Missoula city, county push to increase wages, but will the private sector follow?
When the city of Missoula’s new minimum wage law went into effect last year, it brought the hourly earnings of two non-union employees up to $15 an hour – nearly double the state’s minimum wage of $8.50 an hour.
As state lawmakers and local leaders search for ways to address Montana’s high housing costs, close the income gap and keep young people from leaving the state, wages will certainly play a role.
But setting a living wage that’s far and above Montanan’s minimum wage won’t be easy.
“I think a lot of us have an understanding of what a living wage is in concept,” said Barb Wagner, chief economist with the Montana Department of Commerce. “But when you start getting down to the details of it, you’re often asking yourself what is it that we think is required for a minimum standard of living.”
That’s where the conversation gets difficult, Wagner said. While many now consider their cellphone indispensable, should the cost of a data plan be included in a living wage calculation? What sort of car should one be expected to drive, so long as it runs? Are transportation costs included when a bus ride is free?
Wagner said there are no uniform statistics produced by the government to establish the foundation for a living wage. And the government has been reluctant to raise the minimum wage to anything close to a living wage.
A Montana legislative committee tabled the latest effort to establish a $15 minimum wage last week – a figure most would agree reflects a living wage.
“A living wage is a concept used by a lot of nonprofit groups, certainly, who are looking to improve the livelihoods of the working poor,” said Wagner. “We think people should be able to afford rent and child care, and afford food. But when you get into the details of what’s mandatory versus what’s a luxury, or something that’s not essential, there’s a lot of complications.”
According to the Living Wage Calculator, a living wage for a single adult in Missoula County stands at $11.48 an hour. For an adult with a child it’s $24.56. The Montana Department of Commerce sets $18.99 as a living wage in Missoula, at least when it comes to applying for certain business grants through the state.
Despite setbacks in the Legislature, efforts are underway to raise local wages, at least in local government. The Missoula City Council narrowly agreed to boost the minimum wage for non-union city employees to $12 an hour in 2016 and $15 in 2018, calling it a modest step toward achieving a living wage across the city.
Ginny Merriam, the city’s communications director, said two positions are now covered by that $15 minimum wage while the rest pay above that amount. Of the 529 full-time employees at the city, Merriam said, 272 are union workers and 257 are non-union.
Union pay scales are currently set above the city’s official minimum wage, she said.
Missoula County also is moving to raise wages for its lower-paying jobs, though commissioners say the process is slow and implicates the allocation of taxpayer money.
Dozens of entry-level jobs and training positions at the county pay less than $14 an hour, though many of the actual workers have seen their pay increase above that amount with time and experience.
“In certain positions, there might be a way for local government to be a trendsetter, if you will, and influence the local market for positions and the wages being paid to it,” said Commissioner Dave Strohmaier. “On the other side of that, the private sector is going to look at that and say, ‘I’ve got to sell my goods and services and turn a profit, and there’s no way I can provide that, even if local government is.’ ”
Like the city, the county supports the concept of a living wage, though establishing it takes time and costs money – money that comes from the taxpayers. Still, Commissioner Cola Rowley said, the county is working to close the wage gap.
“What you see across America is a wage gap, where we have people who are paid very well and people who are not paid very well,” Rowley said. “If you just give everyone a 2 percent raise, the gap keeps growing. We really try in our negotiation work to bring up the bottom and reduce that wage gap. It’s been slow going, but we’re really trying to bring up the bottom.”
National efforts to do the same have been hot and cold. The Pay Workers a Living Wage Act, introduced by a trio of Democrats including Sen. Bernie Sanders, sought to increase the federal minimum wage to $15 by 2020.
Supporters of such measures say taxpayers pay the ultimate cost of underpaid workers who enroll in public assistance programs at twice the rate of the overall workforce. More than half of all fast-food workers receive public assistance, which cost taxpayers $7 billion in 2013, according to the Labor Center at UC Berkeley.
If the minimum wage had risen at the same rate as inflation and productivity since 1968, it would currently stand at $26 per hour, according to Sanders’ bill. That would be a difficult, if not impossible, wage to meet for most Montana businesses.
“A living wage is hard to talk about because it’s really dependent on where you are,” said Chris Lounsbury, the county’s chief operating officer. “A living wage in Missoula is not the same as a living wage in Bozeman or New York, so what do you include in a living wage when you do that calculation?”
Lounsbury said the county does monitor its wages, salaries and benefits, and it regularly compares them against the local market. While the goal is to lead the way by raising pay for lower-earning workers, the county must also be careful not to out pay the local market.
“We do have market-comparable jobs where we compete, so I think we can drive some of that conversation,” Lounsbury said. “We don’t drive it in areas of technology or other things where we don’t necessarily have the same kind of positions.”
State law doesn’t give county commissioners the authority to direct pay in the private sector. The only way local government can raise wages is through its own hiring practices, and its appearance as an attractive place to work.
“Our one revenue source is property taxes,” said Rowley. “You have to think about striking some balance. We want to be a great employer, but we get that money from the public and we don’t want to be paying too far afield from what the market pays.”