 working weeks per year, a $9.95 wage comes to $19,900 per year. To match the living wage for South Dakota, the minimum wage would need to rise to $22.50/hour.

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