Minimum wage hike stirs old debate

Bob Miller, who owns the Bear Claw Bar and Grill in McAllister, doesn’t mince words about the minimum wage hike that takes effect today, raising the minimum hourly wage in Montana from $6.90 to $7.25.

“It’s devastating to the service industry,” Miller said Thursday. “We’ve seen minimum wage go from $5.15 to $7.25 over the 24 last months.”

Employment experts agree that across Montana, the accommodations and food industry will be most affected by the federally mandated 35-cent minimum wage increase.

“That will probably be the industry most impacted by this change, at least in our community,” said Judy Callisto, director of the Bozeman Job Service.

Of the approximately 24,508 Montana workers making $7.25 or less last year, almost 40 percent worked in accommodations and food-service businesses, according to the Montana Department of Labor and Industry. About 20 percent worked in retail, the industry with the second highest number of minimum wage employees.

Among the almost 10,000 waiters and waitresses in Montana, about 46 percent were making $7.25 an hour or less last year.

But while waiters and waitresses have the lowest hourly wages in the state, earnings from tips make the jobs some of the most sought after, employment experts said.

“The food service people have so many walk-in people they don’t typically have to advertise,” Callisto said.

But she couldn’t say how many local restaurants are paying their wait staff minimum wage. Job services across the state recently received notices listing which employers that used the service paid less than $7.25 per hour.

“There were none in Bozeman,” Callisto said. “We thought, ‘Yee-haw.’”

But that could be because the minimum-wage-paying restaurants don’t use the job service, she said.

However, a regional breakdown of the percentage of workers making $7.25 an hour or less in 2008 showed the area including Gallatin, Park and Meager counties had one of the lowest percentages. County-specific figures weren’t available.

Miller said he has already felt the pain of minimum wage increases after Montana voters approved Constitutional Initiative 151 in 2006 .

The initial minimum wage increase from $5.15 to $6.15 cost him about $9,000 per year, he said, not including the increase in Social Security, Medicare and other taxes employers pay on wages.

He testified earlier this year in favor of a bill in the Montana Legislature that would have frozen the minimum wage for tipped employees,

He contends that the minimum wage increases, in combination with the downturn in Madison County’s economy, led him to close his dining room Monday through Thursday, he said.

“I’ve decreased my wait staff, decreased my services. But the bottom line is the money just isn’t there,” he said. “It’s not totally the minimum wage. The minimum wage increase happened the moment the bubble of Madison Valley popped.”

But state Rep. Franke Wilmer, D-Bozeman, who testified against the bill to freeze tipped employees’ wages, said Thursday that not all waiter jobs are created equal.

Tips “vary tremendously. That’s one of the problems, right? The difference of one kind of tipped employee to another,” she said.

Wilmer was a waitress for 14 years, “raising a child the whole time, most of that time getting no child support.”

While some wait staff are students with few expenses, others are moms and dads who need a living wage to raise their children and can’t depend entirely on tips left by customers.

“All kinds of costs can go up,” she said. “Food, transportation. There has to be a balance there.”

Daniel Person can be reached at dperson@dailychronicle.com or 582-2665.