HELENA — Montana’s minimum wage workers get a small pay raise on New Year’s Day when an automatic cost-of-living increase takes effect.
Kaylee Feight, who works at a Helena Quiznos, said she has big plans for the extra 15 cents an hour. The 21-year-old recently moved from Hawaii and looks forward to owning her 10-year-old Pontiac in the free and clear.
“I’m going to pay off my car faster,” said Feight.
She said the increase, although small, is better than nothing.
“It doesn’t hurt to make more money,” she said during a break from making sandwiches for the state’s Capitol-area crowd.
Montana is among nine states with a scheduled increase in the minimum wage taking place on Tuesday. In Montana, it will go up from $7.65 to $7.80, meaning a full-time worker will make about $300 more in a year. More than 20,000 workers will be affected, the Department of Labor estimates.
Montana’s minimum wage goes up due to a ballot initiative approved by nearly three-fourths of voters in 2006. That law established annual cost-of-living increases.
Gov.-elect Steve Bullock helped lead the initiative effort prior to being elected attorney general in 2008. Bullock noted that it had failed in several previous legislative sessions amid concerns that the increase would kill the economy — an argument that Bullock said has been proven wrong since implementation.
“This law has served the state well,” Bullock said.
Department of Labor economist Aaron McNay said that some workers making a little more than minimum wage could also see pay increases as wage scales are adjusted upward from the bottom. He said most people who make minimum wage work in service sectors such as retail and restaurants.
But McNay said it is also possible that some workers will see hours or jobs cut as some employers try to keep payroll budgets intact.
“It is the trade-off of some lower-scaled workers seeing their wages increase, but that also means some lower-scale workers seeing their hours cut,” McNay said.
Labor advocates and groups are enthusiastic about the automatic wage increases.
“Low income working families are the most vulnerable to rising prices and the increasing cost of living,” said Al Ekblad, executive secretary of the Montana AFL-CIO. “Many of these workers hold two and three jobs and still can’t make ends meet. Annual increases in the minimum wage protect them from the loss of buying power.”