$15/hr Minimum Wage unsustainable, despite it’s passage in cities.

I just caught an interesting article from the American Enterprise Institute that should give business owners as well as taxpayers pause. There have been several leftward city councils who have passed a $15/hour minimum wage such as San Francisco, Seattle, and most recently Los Angeles.

The problem with a $15/Hour minimum wage? It’s impossible to sustain:

Every political season, Democrats argue for higher minimum wages. Republicans respond by citing all of the evidence that higher minimum wages are harmful. Democratic voters get charged up and swing voters conclude that Republicans are heartless. It is the gift that keeps on giving for Democrats, but the curse that keeps on afflicting those below the poverty line who lose their jobs because of it.

Though Hillary Clinton has made it clear that she is going to play this game, much of the action is coming from around the country, where America’s progressive mayors have taken this form of government price-setting to new heights. In Los Angeles, Mayor Eric Garcetti recently signed legislation that would raise the minimum wage in the city to $15 by 2020. And this move in Los Angeles comes on the heels of Seattle’s and San Francisco’s adoption of the same policy.

The evidence is clear about whether raising the minimum wage is an effective way to help poor people: It is not.


As the chart shows, if every dollar of U.S. corporate profits were allocated to America’s employees, the effect would be to add a bit more than $7 to the average wage. The chart adds interesting perspective to the new policy in Los Angeles. The difference between the $15 Los Angeles target and the federal minimum wage of $7.25 is $7.75. At $7.57, the current value of the expropriationsubsidy is slightly lower. Mayor Garcetti’s minimum wage legislation has, it seems, taken economic populism to its logical extreme—and beyond.

Read it all here.

if every dollar of U.S. corporate profits were allocated to America’s employees, the effect would be to add a bit more than $7 to the average wage” versus “The difference between the $15 Los Angeles target and the federal minimum wage of $7.25 is $7.75.

On a national basis, a $15 Minimum wage doesn’t just remove all traces of corporate profits, it creates a deficit of $.75 an hour.  The simple economics of it don’t work.

Regionally, it has the potential of shifting a significant number of portable jobs that can be done elsewhere out of those areas. If such a thing came to pass nationally, I think we have the potential to see job automation and job exporting at a level never considered.

And that’s a bit of the problem with South Dakota’s open-ended minimum wage law. There’s no cap. The sky is the limit.

If our open-ended state minimum wage law survives the inevitable court challenge that will come the first time the inflationary increase kicks in, state business owners – the ones who give the jobs to people – are going to have to make some hard decisions over what’s affordable to do in the course of business, and what isn’t.

Governor Daugaard on hand to welcome Black Hills Corp corporate HQ expansion in Rapid City.

BOOM! And Governor Daugaard drops the microphone. Why? Because there’s not much to say after the Black Hills corporation announced their plan to invest over $70 Million into Rapid City via setting up their new corporate headquarters.

And once again, it’s proven that South Dakota IS one of the top places for business in these United States:

Among those present was Gov. Dennis Daugaard, who said the expansion is proof of what some national media and analysts have reported of late: that South Dakota is a top state for doing business. “What a great day for Rapid City and a great day for South Dakota,” Daugaard said. The company, he said, is “demonstrating their intent to be here for the long haul.”

Rapid City Mayor Sam Kooiker said the $70 million project equates to about 10 percent of the city’s overall development investment over the past three years. “This is a huge investment in our community,” Kooiker said.

Emery said later that no rate hike is expected to pay for the construction. Black Hills Power recently obtained state approval for a roughly 4.35 percent rate hike for about 65,000 South Dakota customers, the second price jump in less than two years. But, Emery said, “We don’t believe the (headquarters) facility is going to directly drive a rate increase.”

Read it here.

Dem’s minimum wage increase to benefit students causing service cuts for students.

Remember the minimum wage increase promoted by State Democrats and passed by voters? Democrats poo-poohed arguments that it mainly benefitted high school and college students who are working these low wage, part-time positions while they also go to school.

Well, here’s a real world example of exactly who the measure is hurting. In the January 14th edition of the SDSU Collegeian student newspaper, the top of the fold story is titled “New Minimum Wage Affects Union Hours”  and discusses how the SDSU Student Union has been forced to cut hours so as to remain on budget directly as a result of the minimum wage:

Students learned this week that the Union will close at 10 p.m. daily. This cuts two hours off of the former hours in order to adjust, for the minimum wage increase that went into effect Jan. 1 according to this week’s Monday morning message sent out by Students’ Association President, Caleb Finck.


In order to compensate for the minimum wage increase from $7.25 to $8.50 per hour, Novotny along with other administration, including the Student Union Advisory Committee, had to make changes in the facility, Novotny said The. changes need to compensate for a total of $30,000 in student labor.


If The Union goes back to closing at midnight next year, funding for the facility will have to increase. This money will most likely come from a General Activity Fee increase, meaning that students will have to pay more to keep the building open later.

Read it all here.

Cutting hours to remain on budget… and if they want those hours back, they’re going to face a general activity fee increase, pushing their tuition up higher.

Cuts in services and increased tuition fees. All I have to say is to remind them to remember who made this happen. The South Dakota Democrat Party.

Daugaard has no plans to revise minimum wage law. But there could be legislation introduced.

Governor Daugaard has no plans to propose changes to the minimum wage law. But he wouldn’t be shocked if we did see some:

Gov. Dennis Daugaard told members of the South Dakota Retailers Association on Monday he personally would not bring forward any proposed changes to the new minimum wage law passed by South Dakota voters as a ballot measure in November, but said he wouldn’t be surprised if some legislators did.


Changing the law “would be a little bit of an affront to the voters who just adopted it,” Daugaard said, even though he opposed the measure. “I voted against it. I know many of you opposed it,” the governor said, speaking to members at the SDRA annual meeting held in Pierre at the Ramkota River Centre.


The SDRA is gathering stories from its members about any impact of the new law, such as price hikes, staff reductions and reduced benefits, to share with lawmakers and others.

“It’s not just businesses being affected by the new law. It’s nonprofits, it’s daycare providers,” Lyons said.

Read it all here.

Pierre residents want their Hy-Chi, petitioning at moveon.org.

I caught this in my facebook feed this morning.

Coming on the heels of the consolidation of Dakotamart and Sutley’s in the Pierre/Ft. Pierre area, nearly 1000 Pierre/Ft.Pierre residents are petitioning the HyVee corporation at Liberal Democratic web site MoveOn.org to “Let the corporate offices for Hy-Vee know there is a want for a grocery store in Pierre/Fort Pierre, SD.”

I can’t blame them for wanting their Hy-Chi (HyVee Chinese Deli counter), but corporations don’t make decisions on petitions. They look at traffic. They look at numbers, and make decisions on the basis of whether they can make a profit.  There was a chain grocery store in Pierre one point, but it didn’t make it.  And that was long before Wal-mart expanded, and increased their grocery offerings nearly ten-fold

I love my local Hy-vee. And considering what I spend there for my pile of kids, I’m sure they love me too.

But, it’s not a field of dreams. If you build it, there’s no guarantee they’ll come. But if you have the numbers, that’s a different story.