Executive Summary

”More than half of public school students now have low-income families” – Slate[i]

“Income inequality affects every state and region in the country” – Economic Policy Institute[ii]

“A Growing Economic Recovery Bypasses Low-Wage Workers” – New York Times[iii]


When a full-time job no longer ensures that workers can make ends meet, it’s time for change. State policies too often trap low-income workers in poverty, rather than providing a foundation that allows them to thrive. In short, the system is rigged against workers.

Increasing wages, while vitally important, is only one piece of the equation. Workers’ lives are more than their hourly pay – debt, taxes, education, child care, and health care all contribute to families’ budgets and affect their ability to make ends meet.

When state policies allow some workers to be paid less than others, subsidize low-paying industries, put a higher tax burden on those who earn the least, increase the cost of education, do not allow workers to stay home when they or a child is sick, or deny access to health care, policymakers become complicit in a system that leaves many workers unable to provide for themselves and their families.

States across the country, including Montana, are failing workers with policies that hurt their chances of success rather than supporting their ability to thrive. Women and people of color, including Native workers, often feel the effects of these policies the most, with disproportionately low wages and high rates of poverty.

In this study, we rate states on 25 indicators in three categories: Jobs and Wages; Debt and Taxes; and Supporting Workers. The indicators include a combination of policies and outcomes, and each have a maximum score of 4 points. While the 25 indicators are not meant to be an exhaustive list of what it takes to ensure that workers can get by, they are an example of what states can do to help workers move to a place of financial stability.

Montana is failing its workers. With low wages compared to the cost of living, limited protection against losing all assets in bankruptcy, and lack of access to affordable health care, it can be impossible for workers to support themselves and their families. Rather than providing an environment where workers can thrive, policies in Montana make it even more difficult for workers to get ahead.

To truly support workers and their families so that they can make ends meet, Montana needs to:

  • Address the lack of living wage jobs and disproportionate share of workers of color in low-wage work by increasing the minimum wage;
  • Institute an Earned Income Tax Credit so that taxes do not overburden low-income families ; and
  • Expand Medicaid to cover adults up to 138 percent of the federal poverty level.




In February 2015, the Bureau of Labor Statistics announced that the economy added 257,000 jobs in January and the civilian labor force increased by over 700,000 workers that month.[iv] With headlines like “Jobs Report Confirms U.S. Recovery,”[v] and “Job Openings Surge to Highest Level since 2001,”[vi] many news outlets used the monthly jobs report to show just how well the United States is recovering from the recession of 2008.

Unfortunately, most workers have yet to see a true recovery and continue to struggle to make ends meet while state policies often serve to limit their ability to support themselves and their families.

States across the country, including Montana, are failing workers with policies that hurt workers’ chances of success rather than supporting their ability to thrive. Additionally, women and people of color – who are mostly Native Americans in Montana[vii] – often feel the effects of these policies the most, with disproportionately low wages and high rates of poverty.

In Montana, workers are falling behind as the minimum wage trails a living wage, the tax system overburdens low-income workers, and many workers do not have access to affordable health care. For workers to have a chance to become financially stable, policymakers must create an environment that is not only good for businesses’ bottom line, but good for workers and their families.



To assess how well states support workers, we look at three areas key to workers’ success: Jobs and Wages, Debt and Taxes, and Supports for Working Families. 25 indicators are divided evenly among these three categories (with one additional indicator under Jobs and Wages). Data comes from a wide variety of sources including the U.S. Department of Labor, the National Conference of State Legislatures, the Institute on Taxation and Economic Policy, the National Employment Law Project, and more.

Each indicator is either scored on a yes/no or sliding scale, with some scores as an average of several sub-indicators. The maximum score for any indicator is 4 points, and the minimum is 0 points.

Each section is scored individually, out ot total possible points for the section, and all sections together are combined to determine a final score out of 100 (or less for states without data for all indicators). Letter grades are assigned as follows: 90%+ = A, 80%+ = B, 70%+ = C, 60%+ = D, and less than 60% = F. Plusses and minuses are assigned based on dividing each grade range by three.

For more details on methods for calculating scores for individual indicators, see Technical Notes.


