Montana Governor Greg Gianforte announced Tuesday that the state will opt out of federal unemployment benefits amid a worker shortage. Specifically, Montana will no longer take part in the federal Pandemic Unemployment Assistance (PUA) program.
RELATED: Six Weeks Of Additional Unemployment Benefits Will Arrive Soon
Return to Work Bonus Due to Worker Shortage
By June 27, Montana will cease issuing supplemental $300 weekly PUA payments. In addition, the state government will no longer participate in the Mixed Earner Unemployment Compensation program.
Specifically, this program provided additional monetary benefits to Americans with both traditional W-2 income as well as self-employment income.
Instead, the state will use federal aid to bankroll a return-to-work bonus program. In particular, the bonus program incentivizes Montana workers if they get a new job.
If they manage to work for at least four weeks in the new job, individuals will receive a $1,200 bonus.
‘Montana Is Open For Business Again’
“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers. Nearly every sector in our economy faces a labor shortage,” the Republican governor said in a statement.
“Incentives matter and the vast expansion of federal unemployment benefits is now doing more harm than good. We need to incentivize Montanans to reenter the workforce.
Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work,” Gianforte added.
Worker Shortage In Many Industries
The governor cited a shortage of laborers in many industries in Montana. In particular, he mentioned the health care, construction, manufacturing, and hospitality, and leisure industries.
The worker shortage in these sectors became Gianforte’s main basis for the decision to extend back to work instead of unemployment bonuses.
In fact, State Commissioner of Labor and Industry Laurie Esau said Montana’s unemployment rate sits at 3.8%. This rate is already pre-pandemic numbers, although the workforce shrank by 10,000 workers.
Even outside Montana, restaurants and the rest of the hospitality industry struggled to fill vacant positions. Experts believe workers are reluctant to return to foodservice and hospitality due to many reasons, with health as the foremost one.
In addition, some believe that some workers are waiting out for higher wages before applying for jobs. Meanwhile, generous unemployment benefits, including the federal weekly stipend of $300, makes them comfortably afloat.
Earning More On Unemployment
Toby Malara of the American Staffing Association said that many workers aren’t rushing to get back to work. “We began to see that some employees were in a position where they were literally making four, five sometimes $6 an hour more” on unemployment insurance,” he said. “It did not make sense for them to go back to work.”
Gianforte agrees. He said the extra federal unemployment aid is currently “doing more harm than good” to local businesses. In addition, he agreed that additional payments serve as an incentive for people to stay at home, collect money and not look for jobs.
Labor Department ‘Disappointed’ In Montana’s Decision
Labor Secretary Marty Walsh expressed disappointment in Gianforte’s decision. This is according to a statement released by Labor Department spokesperson Michael Trupo.
“Choosing to eliminate these critical benefits will have the greatest impact on the most vulnerable,” Trupo said. He added that the move puts workers with a higher risk for COVID-19, or those who live with an at-risk family member, at a disadvantage. With Gianforte’s decision, they must now “make an impossible choice” between their health and their economic security.
Watch the KRTV News reporting that Montana will launch Return-to-Work bonuses and opt-out of federal unemployment benefits:
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