Governor
Steve Bullock today announced Montanans earning minimum wage will see the rate
increase to $8.75 per hour beginning January 1, 2021.
"By
tying the minimum wage to inflation, we can ensure Montanans earning the
minimum wage see a modest increase and have the same buying power, instead of
falling further behind,”
Governor
Bullock said.
“We must continue to do more to help working families succeed
by bringing in quality jobs, supporting Montana businesses, and investing in
education and workforce training, especially as we continue to work toward
economic recovery due to the pandemic.”
In 2006 as
a private citizen, Bullock led ballot initiative I-156 to raise the minimum
wage and require that it be adjusted annually for inflation. Approved by
Montana voters, Montana Code Annotated 39-3-409 requires the Montana Department
of Labor & Industry to adjust the Montana minimum wage for inflation using
the Consumer Price Index for Urban Consumers (CPI-U).
An
estimated 8,000 to 10,000 Montana workers, or 2 percent of the workforce,
received hourly wages less than $8.75 per hour in 2020 and are likely to
receive higher wages due to the 2021 minimum wage increase. In 2019, the
industry with the largest number of workers earning minimum wage was the
accommodations and food services industry. Many minimum-wage workers are
front-line workers who are at the greatest risk of COVID-19 exposure.
The
minimum wage is determined by taking the current minimum wage of $8.65 and
increasing it by the CPI-U increase from August of 2019 to August 2020. The
CPI-U increased by 1.31% (unadjusted) over the year ending August 2020. To keep
the minimum wage at the same purchasing power as the prior year, the wage
should increase by $0.11 per hour. However, since state statute requires the
wage to rounded to the nearest 5 cents, the 2021 minimum wage rate will be
$8.75.
In 2020,
the District of Columbia and 29 U.S. states, including Montana, have minimum
wage rates that exceed the federal rate of $7.25 per hour. A map of state
minimum wage laws is available on the U.S. Department of Labor’s website at
http://www.dol.gov/whd/minwage/america.htm.
For more
information on minimum wage in Montana, visit DLI’s Research and Analysis
Bureau’s website at
http://lmi.mt.gov/Publications/minimum-wage-fact-sheet-3. Additional information can also
be found on DLI’s Labor Standard’s Bureau at
http://erd.dli.mt.gov/labor-standards.