Findings and Discussion

In order to thrive, workers need good paying jobs that provide enough to pay the bills and put some money aside for savings and miscellaneous expenses; a fair tax system that does not overburden those who earn the least, protection from predatory debt and collections practices; and supports like access to health care and affordable college tuition.

When workers aren’t making ends meet, they often must scrimp on necessities and make painful tradeoffs just to scrape by. When states support workers and enable them to make ends meet, though, working families can give back to their communities by shopping in local businesses or having the time and ability to volunteer. Supporting workers helps families and communities thrive.

Montana is failing workers in Jobs and Wages, Debt and Taxes, and Supports for Working Families. In none of these areas does the state come close to adequately providing an environment where working families can succeed.

Jobs and Wages

One of the most visible areas where states can support workers is in access to high paying jobs. When workers earn low wages, they often must cut back on necessities so they can pay the bills. This is especially true for parents, who will sometimes eat only one meal a day so that their children have enough to eat. Others don’t take full doses of medication to make their prescriptions last longer, or put off paying a utility bill.

The state’s minimum wage often determines how well workers across the state are paid. In Montana, the minimum wage[viii] is only 56 percent of what a single adult needs to earn to make ends meet.[ix] While few workers earn exactly the minimum wage, the wage floor can also impact workers who earn above that minimum. As the Brookings Institute’s Hamilton Project notes, “Although relatively few workers report wages exactly equal to (or below) the minimum wage, a much larger share of workers in the United States earns wages near the minimum wage. ”[x] Additionally, though, the minimum wage indirectly affects workers with even higher wages as employers adjust their pay scales based on changes to the minimum wage.[xi]

However, 43 states allow some workers to earn less than the minimum wage.[xii] While Montana does not have a separate tipped minimum wage, workers who earn tips – like restaurant servers – are legally allowed to be paid less than other workers, and do not necessarily benefit from increases to the basic minimum wage. While employers are supposed to ensure that workers’ tips make up for the lower wage floor, in reality tipped workers are more likely to live in poverty than non-tipped workers.[xiii] This especially affects women and people of color, who are overrepresented in tipped occupations.[xiv]

Because the cost of living is not static, having the minimum wage tied to inflation or some other cost of living measure can help ensure that the minimum wage does not lose value over time. Montana’s minimum wage is tied to a cost of living adjustment, ensuring that minimum wage workers do not receive a pay cut each year.[xv]

Additionally, because some cities and counties have a higher cost of living than the rest of the state, it can make sense for local governments to set their own minimum wage higher than the state floor. As Paul Sonn of the National Employment Law Project noted in 2006, “Because of their broad coverage, citywide minimum wage laws offer local governments a valuable new policy tool for helping low-income workers and families in their communities.”[xvi]

However, many states preempt cities from implementing higher a higher local minimum wage than that set by the state.[1] [xvii] This restriction prevents cities from addressing income inequality locally, keeping the lowest-paid workers earning wages that may be far below what is needed to make ends meet in an area with a higher cost of living.

In addition to the minimum wage, though, the availability of high paying jobs also helps determine whether workers are able to provide for themselves and their families. In Montana, 49 percent of job openings pay less than a living wage, leaving many workers out of luck.[xviii]

One way states like Montana can influence the availability of high paying jobs (other than a strong wage floor) is through the companies and industries in which they invest. When a state provides tax subsidies for companies that provide few high paying jobs, workers do not see a strong benefit from the state’s investment. Unfortunately, most states, including Montana, do not even report on actual jobs and wages created for major subsidy programs, let alone require companies to meet specific jobs and wages thresholds.[xix]

Even if a state had addressed all of these issues, though, if unionization is limited by state policies, workers can still lose out on the wages and benefits they need to move beyond living paycheck to paycheck. Unions can help workers earn higher wages above the minimum wage, ensure access to benefits like paid sick time and health insurance, and prevent unfair firings. As Colin Gordon of the Economic Policy Institute notes, “There is a demonstrable wage premium for union workers. In addition, this wage premium is more pronounced for lesser skilled workers, and even spills over and benefits non-union workers.”[xx] When states limit the power of unions, such as through  “right to work” legislation, [xxi] both union and non-union workers can lose out. Montana does not currently have “right to work” legislation in place.

