Companies that want a loan from South Dakota's "flagship financing" fund must pay their workers at least $15 an hour.
The wage hadn't been raised since 2012, when it was $10.50 an hour.
The Board of Economic Development increased the minimum wage for its Revolving Economic Development and Initiative (REDI) Fund last month. It went into effect on Nov. 1.
The board also decided to give priority to companies that pay $20 an hour or $25 for engineering, technology and similar advanced, high-paying fields.
"The BED seeks to incentivize those companies who provide higher paying jobs to the state," said Greta Stewart, marketing director at the Governor's Office of Economic Development.
The REDI fund provides low-interest loans to startups, local economic development corporations and businesses that are relocating or expanding in South Dakota.
The loans cover up to 45% of the project's total cost and require a 10% minimum equity contribution. They can be used to pay for land, buildings, construction, equipment, installation costs, renovations and improvements.
The minimum wage increase for REDI loans comes as workers are expecting — and seeing — higher wages across a tight labor market in South Dakota and the nation.
The national unemployment rate is 4.6% while South Dakota's is 2.8%
National wages increased 4.2% from September 2020 through September 2021, according to the federal Bureau of Labor Statistics.
South Dakotans have seen a 3.9% wage increase from January 2020 to April 2021, according to the state Department of Labor and Regulation.
The state minimum wage is $9.45 an hour while the national minimum wage is $7.25. Tipped workers, some disabled workers and other groups can be paid less than the minimum wage.
