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Starting January 1, Montanans earning minimum wage will see the rate increase to $8.65 per hour.

Montana has the sixth fastest wage growth in the nation, according to Governor Steve Bullock, who spearheaded the effort in 2006 to put on the ballot the initiative (I-156) to make all future adjustments in the minimum wage in Montana automatic. Bullock stated that this “ensures Montanans earning the minimum wage don’t fall further behind.”

An estimated 10,200 Montana workers, or 2.2% of the workforce, received hourly wages less than $8.65 per hour in 2019 and are likely to receive higher wages due to the 2020 minimum wage increase. However, some will probably lose their jobs.

 Government enforced minimum wages have become increasingly popular under the theory that it improves the standard of living for low-income wage earners and shores up local economies. This year 24 states are instituting minimum wage increases that are higher than the federal minimum wage of $7.21.

Seven or eight states are pushing $15 or $16 minimum wages, and there is a push – primarily from unions – to set the federal minimum wage at $15 – an action that many economists are saying would result in the loss of almost four million jobs, primarily entry level and part time positions.

Seattle and California are reporting a plethora of restaurant closures following the implementation of their latest minimum wage increase to $15.75 an hour.

Critics of the concept of minimum wages universally point to a mountain of studies that demonstrate that while a minimum wage increase may help some workers, there are usually many more who suffer job losses. The jobs that are lost usually impact, most severally, those most in need of the opportunities and basic training commonly found in lower paying jobs. Many are part-time jobs.

Some of the negative impacts of forced minimum wages are likely being mitigated by the fact that the market place for labor in many areas of the country is pushing wages higher than the minimums. The bottom 25 percent of wage earners have seen an increase of seven percent in wages.

Recent job numbers indicated that nationwide there are currently 7 million unfilled jobs.

Interestingly, Director of National Economic Council Larry Kudlow has predicted that the minimum wage is headed – naturally — to $15 to $20 an hour due to the reality of market forces and the rise of  prosperity of the country.

Montana’s minimum wage is determined by taking the current minimum wage of $8.50 and increasing it by the CPI-U increase from August of 2018 to August 2019. The CPI-U increased by 1.75% over the year ending August 2019. To keep the minimum wage at the same purchasing power as the prior year, the wage should increase by $0.148 per hour. The resulting wage is $8.648 and statute specifies that the wage must be rounded to the nearest 5 cents.