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Analysis: Workers feel 'wage power,' but more support is needed

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Wednesday, January 10, 2024   

Workforce shortages are among the issues lawmakers might address in the new South Dakota legislative session.

A new analysis of wage growth progress might give them an idea of what to build on. The findings from the Center for American Progress show late last year, nearly six in 10 workers were earning higher annual wages, when adjusted for inflation, than the year before.

Brendan Duke, senior director for economic policy at the Center for American Progress, said real wage growth means a lot more people have purchasing power, even if consumer prices have been stubbornly high, and it appears to be benefiting those who need it the most.

"Low wage workers have actually been doing the best over the last year or two," Duke reported. "They've seen the strongest wage growth."

But Duke acknowledged there's a long way to go, given many decades of wage inequality in the U.S. This year, South Dakota has increased its minimum wage. But the analysis showed other changes could help, including reforms to overtime laws to give more support to middle class workers.

Last year, South Dakota approved several policies designed to accelerate hiring for the more than 20,000 job openings across the state. Additional moves are expected this year.

Duke argued further addressing family expenses, like child care costs and housing affordability, could also benefit workers and the impact on their take-home pay.

"They don't show up in the wages," Duke acknowledged. "But when you compare your income and your costs, reducing those costs can obviously make a huge difference."

One of the controversial proposals still up for debate is whether South Dakota should eliminate its grocery sales tax. Meanwhile, the analysis found coming out of the pandemic, real wage growth for the average worker has seen the second-fastest recovery since 1980. Duke added the positive movement appears to be happening in all states, and it is not an uneven recovery.


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