A bill to improve the lives of Montana’s lowest earning workers -- that’s what State Rep. Kelly Kortum (D-Bozeman) is aiming to do with House Bill 201.
The bill would raise the state’s minimum wage to $11.39 an hour, excluding the value of tips received by employees and special provisions for a training wage.
The increase would become effective on July 1 and would then be subject to a cost of living adjustment annually.
It is estimated that the legislation would impact over 68,700 Montana employees, which represents over 14% of the state’s payroll jobs.
Supporters included the Montana AFL-CIO, the Montana Federation of Public Employees, the Associated Students of the University of Montana, Operating Engineers Local 400, IBW 233, Big Sky 55+ and Ravalli Democratic Char Linda Schmitt, who was speaking in her personal capacity as a Corvallis resident.
Proponents say the bill will help lift people out of poverty and help the workforce shortage.
“It stands to reason that those workforce shortages exist simply because workers cannot afford to live and work in their communities for a wage that is simply just above the poverty line,” said Amanda Frickle, political director for the Montana AFL-CIO, at Thursday's House Business and Labor Committee hearing.
“Particularly in my demographics, students can’t afford to live (on minimum wage), particularly in Missoula,” said Ethan Hanley, representing the Associated Students of the University of Montana. “I know some of you may be wondering why there is a need for this bill, but I can guarantee you that students, whether it be through work study, on-campus employment or other employment in the community are still making under the $11.39 target that is being proposed in the bill today. Those students are struggling to afford basic necessities such as housing, food, etcetera.”
Opponents included the Montana Restaurant Association, Americans for Prosperity, the Montana Chamber of Commerce and the NFIB. They stated their concerns about the cost to small businesses and consumers.
“I will submit to you that the vast majority (of minimum wage workers) are working as servers in our restaurants,” said Brad Griffin, executive director of the Montana Restaurant Association. “And I agree, you can’t live on minimum wage, I totally agree with that. But the reason they work for minimum wage is they also make considerable tips. As I poll my various board members, I hear numbers from $20 an hour on up to $50 an hour in tips.”
“Quality of service can suffer as the incentive to excel on the job and earn more income based off merit and performance is removed,” said Wyatt LaPraim, legislative associate for Americans for Prosperity. “Why work harder or smarter when you’ve got a guaranteed minimum wage?”
Amy Watson, state economist with the Montana Department of Labor and Industry, served as an informational witness, saying there is no clear answer on whether raising the minimum wage would have a positive or negative impact on Montana’s economy.
“The data is mixed on the employment and inflation impacts. There are certainly offsetting costs here. So you see raising the minimum wage would certainly increase costs for businesses,” said Watson. “But then you have those workers who are earning more money and spending more money in their local economy. So those two, it depends essentially, in true economist fashion, on those. But (it) really isn’t clear in the data, the effect of raising the minimum wage.”
Watson said roughly 60% of jobs that would receive a pay bump are in the fields of accommodation, food service and retail trade. Numerous jobs in health care and education would also see pay increases. The most common occupations that would be impacted are cashiers, waiters, retail salespeople and bartenders.
Watson said in 2021, 64% of Montanans making under $11.39 an hour were women, 56% were 25 years or older, 48% were working full-time, 15% had less than a high school diploma, and 34% have a high school diploma or an equivalent but no college degrees.
Montana’s current minimum wage is $9.95 an hour and is raised annually based on inflation.
Last legislative session, Kortum sponsored a handful of bills that would raise the minimum wage, but they were all tabled.
“It just adds dignity to the folks that are doing this work, to not rely upon assistance and be paid a fair wage,” Kortum said when closing on the bill.