1

Tester: Enhanced unemployment plays a role, but businesses need workers

Recent soft employment figures illustrate the importance of enhanced unemployment benefits and other programs within the American Rescue Plan, Sen. Jon Tester said during a stop in downtown Missoula last week.

But the proliferation of help wanted signs also punctuates the need to get people back to work, and ending enhanced unemployment could help businesses deal with what many are calling a critical shortage of workers.

“I think it’s important to get people back to work as soon as possible,” Tester said. “I know there’s a lot of businesses out there looking for people to go to work.”

The latest jobs report, released on Friday, found that only 226,000 jobs were added in April compared to the 1 million jobs most economists had forecast.

Some contend that enhanced unemployment benefits have kept people out of the labor force. Gov. Greg Gianforte has already tied the state’s labor shortage to federal unemployment benefits.

Last week, Montana joined South Carolina in ending its participation in the federal unemployment benefits program. The program has been replaced with a “return to work” bonus.

“Nearly every sector in our economy faces a labor shortage,” Gianforte said. “Incentives matter, and the vast expansion of federal unemployment benefits is now doing more harm than good.”

Tester said the program played an important role during the pandemic, but he didn’t disagree with efforts to get people back to work, even if that means ending enhanced unemployment.

Dozens of businesses across Missoula have help wanted signs posted in windows and doors, and some have upped their wages in an effort to get people hired.

“I think we got some unemployment numbers that weren’t nearly as good as they thought they could be,” Tester said. “Where the governor was at was not a bad position to be in, assuming that these businesses can rebound and we can continue to ensure they see more and more traffic.”

Daines also has cited the state’s labor shortage and the need to get workers back into the workforce. He called Gianforte’s decisions to opt out of enhanced unemployment “a great decision for Montana.” 

“We’re seeing small businesses put up ‘help wanted’ or ‘now hiring’ signs. We’re even seeing some Montana small businesses close because they can’t find enough workers to fill openings. Montanans can safely return to work and small businesses throughout Montana have plenty of job openings. ”

According to the Montana Department of Labor and Industry, the state’s unemployment rate of 3.8% is near pre-pandemic lows. But the labor force remains around 10,000 workers smaller than it was before the pandemic.

Montana was the first state to announce its plans to fully opt-out of the federal unemployment benefits program. South Carolina has since followed and Utah Republicans are looking to do the same.

The labor shortage also has hurt Montana contractors, who said there’s no shortage of available work.

“The number of applications at the beginning of this construction season are about half of what we have seen in previous seasons,” said Hal Fuglevand, VP-General Manager for Knife River. “At some of our locations, we will have trucks and equipment parked but no one to drive and operate them.”

Tester said other issues also need attention, including those that force workers into difficult choices on when they return to work.

“There’s some other big issues we’ll have to deal with, like childcare and housing,” Tester said. “We need to get folks the help for their businesses to expand, and even startup businesses.”