Of course, the real measure of whether states are supporting all workers is whether workers in the state are actually able to make ends meet, including women and people of color. When policies only work for men or for white workers, there is more work to be done by the state. Any state that only allows some citizens to flourish while keeping others in higher levels of poverty is not truly supporting workers’ ability to thrive. In Montana, only 502 percent of women earn enough for a single adult to get by, compared to 59 percent of men.[xxii] And, only 34 percent of workers of color earn that much, including only 33 percent of Native workers, leaving them less likely to be able to actually make ends meet.

MT table-1

Debt and Taxes

Workers’ ability to make ends meet does not only depend on their income; debt and taxes, which cut into total income, also affect whether or not workers can support themselves and their families. Most families in the United States hold some amount of debt;[xxiii] however, low-income workers hold a disproportionate share of debt[xxiv] and are deeply impacted by policies regarding predatory debt, hospital billing and collections, and bankruptcy. Additionally, while taxes are an important source of revenue that allow states to provide needed supports for workers and their families, when tax policies leave low-income workers paying more than those with high incomes and there are not sufficient tax credits to make up the difference, it can make it impossible to make ends meet.

When low-income families cannot face an emergency or other large expense, many turn to payday loans to cover the cost until their next paycheck. Unfortunately, payday loans come with fees and sky-high interest rates that leave families in a cycle of debt.[xxv] Additionally, payday lenders are eight times more likely to locate storefronts in communities of color, targeting low-wage workers there who are most vulnerable to the predatory lenders.[xxvi] Montana is one of only 16 states have annual percentage rate limits that effectively eliminate the payday loan debt trap.[xxvii] In states without such limits,[xxviii] low-income workers and communities of color are left at risk.

Low-income families are also more likely than those with higher incomes to find themselves subject to collections and to fall into bankruptcy. State policies can ensure that there are limits on hospital billing and collections so that they do not lead to further financial trouble. Additionally, protecting assets in debt and bankruptcy proceedings helps families from losing everything to bankruptcy and ending up in an insurmountable financial hole without the assets that could help them rebuild their lives. However, very few states provide strong protections of assets in bankruptcy,[xxix] and even fewer limit hospital billing and collections.[xxx] While Montana does protect some assets in bankruptcy, [xxxi] it does not limit hospital billing or collections. [xxxii]

In addition to debt and the collections and even bankruptcy that can follow, low-income workers are also often faced with a disproportionately high tax burden. When states rely heavily on sales and excise taxes rather than on an income tax, estate tax, property tax, or other taxes, it takes a toll on low-income families. Because low-income families contribute a disproportionate share of their income toward goods subject to sales tax, state reliance on this tax over-burdens those with the lowest incomes.[xxxiii] While Montana has no general sales tax,[xxxiv] 10.2 percent of total state revenue comes from sales and excise taxes.[xxxv]

Additionally, when overall tax rates are higher for those earning less than for those at the top, little is left over for working families to make ends meet. In Montana, the bottom 20 percent of earners pay 6.1 percent of their income toward state and local taxes, compared to 5.8 percent for the top 20 percent.[xxxvi]

In addition to more progressive income tax rates and less reliance on sale tax, targeted tax credits are another way states can lessen the burden of taxes on working families. State-level Earned Income Tax Credits and credits for child and dependent care help level the playing field for these families, but too few states provide these valuable credits. However, Montana does not have either type of credit, continuing to place a large tax burden on working families.[xxxvii]

Tax credits can also help would-be entrepreneurs, small business owners, and the employees who work for them. Two-thirds of low-wage workers are employed by large businesses with over 100 employees,[xxxviii] so tax credits can help small businesses that want to provide good wages compete with large low-wage corporations. However, many states do not provide any small business tax credits or other incentives for small businesses, leaving such small businesses struggling to compete. In Montana, while there are a number of tax incentives for businesses, there are none targeted toward small businesses.[xxxix]

MT table-2

Supports for Working Families

When there are not enough living wage jobs to go around and debt and taxes cut into low-wage workers’ incomes, state support systems are necessary for workers and their families to stay afloat. State investments can help ensure that workers have access to health care and can afford child care, and that workers and their families can attend college without taking on significant student debt. Additionally, policies that require employers to provide time off for workers give workers more stability in the workplace, while policies that provide training or assistance for potential entrepreneurs give workers expanded opportunities to get ahead.

