How a minimum wage increase could impact small businesses in South Dakota

Local News

SIOUX FALLS, S.D. (KELO) – Friday night, the U.S. House is expected to vote on the $1.9 trillion COVID relief plan, which includes raising the federal minimum wage to $15 an hour.

The proposed wage hike is getting support but also a lot of pushback. In fact, the Senate is expected to eliminate the wage hike from the relief plan, following a ruling Thursday night.

“I’ll tell you right now, in South Dakota, the minimum wage, and our state sets it, which is frankly where I think it should be done, our state has a $9.45, $9.45 minimum wage. What you’re essentially telling those businesses in South Dakota that I just mentioned that you’re going to increase the amount of money that they have to pay their workers by over 50 percent,” U.S. Senator John Thune (R) said.

For many businesses, it will be a significant increase, but it won’t happen right away.

H.R. 603, or the ‘Raise the Wage Act of 2021,’ looks at what it would look like to gradually increase the minimum wage to $15 by 2025. The Sioux Falls Food Co-op’s general manager supports the idea because it’s something he’s already working toward.

“We implemented a living-wage model almost five years ago now. So we’ve been gradually working our way up to that over the last about three years,” Patrick Sayler, the general manager of the Sioux Falls Food Co-op, said.

Sayler says, for them, $15 is doable because they’ve planned for it.

“Gradually stepping it up is extremely important. You know, if you jump from, you know, let’s say a $10 an hour average wage, or something, all the way up to $15 that’s a massive increase all at once. More than likely you’re going to need to have one person doing the job of two or three. Of course, you may need to have some lay-offs,” Sayler said.

He believes when it is time to raise the minimum wage, lawmakers should find ways to make it easier for small businesses.

“I would like to see the plan include assistance, in some way, for smaller businesses to either subsidize what is going to happen when that higher minimum wage goes into place, or even just some sort of SBA assistance for planning,” Sayler said.

H.R. 603 has been sent to the House Committee on Education and Labor.

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