New Minimum Wage Law Faces Challenge From South Dakota Republicans

Last November, South Dakotans voted to raise the minimum hourly wage to $8.50 and index future increases to the annual rate of inflation -- or so they thought. Now, Republican legislators are pressing ahead with a bill that would allow the minimum wage to drop.

A proposal from Representative Jim Bolin, which was approved by a House committee on Friday, would eliminate language in the new law that expressly prevents the state from ever decreasing its inflation-adjusted minimum wage. Bolin’s logic: If the annual cost of living declines, then so should the minimum wage.

"If we're going to have a [consumer price index] component to this measure, we should have one that's a two-way street," Rep. Bolin told the committee last week.

Democrats in South Dakota say the proposal ignores popular will. Voters backed the recent wage hike -- and the language barring a decline in the minimum wage -- by a 55-45 margin.

Last year saw an average inflation rate of 1.6 percent. While a decline in the consumer price index is rare, it is not unprecedented. In the heat of the recession, from 2008 to 2009, the U.S. saw a deflation rate of 0.4 percent.

Progressives say the proposal disregards mounting concerns over low-wage workers and growing momentum to raise the minimum wage.

“Even right-wing Republicans like Jeb Bush get the importance of economic populism, at least in rhetoric, but it seems the memo has yet to reach South Dakota Republicans,” said AFL-CIO Senior Press Secretary Josh Goldstein. “Rep. Jim Bolin is finding himself in a lonely group of the last few lawmakers in America still trying to lower wages for working people.”

In the absence of federal action, states and municipalities are increasingly taking steps on their own to raise the minimum wage. Last November, voters in three other Republican-leaning states -- Alaska, Arkansas and Nebraska -- passed wage hikes by referendum. Meanwhile, 10 states and the District of Columbia enacted wage increases during the 2014 legislative session.

President Barack Obama backs an increase in the federal minimum wage from $7.25 to $10.10 and indexing it to inflation.