Montana’s Minimum Wage Should Be A Living Wage

This year, in order to keep pace with rising inflation, Montana is raising its state minimum wage from $8.75 to $9.20, the largest increase in a single year since 2007, according to KTVH. The wage increase is indexed, or adjusted automatically, yearly to the federal Consumer Price Index (CPI), matching the increase in minimum wage with the change in the CPI.  While this change will be beneficial to workers, it might not be enough due to skyrocketing housing prices and increased costs of goods in the rapidly growing state. 

In a state like Montana, the cost of living is simply too high for many workers, especially those who have to work low wage and minimum wage jobs. According to an analysis conducted by CNBC (https://www.cnbc.com/2021/02/21/15-minimum-wage-wont-cover-living-costs-for-many-americans.html) of various state’s minimum wages compared to the cost of living, the Montana minimum wage fell short of a living wage, only covering about 40% of the cost of living. According to the same analysis, a raise to $15 an hour would make up 115% of a living wage in Montana. 

On the other hand, it is important to consider that many businesses in Montana are locally owned and operated, and many would likely not be able to field a full staff and pay each employee a full $15 an hour wage. This leaves Montana in a very difficult spot in terms of how to handle its minimum wage that most other states don’t face due to the high number of locally - owned businesses. The state has a delicate balance to maintain between protecting its workers and ensuring that businesses aren’t burdened by a higher minimum wage.

One way the state could successfully work through this is to find a proper compromise between the needs of workers and the abilities of local businesses. By following the numbers in the CNBC analysis, a minimum wage increase to approximately $14 an hour would be enough to ensure proper and fair compensation to workers for their labor, which would still allow many businesses to function as normal and not be forced to make tough decisions regarding budgets and staff cuts.

To reach this point, the state of Montana should continue to index its minimum wage, but instead of doing so based on inflation, the index should be based on cost of living in Montana. The state should aggressively index it to meet the current needs, allowing businesses to adjust appropriately and then making adjustments after so that the minimum wage remains liveable. 

In a state like Montana with high costs of living and rapid population growth, it’s important that the work is done to ensure that workers and businesses alike are cared for. After all, it's these businesses and laborers who ensure the well being of the state’s economy and ways of life. It's time we provide workers with a living wage while making sure small businesses don’t have to make hard choices.