How Raising Minimum Wage Affects Montana - KFBB.com News, Sports and Weather

How Raising Minimum Wage Affects Montana

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President Obama made a big push to raise the minimum wage for federally contracted workers.

President Obama said last night he will sign an executive order that would raise the minimum wage for federally contracted employees from $7.25 per hour to $10.10 per hour.

White house officials say this will affect about 200,000 low-wage workers including food service workers in federal buildings, security guards, and construction workers.

Although this will only affect federal contracted workers. Montana state university economic professor, Carly Urban, says it could eventually affect local workers.

Urban said, "it may also increase the local labor market wages so if construction workers on a  federal project are getting paid more than other construction workers in the local market might also have a higher wage too."

In the past, the President has addressed raising the national federal minimum wage, but congress has not agreed. Urban says the idea of raising the minimum wage raises a lot of concerns. Urban said, "if we increase minimum wage then this is going to decrease employment so less people are going to be employed, unemployment rates among unskilled workers are going to be higher," and Urban says if this were to ever happen, it could impact people who make more than the minimum wage saying, "should the minimum wage get the same bump that other people get or how do we think about teacher wages as oppose to fast food works. Should they be increasing at the same rate?"

Steve Adams is the owner of Taco Time in Bozeman.  His new hires start at minimum wage. He says the minimum wage increase over the past couple years has been hard for his business.  He says, "leaves me very little room um to reward long-term employees. It makes it more difficult for me to justify hiring 14-15 year old people," and he hopes the minimum wage stays where it is for a while.  He said, "I fear that it be a trickily down effect just like most other things."

The federally contracted workers will not see the wage increase until 2015.

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