Access to affordable health care can help lower the cost of living for workers and ensure that they and their families remain healthy. However, 22 states have yet to expand Medicaid eligibility to 138 percent of the poverty line.[xl] Lack of expansion denies nearly 5 million non-elderly adults affordable coverage and disproportionately affects people of color, with people of color making up more than half of those left in the coverage gap.[xli] In April 2015, Montana’s legislature passed the HELP Act, which will implement Medicaid expansion through a section 115 waiver.[xlii]

Access to affordable child care also lowers the cost of living for workers and allows them to work while knowing that their children are being cared for. While the U.S. Department of Health and Human Services recommends that states pay providers of subsidized child care at a high level relative to current market rates, most states fall well short of meeting that standard, including Montana.[2] [xliii] When states pay providers at rates much lower than current market rates, it provides little incentive for providers to accept subsidized children into their care. Further, providers who do accept subsidized children are left with lower earnings in an industry that is already very low wage. With fewer providers, low-income workers are less likely to find convenient subsidized child care, and may have to use providers with higher rates or cut back on work to care for their children.

Workers also need access to time off for illness for themselves or their family members. When employers do not voluntarily give time off, state regulations can ensure that workers have access to this needed benefit. The federal Family Medical Leave Act “entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.”[xliv] Many states have expanded access to leave beyond what federal regulations require. Montana has not expanded leave, denying many families the ability to take this important time off.[xlv] This especially affects women and workers of color, as retail and service jobs – where women and people of color are overrepresented – make up more than half of those businesses not subject to FMLA.[xlvi]

Another way that states can support workers and their families is through access to affordable higher education. While states once funded higher education at levels that allowed tuition to be within reach of most families, funding by states has dropped significantly in recent years, leaving students and their families to pay more in tuition.[xlvii] In fact, “student tuition now outweighs public funding at public colleges.”[xlviii] Because families of color and immigrant families are more likely to live in poverty,[xlix] [l] they are especially impacted by policies that create high tuition, that do not target grant aid toward those who need it most, and that base access to in-state tuition and aid on citizenship. For low-income families, paying for college without taking on student loan debt is impossible. While a degree may lead to a higher paying job, it can also saddle graduates and their families with debt payments for years to come. In Montana, state funding per FTE is less than tuition per FTE,[li] though need-based aid does make up more than 75 percent of all state grant aid.[lii] Additionally, though, the state does not have tuition equity legislation to allow undocumented immigrants to pay in-state tuition.[liii]

A final way that states can support workers is by giving them access to more opportunities, including starting their own small business. Self-Employment Assistance programs and the use of federal funds for small business and microenterprise training – and allowing small business and microenterprise to count as qualified work activities – give would-be entrepreneurs the ability to pursue new avenues for growth. While Montana does not have a Self-Employment Assistance program to help potential entrepreneurs start a small business,[liv] it does include small business and microenterprise development as eligible employment activities for Temporary Assistance for Needy Families (TANF).[lv] Providing a Self-Employment Assistance Program would not only expand the options for those who are unemployed or relying on government assistance to move forward; it would provide the chance for new and innovative businesses that might not otherwise be possible.




Montana, like many other states, is failing working families. Changes in policy can help the state enable workers to make ends meet and find a measure of financial security that too many families currently lack. Investments in Jobs and Wages, Debt and Taxes, and Supports for Working Families will build an environment in which all workers can thrive.

Jobs and Wages

Higher wages and access to good paying jobs with benefits are important to workers’ ability to support themselves and their families. While all of the measures in which Montana received low scores should be addressed to help increase the availability of good paying jobs, it is vitally important that the state address the fact that half of job openings pay less than a living wage, and that only 34 percent of workers of color earn a living wage. One way to help all workers is to increase the minimum wage, so that all jobs – including those currently low-paying jobs where people of color are overrepresented – are good paying jobs. Greater access to training, education, unionization, and benefits including time off will also help create greater wage equity, as will stronger protections against discrimination and targeted hiring that encourages employers to hire workers of color, including Native workers.

