Montana Gov. Greg Gianforte announced on Tuesday that his state will be opting out of coronavirus-related federal unemployment benefits amid a “workforce shortage” in a variety of industries.
Starting on June 27, Montana will no longer “participate in the federal Pandemic Unemployment Assistance (PUA) program,” the state will stop “issuing supplemental $300 weekly payments,” and the government will no longer partake in the Mixed Earner Unemployment Compensation program, which offered additional money to those “who had both traditional W-2 income as well as self-employment income.”
The federal aid will instead be replaced with “a return-to-work bonus program,” which will give $1,200 payments to individuals who leave unemployment and work for at least four weeks.
SMALL BUSINESS OWNERS REPORT SHORTAGE OF WORKERS
“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,” Gianforte, a Republican, said in a statement.
“Incentives matter, and the vast expansion of federal unemployment benefits is now doing more harm than good,” he continued. “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.”
The governor cited a shortage of laborers “in the health care, construction, manufacturing, and hospitality and leisure industries” as the primary driver behind his decision. Commissioner of Labor and Industry Laurie Esau said the state’s unemployment rate sits at 3.8%, a pre-pandemic number, though the workforce “is some 10,000” employees smaller than before the virus reached the United States.
Throughout the country, restaurants and other hospitality industries have struggled to fill positions following closures and capacity restrictions that were brought about by the pandemic. Experts have posited a number of reasons that could account for the scarcity, including health concerns, a disincentive to return to work spurred by generous unemployment benefits, and laborers who may be waiting for higher-wage work.
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“We began to see that some employees were in a position where they were literally making four, five sometimes $6 an hour more on UI (unemployment insurance) with the pandemic bonus,” Toby Malara of the American Staffing Association told Business Insider. “It did not make sense for them to go back to work.”
