Minimum Wage, Living Wage and Cost of Living: How Does South Dakota Compare?

SIOUX FALLS, SD (KELO) — On January 1, 2022, South Dakota’s minimum wage will increase by 50 cents, from $9.45 per hour to $9.95 per hour. That will put South Dakota in 24th place in minimum wage, behind 23 other states.

DC has the highest minimum wage in the country 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 2021 and 2022 wages.

District of Colombia $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
Caroline from the south $7.25
Tennessee $7.25
Texas $7.25
Utah $7.25
Wisconsin $7.25
Wyoming $7.25
Porto Rico $6.55

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

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

However, the minimum wage itself does not tell the whole story. Missouri Center for Economic Research and Information (MERIC) provides a cost of living for each US state and Washington DC, as of the third quarter of 2021. The higher the index, the higher the cost of living.

Of the 50 states and Washington DC, 21 have an index of 94.9 or less, 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 more.

Puerto Rico is not included in MERIC data.

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

Hawaii 185.6
District of Colombia 154.4
California 146.9
New York 143.7
Massachusetts 132.4
Oregon 127.5
Alaska 125.7
Maryland 121.4
Connecticut 119.5
New Jersey 118.3
Rhode Island 115.8
Vermont 114.8
Washington 112.8
New Hampshire 112.6
Maine 110.9
Arizona 107
Delaware 106.6
Colorado 105.8
Nevada 103.3
Florida 101.5
Utah 101.5
Montana 100.8
Pennsylvania 100.5
Minnesota 99.6
Virginia 98.1
North Dakota 97.8
Idaho 97
North Carolina 96.4
South Dakota 96.2
Wisconsin 95.5
Caroline from the south 94.8
Kentucky 93.9
West Virginia 93.9
Nebraska 93.6
Wyoming 93.6
Ohio 92.9
Louisiana 92.8
Texas 92.6
Arkansas 92.1
Michigan 91.4
Missouri 91.2
Indiana 91.1
New Mexico 90.6
Illinois 90.5
Iowa 90.3
Tennessee 90
Georgia 89.8
Alabama 88.6
Oklahoma 88.2
Kansas 86.9
Mississippi 85

At the crossroads of the minimum wage and the cost of living is the living wage. Essentially, the living wage is the amount a worker needs to earn to maintain a decent standard of living capable of meeting 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. Of the 50 states, South Dakota is tied with Arkansas and West Virginia for the 2nd lowest living wage in the nation, behind Kentucky at $43,000.

Hawaii 61,000
Connecticut 60,000
Massachusetts 60,000
New York 59,000
Maryland 58,000
California 57,000
New Jersey 56,000
New Hampshire 55,000
Alaska 54,000
Colorado 54,000
Virginia 54,000
Delaware 53,000
Nevada 53,000
Rhode Island 53,000
Florida 52,000
Illinois 52,000
Minnesota 52,000
Oregon 52,000
Vermont 52,000
Arizona 51,000
Maine 51,000
Washington 51,000
Wisconsin 51,000
North Carolina 50,000
Pennsylvania 50,000
Iowa 49,000
Michigan 49,000
Georgia 48,000
Kansas 48,000
Louisiana 48,000
Nebraska 48,000
New Mexico 48,000
Texas 48,000
Utah 48,000
Wyoming 48,000
Indiana 47,000
Montana 47,000
North Dakota 47,000
Oklahoma 47,000
Caroline from the south 47,000
Tennessee 47,000
Alabama 46,000
Idaho 46,000
Mississippi 46,000
Missouri 46,000
Ohio 46,000
Arkansas 45,000
South Dakota 45,000
West Virginia 45,000
Kentucky 43,000

This means that of the 50 states (Puerto Rico and DC are not included), South Dakota is the least expensive to survive. But how does a minimum wage of $9.95 correspond to a living wage of $45,000?

Assuming a 40-hour work week and 50 work weeks per year, a salary of $9.95 works out to $19,900 per year. To match South Dakota’s living wage, the minimum wage would have to increase to $22.50/hour.

Michael A. Bynum