Debt and Taxes

Debt and taxes can take a significant chunk out of workers’ salaries, especially for low-income workers. Despite not having a sales tax, which is often what increases the tax burden for low-income families, the state’s tax system still puts a disproportionate burden on low-income families. Providing an Earned Income Tax Credit will help workers keep more of their paycheck. Having more money left over after taxes, in turn, can help those workers better provide for themselves and their families.

Supports for Working Families

The state should also invest in supports that help working families, including all measures in this section. Worker supports provide a strong foundation for working families to build from, enabling them to move to a place of financial stability. Increasing funding for higher education and offering solutions for student debt such as tax credits, refinancing, and college savings accounts could help make college affordable for more students and ensure that student debt does not inhibit graduates’ and their families’ ability to thrive.


Workers in Montana are struggling to make ends meet, and state policies are hurting rather than helping their efforts to get ahead. With low wages, a tax system that overburdens low-income workers, and not enough supports for workers and their families, the system is rigged against workers.

Rather than erecting barriers to workers’ ability to provide for themselves and their families, state policies should create an environment where all workers have the support they need to make ends meet. Instead, Montana is failing workers and communities across the state.



[1] There was insufficient information to determine whether Montana law currently allows local governments to implement minimum wage laws at a higher level than the state minimum wage at the time of this release, per communication with Paul Sonn of the National Employment Law Project.

[2] The U.S. Department of Health and Human Services recommends that states pay providers of subsidized child care at the 75th percentile of current market rates, based on market rate surveys completed by the state. According to analysis by the National Women’s Law Center, in 2014 only Oregon had subsidy rates based at the 75th percentile of a survey within the last two years. In Montana, subsidy rates are set at the 75th percentile of the 2009 market rate survey, falling well below federal guidelines.

[i] Weissmann, J. (2015). “More than half of U.S. public school students now have low-income families.” Slate.

[ii] Economic Policy Institute (2015). “Income inequality affects every state and region in the country.”

[iii] Swarns, R. (2014). “A growing economic recovery bypasses low-wage workers and their tables. The New York Times.

[iv] Bureau of Labor Statistics (2015). “Employment situation summary.”

[v] Mian, S. (2015). “Jobs report confirms U.S. recovery.” Zacks.

[vi] Udland, M. (2015). “Job openings surge to highest level since 2001.” Business Insider.

[vii] U.S. Census Bureau (2015). “State and county quick facts.”

[viii] U.S. Department of Labor (2015). “Minimum Wages for Tipped Employees.”

[ix] Analysis of Department of Labor data, based on Henry, B. & Fredericksen, A. (2014). “Families out of balance: How a living wage helps working families move from debt to stability.” Alliance for a Just Society.

[x] Kearney, M. & Harris, B. (2014). “The ‘ripple effect’ of a minimum wage increase on American workers. The Hamilton Project.

[xi] Shierholz, H. (2009). “Fix it and forget it: Index the minimum wage to growth in average wages.” Economic Policy Institute.

[xii] U.S. Department of Labor (2015). “Minimum Wages for Tipped Employees.”

[xiii] Allegretto, S. & Cooper, D. (2014). “Twenty-three years and still waiting for change: Why it’s time to give tipped workers the regular minimum wage.” Economic Policy Institute.

[xiv] Restaurant Opportunity Centers United (2014). “Recipe for Success: Abolish the subminimum wage to strengthen the restaurant industry.”

[xv] U.S. Department of Labor (2015). “Minimum wage laws in the states: January 1, 2015.”

[xvi] Sonn, P. (2006). “Citywide minimum wage laws: A new policy tool for local governments.” Brennan Center for Justice.

[xvii] Personal communication with Paul Sonn of the National Employment Law Project on February 5, 2015.

[xviii] Henry, B. & Fredericksen, A. (2015). “Low wage nation: Nearly half of new jobs don’t pay enough to make ends meet.” Alliance for a Just Society.

