Montana’s minimum wage set to increase 10 cents to $8.75 an hour on Jan. 1

Montana’s minimum wage will increase $0.10 on Jan. 1, boosting the pay earned by roughly 10,000 state workers to $8.75 an hour, Gov. Steve Bullock said Friday.

Around 2% of Montana’s workforce received hourly wages of less than $8.75 an hour this year and should see their pay rise after the new wage rate takes effect next year.

“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,” Bullock said in a statement.

The minimum wage is determined by taking the current minimum wage, which is $8.65 an hour, and increasing it by the Consumer Price Index for Urban Consumers from August of 2019 to August 2020.

Bullock said the CPI-U increased by 1.31% 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 be rounded to the nearest 5 cents, the 2021 minimum wage rate will be $8.75.

“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,” Bullock said.

The accommodations and food industry was the single largest industry with workers earning minimum wage in 2019. Bullock said many minimum-wage workers are front-line workers who remain at the greatest risk of COVID-19 exposure.

In 2020, the District of Columbia and 29 states, including Montana, have minimum wage rates that exceed the federal rate of $7.25 per hour.