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Montana Governor Ends Additional Unemployment Payments, Citing Labor Shortage

HELENA, Mont. – Montana is ending its participation in the federal unemployment program that gives people additional weekly unemployment benefits as the state grapples with a labor shortage, Republican Gov. Greg Gianforte said on Tuesday.

Starting June 27, unemployed people in the state will no longer receive $ 300 in weekly additional benefits funded by the federal government until September 6.

The state will launch a new program to provide bonuses to unemployed people returning to work.

“Montana is open for business again, but I hear too many employers in our state who can’t find workers. Almost all sectors of our economy are facing a labor shortage, ”Gianforte said in a statement.

He said the additional federal unemployment benefits “do more harm than good,” echoing comments from some that the additional payments have caused people to stay home, collect the money and not. look for work.

US Secretary of Labor Marty Walsh was disappointed with Gianforte’s decision, according to a statement by US Department of Labor spokesman Michael Trupo.

“Choosing to eliminate these essential benefits will have the greatest impact on the most vulnerable,” Trupo said, adding that workers who are at higher risk of contracting Covid-19 or who live with a vulnerable family member should now “make an impossible choice.” »Between their health and their economic security.

The Labor Department has not seen evidence that improved unemployment benefits prevent people from working, Trupo said.

Montana unemployment recipients can get between $ 151 and $ 510 per week from the state program, meaning people claiming state unemployment benefits were receiving between $ 451 and $ 810 per week due to the federal boost.

The minimum wage in the state is $ 8.65 per hour, or $ 346 per week for a full-time job.

Under Montana’s new incentive program, workers who receive unemployment benefits can qualify for a one-time bonus of $ 1,200 after completing four weeks in their new job. The governor approved $ 15 million in funding for incentives from federal coronavirus aid allocated to the state.

There are about 25,000 people who file unemployment claims for payments in the state, according to the Montana Department of Labor. The ministry also estimates that there are around 14,000 vacancies.

Montana Governor Ends Additional Unemployment Payments, Citing Labor Shortage

The state’s unemployment rate fell to 3.8% last month, reaching pre-pandemic unemployment levels. Despite an influx of new residents to the state, Labor Commissioner Laurie Esau said the state’s workforce was 10,000 workers smaller than it was before the pandemic.

“Our labor shortage doesn’t just affect employers and business owners. Employees who are forced to work longer, serve more customers or take on more tasks have paid the price, ”Esau said in a statement.

A bipartisan advisory commission, made up of lawmakers and members of the executive board, unanimously approved the incentive package on Tuesday before the governor approved it.

The program will run until October and has funding to provide bonuses to as many as 12,500 workers.

Bonuses will be distributed on a first come, first served basis. Workers who quit their new job after receiving the bonus would not be eligible for unemployment benefits.

It is hoped that these rules would “act as an incentive to try to get people to use it quickly, in the right way, for a good job, something lasting,” said Scott Eychner, an administrator with the Ministry of Labor. .

Montana’s unemployment claims fell from a pre-pandemic average of around 10,000 per month to 85,000 in April of last year.

The federal government last spring approved $ 600 in additional weekly benefits for unemployed people receiving payments from their state’s unemployment programs. This benefit expired in July and was then replaced by the additional $ 300 weekly benefit.

In addition to ending participation in the unemployment benefit increase, Montana will also require unemployed people claiming benefits to actively seek work to qualify from the end of June, a requirement that was lifted at the start. of the pandemic. Several states have also announced that they will reinstate the job search requirement, including Vermont, New Hampshire and Arizona.

A 13-week limit on the length of eligibility for unemployment benefits that was waived during the pandemic will be reinstated. Self-employed workers and independent contractors were eligible for benefits under the Expanded Program, but will no longer be eligible for Montana unemployment benefits.

Several business owners released statements on Tuesday applauding the governor’s announcement, saying it would help them find employees.

“Finding employees has become our biggest challenge,” said Laura Carden, CFO of Wheat Montana Farms & Bakery in Three Forks.

Brad Griffin, president of the Montana Restaurant Association, called the announcement “a step in the right direction.”

But some have expressed skepticism about the move, saying it fails to address the underlying concerns that lead to unfilled jobs in the state, including rising housing costs and unsuccessful wages. not high enough to pay the bills.

Billy McWilliams, owner of an adult sex store in Bozeman, said he saw employees leave because of the rising cost of living. The policy change “does not solve the real problems we are facing,” he said.

In towns like Bozeman, where housing costs have skyrocketed during the pandemic, workers “can’t find jobs because those jobs don’t pay enough to pay their bills,” McWilliams said.

Samuels is a member of the Associated Press / Report for America Statehouse News Initiative corps. Report for America is a national, nonprofit service program that places reporters in local newsrooms to report on secret issues.

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