When the new year arrives, about 13,000 minimum wage workers in Montana will get a raise. Under a law passed by voters in 2006, the current minimum wage will go up by 15 cents, to $8.05 an hour, matching the increase in the Consumer Price Index.
While the increase puts more money in the pockets of low-wage workers, University of Montana Economist Patrick Barkey says it’ll have practically no effect on the state’s overall economy:
“Compared to everything else, from labor shortages, rising healthcare costs, a lot of other things, from a substantive point of view an increase in the minimum wage is not that large an issue simply because of its size,” Barkey says.
Barkey heads the University’s Bureau of Business and Economic Research. He says the real issue facing Montana’s economy is a stagnation in wages for the middle class. Barkey says most of the current wage growth is occurring in technology industries, which are not a major part of Montana’s economy.
He says wages in industries outside the technology sector are mostly flat:
“There’s a lot of workers who are not on the same fast track escalator up in terms of making money, that some of the workers in the newer industries are” Barkey says. “A lot of those newer industries aren’t in Montana, but this is a nationwide issue.”
The Montana Department of Labor estimates the minimum wage increase will affect nearly thirteen thousand workers across the state. For those who work full-time, the increase adds up to six dollars a week, before taxes.
