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Montana politics, elections and legislative news

Minimum Wage Increase: Boon To Montanans, Or Bust To Businesses?

Montana Legislature news
On Monday, business owners and labor industry representatives testified before lawmakers in Helena during the first hearing of a bill to increase the minimum wage in Montana.

On Monday, business owners and labor industry representatives testified before lawmakers in Helena during the first hearing of a bill to increase the minimum wage in Montana.

The current minimum wage rate is $8.15 an hour. Mary Ann Dunwell, a Democratic Representative from Helena, introduced the bill that would increase that wage to $10.10 an hour.

That would be higher than the minimum wage rate of any of the states bordering Montana.

“Raising the floor of the minimum wage would help local businesses keep employees," says Dunwell. "It would prevent employees from going across the street for another quarter or fifty cents an hour more. It also puts more money in works pocket. They’re going to be seeing that money in Montana, on Montana main streets, repairing washers and cars and circulating that money through the local economy.”

Dunwell pitched her bill during the House of Representatives Business and Labor committee.

Montana’s current minimum wage is tied to inflation rates and on January first of this year it increased ten cents.

But Dunwell and her bill’s supporters say that isn’t enough to keep Montanans earning a living wage.

Linda Beischel lives in Helena and testified in support of Dunwell’s bill.

“There is dignity in human work, and it should be respected, that if you work hard, full time, you should be able to support a family and not have to beg for it," Beischel says. "If it is a job worth doing, it is a job worth compensating fairly.”

Others in support of the bill say a minimum wage increase could help Montana become a more attractive place for people to work.

Galen Hollenbaugh with Montana’s Department of Labor and Industry says the state needs to find solutions for what he calls a “severe worker shortage,” looming as Montana’s workforce ages.

“This begins to represent, over the next ten years, something that could really really impact, in a very negative manner our economy," Hollenbaugh says. "First, we need to increase the skills of our workers. But, secondly we need to increase the wages.”

Opponents to the bill don’t see an increase to minimum wage helping families or the businesses they work for.

Bridger Mahlum with the Montana Chamber of Commerce says the proposal would hurt the state’s business owners, and have unintended consequences for the employees the legislation is supposed to help.

“Businesses are going to react in the following ways, when a minimum wage is increased through the legislature, it’s going to reduce worker hours, reduce employees benefits, increase the price of goods or services sold, which in many cases could price out the low wage earner," Mahlum says. "It could lay off the low skill workers and it some businesses could just stop hiring. They might be able to stay where they are, but those with the smallest margins, those new businesses that are just getting started, having to impose a new minimum wage by about a 20 percent increase is going to make it really difficult for them to survive.”

Ken Beachy, owner of the Cozy Corner Cafe in Fairfield, also testified against the bill. He says if lawmakers want to improve the business environment in the state, they should look at ways to lift regulatory burdens.

“So that it would encourage more business in Montana," Beachy says. "If the minimum wage increases, I cannot give my other employees an increase I would like to give because it drains the business.”

Beachy and others testified that if lawmakers increase the state minimum wage it could force employers to bump up the pay for their other employees, so their pay remains comparable, and that may not be something businesses they can afford to do.

A representative of the Montana Retail Association told lawmakers during testimony that the state’s economic engine just isn’t strong enough to take on a minimum wage increase like the one outlined in the proposed bill.

During the hearing others, including Republican lawmakers on the House Business and Labor committee, questioned the government's role in setting wage rates between private businesses and their employees.

The proposal to add nearly $2 to Montana’s minimum wage is the second effort to do so by Representative Mary Ann Dunwell. Her previous bill failed during the last legislative session.

Corin Cates-Carney manages MTPR’s daily and long-term news projects. After spending more than five years living and reporting across Western and Central Montana, he became news director in early 2020.
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