Return-to-work plan an innovative solution
With a flash of innovation, Gov. Greg Gianforte is flipping expanded pandemic jobless benefits into a mechanism to help alleviate the state’s critical labor shortage.
Beginning in late June, Montana will no longer issue supplemental $300 weekly unemployment payments subsidized by federal Covid relief dollars. Instead, the state will utilize those funds authorized by the American Rescue Plan Act to offer one-time $1,200 bonus checks to people who return to the workforce and stay on the job for at least four weeks. Once they get the check, they can’t refile for unemployment, making it a “one-way ticket” back to the job force.
Speaking with Fox Business News, Gianforte said the unemployment program is an important safety net, “but it shouldn’t be a permanent status.”
According to one economist with Bank of America, the $300-a-week jobless benefit, on top of state unemployment payments, mean that anyone earning less than $32,000 a year can potentially receive more income from unemployment aid than from their previous jobs.
“Honestly we got what we incented,” Gianforte said about continuing the Covid jobless benefits for too long. “We were incenting people not to work.”
The startling statistics back that up.
Statewide, there are some 14,000 open positions, with 25,000 people on unemployment. And according to the Governor’s Office, the state workforce is about 10,000 workers smaller than pre-pandemic levels, despite an influx of new residents.
A quick search on the online job board Indeed shows nearly 2,000 postings in the Flathead Valley alone.
Businesses across all sectors are scrambling to find workers, but the shortage is particularly acute for the service industry that is looking to ramp up for the summer tourism season.
“We have restaurants that are shutting down a couple days a week because they can’t find staff,” the governor said on Fox Business News. “If we don’t have the wait staff, hotel staff, cooks, carpenters we’re not going to be ready for all the visitors coming to Montana,” Gianforte stressed. “This is about being ready and getting all of Montana back to work.”
His plan is a creative solution that will likely have an immediate impact, and we imagine other states will follow Montana’s lead if the results pan out as we suspect they will.
But while this shot in the arm is just what business owners small and large ordered, it doesn’t address the underlying issues that continue to plague the local labor crunch: namely attainable housing, wages and childcare.
In fact, some of the governor’s actions this legislative session have made those matters worse, such as killing locally created affordable-housing programs in Bozeman and Whitefish — two cities that are feeling the pinch the most. Gianforte has said he’s big on incentives, and these programs did just that — enticing builders to help address the housing gap that directly affects the local labor pool.
Meanwhile, childcare costs continue to impede some parents who would like to rejoin the workforce, while wages broadly remain flat, according to the Federal Reserve.
Montana’s worker shortage won’t disappear with a single bonus check, and sooner or later the state will have to face the root causes of this issue.
The governor would be wise to once again tap into his proven business aptitude to lay out a bold and innovative vision addressing this challenge with long-term, sustainable solutions.