Montana's minimum wage will increase to $8.65 on January 1

Governor Steve Bullock recently announced Montanans earning minimum wage will see the rate increase to $8.65 per hour beginning January 1, 2020.

“This increase ensures Montanans earning the minimum wage don’t fall further behind, but we still have work to do to make a living wage a reality for all Montanans,” Governor Bullock said. “Montana has the sixth fastest wage growth in the nation over the past decade, and we must build on this trend by continuing to create good-paying jobs, supporting Montana businesses, standing up for employees who negotiate for better pay, and increasing opportunities to pursue education or in-demand skills.”

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 and Industry (DLI) to adjust the Montana minimum wage for inflation using the Consumer Price Index for Urban Consumers (CPI-U).

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. In 2018, the industry with the largest number of workers earning minimum wage was the accommodations and food services industry followed by the retail trade industry.

The 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.

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.