[xix] Mattera, P., Cafcas, T., McIlvaine, L., Tarczynska, K., Bird, E., & LeRoy, G. (2014). “Show us the subsidized jobs: An evaluation of state government online disclosure of economic development subsidy awards and outcomes.” Good Jobs First.

[xx] Gordon, C. (2012). “Union decline and rising inequality in two charts.” Economic Policy Institute.

[xxi] National Conference of State Legislatures. “Right-to-work resources.”

[xxii] Henry, B., & Fredericksen, A. (2014). “Equity in the balance: How a living wage would help women and people of color make ends meet.” Alliance for a Just Society.

[xxiii] Ratcliffe, C., Theodos, B., McKernan, S., Kalish, E., Chalekian, J., Guo, P., & Trepel, C. (2014). “Debt in America.” Urban Institute.

[xxiv] Henry, B. & Fredericksen, A. (2014). “Families out of balance: How a living wage helps working families move from debt to stability.” Alliance for a Just Society.

[xxv] Center for Responsible Lending. “Payday lending: How the debt trap catches borrowers.”

[xxvi] Montezemolo, S. (2013). “Payday lending abuses and predatory practices.” Center for Responsible Lending.

[xxvii] Ibid.

[xxviii] Ibid

[xxix] National Consumer Law Center (2013. “No fresh start: How states let debt collectors push families into poverty.”

[xxx] The Hilltop Institute. “Community benefit state law profiles comparison: State community benefit requirements and tax exemptions for nonprofit hospitals.”

[xxxi] Carter, C. & Hobbs, R. (2013). “No fresh start: How states let debt collectors push families into poverty.” National Consumer Law Center.

[xxxii] The Hilltop Institute. “Community benefit state law profiles comparison: State community benefit requirements and tax exemptions for nonprofit hospitals.”

[xxxiii] Institute on Taxation and Economic Policy (2015). “Who pays? A distributional analysis of tax systems in all 50 states.”

[xxxiv] State of Montana. “Sales tax.”

[xxxv] Institute on Taxation and Economic Policy (2015). “Who pays? A distributional analysis of tax systems in all 50 states.”

[xxxvi] Ibid.

[xxxvii] The Hatcher Group. “Tax credits for working families.”

[xxxviii] National Employment Law Project (2012). “Report: Profits soar for largest low-wage employers, while paychecks shrink.”

[xxxix] Montana Department of Revenue. “Corporate income tax incentives.”

[xl] Center on Budget and Policy Priorities (2015). “Health reform’s Medicaid expansion.”

[xli] Analysis of data from The Henry J. Kaiser Family Foundation (2013). “The impact of the coverage gap in states not expanding Medicaid by race and ethnicity.

[xlii] Montana Budget and Policy Center (2015). “The next steps for Medicaid expansion.”

[xliii] National Women’s Law Center (2014). “Turning the corner: State child care assistance policies 2014.”

[xliv] U.S. Department of Labor. “Family and Medical Leave Act.”

[xlv] National Partnership for Women & Families (2014). “Expecting better: A state-by-state analysis of laws that help new parents.”

[xlvi] U.S. Department of Labor. “Impact of family and medical leave on non-covered establishments.”

[xlvii] Mitchell, M., Palacios, V., & Leachman, M. (2014). “States are still funding higher education below pre-recession levels.” Center on Budget and Policy Priorities.

[xlviii] Chappell, B. (2015). “Student tuition now outweighs state funding and public colleges.” National Public Radio.

[xlix] The Henry J. Kaiser Family Foundation. “Poverty rate by race/ethnicity.”

[l] Center for Immigration Studies. “Immigrants in the United States: A profile of America’s foreign-born population.”

[li] State Higher Education Executive Officers (2014). “State higher education finance FY 2013.”

[lii] Personal communication with Tom Allison of Young Invincibles on February 16, 2015.

[liii] National Immigration Law Center (2015). Current state laws & policies on access to higher education for immigrants.”

[liv] U.S. Department of Labor. Self Employment Assistance Center: State Legislation.

[lv] Corporation for Enterprise Development (2015). “Assets & opportunity scorecard: State support for microenterprise.”

Montana Rigged to Fail Report

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