South Dakota sees an increase in minimum wage

South Dakota News

(AP Photo/Elise Amendola, File)

SIOUX FALLS, S.D. (KELO) — The server at the local restaurant, the prep cook or a childcare worker may be among those benefiting from two new minimum wage increases in South Dakota.

South Dakota increases its minimum wage today to $9.30 per hour, up from $9.10 in 2019. The minimum wage also increased for tipped employees to $4.65 per hour.

A tipped employee is “an employee is one engaged in an occupation in which the employee customarily and regularly receives more than $35 a month in tips or other considerations,” the South Dakota Department of Labor and Regulation said.

Employers must make up the difference each pay period when the employee’s wages and tips do not meet at least the $9.30 per hour minimum wage, according to the South Dakota Department of Labor and Regulation.

The minimum wage requirement applies to all employees, according to the state department of labor.

South Dakotans passed a measure in 2014 to raise the minimum wage of $7.25 per hour to $8.50 per hour in 2015. The minimum wage will be raised at the same rate as the cost of living as measured in the Consumer Price Index.

South Dakota’s minimum wage was below $4 per hour until 1992 with several increases that followed. From 2010-2014, the minimum wage was $7.25 per hour.

A person making minimum wage working 40 hours a week would make $19,344 a year or $372 per week.

The new $9.30 per hour means a person working 40 hours a week will make more than the federal poverty guideline of $12,490 for a single-person household. The poverty level is $16,240 for a two-person household and $20,420 for a three-person household. The income level increases as the household size increases.

The U.S. Census Bureau said 13.1% of South Dakota’s residents live in poverty.

The U.S. Bureau of Labor Statistics data, South Dakota Department of Labor and Regulation data and other similar data shows that foodservice and certain hospitality jobs are generally jobs that can fall into the minimum wage range. Also, a portion of the jobs in these fields are part-time positions which impacts the overall income but not the required minimum wage.

The $9.30 per hour or $19,344 is also on the low-end of what many in the foodservice industry make in the state and in the markets of Sioux Falls and Rapid City, according to data from the South Dakota Department of Labor and Regulation.

The median income for waiter or waitress in South Dakota is $9.62 per hour which means half of such employees make less than that while half make more. The mean income is $10.54 per hour.

Foodservice jobs are found throughout South Dakota but take downtown Sioux Falls as an example.

The Downtown Sioux Falls organization says that 8.6% of downtown jobs are in serving and food preparation. Some of the jobs may be part-time or full time, which impacts the overall income.

DTS said 21.1% of the 9,230 downtown jobs are low wage workers. DTS defines low wage workers as those earning $1,250 a month or less. The data is not based on the new $9.30 per hour minimum wage.

A $19,344 40-hour minimum wage annual salary divided by 12 months is $1,612 per month.

And based on data from the U.S. Bureau of Labor Statistics and various wage studies, one group that may be benefiting greatly from the increases is women.

An April 2012 report by the National Women’s Law Center said in 2011 in South Dakota, women made up about two-thirds of all workers that were paid minimum wage or less, totaling almost 2.4 million women 16 and older.

In terms of income, women still make less than men in South Dakota for full-time work but there have been gains since at least 2016.

In 2019, South Dakota women earned about 80 cents for every dollar earned by a man.

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