Does a dollar really go farther in South Dakota than other states?

(rapidcityjournal.com) - Could South Dakota actually have the highest minimum wage in the country?

Well, in a relative sense, when comparing the cost of living here with other states, the answer becomes a resounding "yes," according to a recent Washington Post analysis.

Of course, some Rushmore State residents may beg to differ, especially when comparing gas and food prices here to elsewhere.

But Niraj Chokshi, the Post’s state and local policy blogger, said the economic grass is indeed greener for South Dakota residents, whose buying power gets a boost from the state’s relatively low cost of housing and other living expenses.

"While minimum wages range from the federal floor of $7.25 in 20 states to $9.47 in Washington state, they are only as valuable as what they can buy, which also varies by geography, according to an analysis of purchasing power by state,” Chokshi wrote in a July 22 blog post, referring to one of three recent state-by-state comparisons of South Dakota's favorable cost of living.

Chokshi said South Dakota’s official minimum wage of $8.50 adjusts to $9.70 per hour, tops among adjusted wages in the 50 states and the District of Columbia.

Elsewhere among the top five states, that $9.74 per hour wage in Washington State drops to $9.18 in actual buying power when adjusted for buying power.

Neighboring Oregon ($9.25/hour) benefits slightly because of a cost of living adjustment, with $9.37 in buying power. Rhode Island and Vermont also offer minimums in excess of $9 per hour, with the adjusted minimum wages staying roughly the same, Chokshi wrote.

On the other end of the scale, New York’s high cost of living drops that state’s adjusted minimum wage from $8.50 to $7.59. Hawaii’s minimum of $7.50 per hour plummets to $6.67 after the cost of living adjustment.

“A dollar really does go a long way in South Dakota. That’s a true advantage when competing with businesses in other states,” said Bryan Walker, executive director of the Spearfish Economic Development Corporation, in a news release from the Rushmore Region Economic Development Group.

Home and housing prices appear to be the driving force in the state’s low cost of living.

According to a comparison of housing costs by state on trulia.com, an online residential real estate site for home buyers, sellers, renters and real estate professionals, South Dakota ranked 50th in the nation with an average for-sale listing price of $234,259.

Average rental costs in the state’s two largest metropolitan areas ranged from $372 per bedroom in Rapid City to $412 per bedroom in Sioux Falls.

Two other recent reports from the Tax Foundation included one ranking South Dakota among the top five states comparing the value of $100 in buying goods and services.

In Mississippi, $100 will buy $115.74, with South Dakota ($113.38) closely trailing Arkansas ($114.74), Missouri and Alabama (both at $113.51).

In the District of Columbia, that same $100 is only worth $84.60, the report said.

South Dakota also fared well in another Tax Foundation report that found the state’s per-capita disposable income rises 13.4 percent when the cost of living is factored, putting the state among the top 5 nationally.

All of that is music to the ears of state economic development officials tasked with bringing new business and industry to the state.

“South Dakota has always used our low cost of doing business and great business climate to attract employers, while at the same time highlighting the advantages of South Dakota's cost of living in our workforce marketing efforts. We plan to continue and expand those efforts,” said Mary Lehecka Nelson, marketing director for the Governor’s Office of Economic Development in Pierre.

Nelson said a new state website, youcanliveinSouthDakota.com, includes a real wage calculator that compares South Dakota to other locations. Full Story