I think the South Dakota Retailers Association (of which I'm a dues-paying member in good standing) is nuts to be putting up such a spirited fight against Initiated Measure 18. It's the ballot issue that will immediately raise the minimum wage in South Dakota from $7.25 to $8.50 an hour and provide for annual cost of living increases every year thereafter. Along with SDRA, the South Dakota Chamber of Commerce and Industry also opposes the measure, the general argument being that being forced to raise wages for their lowest-paid employees will actually decrease employment. I think that's basically a lot of hooey. The non-partisan South Dakota Budget and Policy Institute last September did, in fact, conclude 357 South Dakotans would lose their jobs over the increase, but in a state with 450,000 workers that number is so statistically insignificant as to be meaningless.
In that same SDBPI report, the institute notes that about 1 out of 6 South Dakotans would see wage increases if IM 18 passes. That's about 17% of the workforce, or 77,000 people, and it makes me pose this question: Retailers and Cof C types, aren't you missing something? While you rail against employers being forced to raise wages from exploitative to merely sub-subsistence levels, consider that nearly 80,000 South Dakotans will be getting an extra couple of hundred bucks a month to spend in your businesses if IM 18 passes. Do the math. That's 15 million bucks a month! Who's the genius at the Retailers association that's so dead set against that? Meantime, I want to meet the SDBPI economists who thinks that sudden surge of spending is likely to result in a loss of any jobs whatsoever.
First thing I'd show them is a report last Summer from the Center For Economic Policy and Research that shows exactly the opposite. The CEPR report cites a Goldman, Sachs study showing that the 13 states that raised their minimum wages at the beginning of 2014 have experienced faster job growth rates than the 37 that haven't. I have absolutely no doubt whatsoever that in every one of those states that raised the minimum wage there was a cadre of doubting Thomases from the business community who insisted that job losses would occur as a result. The fact is, reality and common sense have proven them wrong.
I see in the Rapid City Journal today that the editorial board recommends a No vote on IM 18, explaining that market forces "tend to do a good job" of setting wages. I really couldn't disagree more, and I believe that the labor shortage in South Dakota contradicts the notion that market forces here have done a good job of "managing who gets paid what," as RCJ put it. Governor Daugaard himself set a tone of serious concern about our labor situation by initiating a series of "workforce summits" to address the issue in 2014. I believe if the labor market were efficient in South Dakota, that chronic worker shortages wouldn't be the bane of economic growth in this state.
This is a situation where voters can indeed kick start the state into a realm of competitive wages, because the organizational stasis evidenced by South Dakota's leading business organizations won't get us to budge off our low-wage, low-job numbers dime. The trees of marginal cost increases created by higher wages are blinding opponents to the forest of a surging economy. IM 18 puts more spending cash into the hands of the very people who are responsible for the strength of our economy in the first place.