Despite the recent minimum wage increase raising the cost of doing business, some Missoula employers welcomed the 10 cents an hour raise for their workers.
“As a general rule, I’m very supportive of the increase,” said Dave Beaton, who owns four Taco del Sol locations in Missoula.
More than half of his roughly 50 employees will receive the boost, Beaton said, adding that, if anything, he would like to see minimum wage raised even more at a federal level.
“If the whole market will adjust, it helps because then you’re not left alone to be competitive and pay a higher wage,” he said.
The 10-cent bump went into effect Jan. 1 and brings Montana’s minimum wage up to $7.90 an hour, which is above the federal mandate of $7.25 an hour but below the highest paying state of Washington, where workers make at least $9.19.
This year’s increase amounts to an extra $192 per year for full-time Montana workers making minimum wage. Last year’s increase of 15 cents an hour tallied out at $300 more a year.
Montana law requires an annual minimum wage increase based on the U.S. City Average Consumer Price Index from August to August, said Casey Kyler-West, communications director for the state Department of Labor and Industry.
“One of the reasons it’s in place is so that people have at least a livable wage,” Kyler-West said.
Increases in pay also mean people have more discretionary income to spend in their communities.
“Really, what it gives them is more spending power,” she said.
The majority of Montana employers already pay more than the required base, Kyler-West said.
Based on 2012 numbers, 2.9 percent of Montana’s workforce made minimum wage, with the bulk of those 12,300 people employed as waitresses and waiters, she said.
Impacts from the current increase will be varied and it’s difficult to anticipate what effects will be in terms of hiring, Kyler-West said.
“Some businesses, depending on how much this impacts their overhead, they may have to increase the cost of their goods to make up that difference,” she said.
Beaton anticipates some adjustments will need to be made to absorb the increase at his Taco del Sols and said changes will be made accordingly when it becomes apparent which areas are impacted.
Most customers understand that businesses regularly face rising costs on several fronts, he said.
Any changes likely would come in pricing.
“I think most people have to adjust in the pricing somewhere in their products, but it’s not significant at all,” Beaton said.
Like Beaton, the Missoula Family YMCA considers the increase as a positive.
“Basically, we are very much in support of the minimum wage,” said Debbie Mitchell, the Y’s human resource director.
The increase melds nicely with the organization’s commitment to supporting low-income and working poor people, Mitchell said.
In anticipation of an increase, the YMCA budgeted ahead of time for a raise for the small number of employees affected, she said. “And we were almost exactly on the dot.”
Other changes, such as Affordable Care Act regulations, will have more of an impact on the budget than the minimum wage increase, Mitchell said.
“I think in all those cases we look at where we can raise costs if we have to,” she said, adding that the organization’s annual fundraising campaign helps offset rising prices.
For more information about how the increase stacks up, go to ourfactsyourfuture.org.