Montana minimum wage set for biggest increase in years, due to inflation

Montana Department of Labor and Industry
Posted at 5:24 PM, Dec 28, 2021

HELENA — On Jan. 1, 2022, Montana’s minimum wage will make its biggest increase in years: rising 45 cents, from $8.75 to $9.20 an hour. That’s the most it’s grown in a single step since 2007.

In 2006, Montana voters approved Initiative 151, which increased the minimum wage by $1 and instituted an annual adjustment to account for inflation. Since then, the largest single increase has been 35 cents.

Montana Commissioner of Labor and Industry Laurie Esau confirmed this year’s increase in a September letter.

“The $0.45 increase in the minimum wage is higher than the increases in the last several years due to higher inflation,” she said in the letter.

Montana’s minimum wage is indexed to the federal Consumer Price Index. The state compares the CPI each August to the number 12 months earlier. If it’s higher, the minimum wage increases by the same percentage, rounded to the nearest five cents. If it’s lower, the minimum wage doesn’t change.

The CPI rose 5.25% from August 2020 to August 2021. That percentage of $8.75 was 46 cents, rounded down to 45.

According to the U.S. Bureau of Labor Statistics, a wide variety of items are more expensive than a year ago, contributing to the higher CPI. Gas and other energy prices, along with vehicle costs, are particularly driving the rising index.

The Montana Department of Labor and Industry estimates 9,680 people in the state earned the current minimum wage or less in 2020. Most of them worked in service occupations, particularly in restaurants and accommodations and in retail stores.

While this is the largest single jump in Montana’s minimum wage since 2007, it’s not the most it’s increased in a year. In 2009, it rose 35 cents in January, then another 35 cents in July, when the federal minimum wage was increased.

Montana Minimum Wage Changes since 2007, from Montana DLI:

Jan. 1, 2007: $6.15
Jan. 1, 2008: $6.25
July 24, 2008 (federal minimum wage increase): $6.55
Jan. 1, 2009: $6.90
July 24, 2009 (federal minimum wage increase): $7.25
Jan. 1, 2011: $7.35
Jan. 1, 2012: $7.65
Jan. 1, 2013: $7.80
Jan. 1, 2014: $7.90
Jan. 1, 2015: $8.05
Jan. 1, 2017: $8.15
Jan. 1, 2018: $8.30
Jan. 1, 2019: $8.50
Jan. 1, 2020: $8.65
Jan. 1, 2021: $8.75
Jan. 1, 2022: $9.20