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Montana Defeats Attack on Minimum Wage, Cost-of-Living Increases for Working Families

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Recently conservatives in Montana sought to roll back the annual cost-of-living wage increases for minimum wage workers that voters overwhelmingly approved in 2006 by 73-27%. Montana is one of twenty-seven states (plus the District of Columbia) that has a minimum wage higher than the federal minimum wage, and one of eleven states that index the minimum wage to the consumer price index. Montana progressives successfully fought a conservative push by the restaurant industry to keep wages stagnant.

A bipartisan coalition in the Republican-led state Senate prevented the restaurant lobby from gutting future indexing of wages to inflation and freezing the minimum wage for tipped workers at $6.15/hour despite an increase to $6.90/hour which took effect on January 1, per the passage of the 2006 initiative. That proposed change would have cost minimum wage workers $1560 a year, far more than such workers would receive under the $400/person tax cuts from the federal stimulus bill. Fortunately, the general cost-of-living adjustment (COLA) was maintained in committee.

This action was then followed by a full Senate vote to defeat a bill (29 to 21) that would have essentially frozen wages for tipped employees by allowing employers to include tips in calculating the minimum wage they pay their workers. The wage freeze and tip inclusion in the minimum wage both would have placed tipped employees, such as restaurant servers, at a precarious disadvantage since tips can vary from day to day, and are even harder to rely on in an uncertain economy during which fewer people go out to eat. The failure of a conservative-led Senate in Montana to pass a minimum wage freeze is yet another demonstration of the.political unpopularity of efforts to cut away at the minimum wage.

Resources

National Employment Law Project, Montana Senate Rejects Minimum Wage Attacks
Progressive States: Indexing Minimum Wage
Economic Policy Institute - Securing the wage floor: Indexing would maintain the minimum wage's value and provide predictability to employers
US Department of Labor, Minimum Wage in the States