By Eric Dietrich, Montana Free Press
HELENA — Gov. Greg Gianforte’s back-to-work bonus program, announced last year as he slashed expanded pandemic unemployment benefits, ultimately paid about a quarter of the bonuses the state originally funded , according to a new post-program report from the state Department of Labor and Industry.
The program paid $1,200 to workers who were on state unemployment rolls as of May 1, 2021 and then worked in new jobs for at least four weeks. He ultimately paid bonuses to 3,054 workers, spending $3.7 million of the state’s American Rescue Plan Act funding. The remainder of the program’s $15 million allocation will be returned to the pool available for other economic stimulus initiatives.
In a statement released Wednesday, the state Department of Labor said the report highlights the effectiveness of the program.
“Both workers and employers have benefited from the success of the program,” said Labor Commissioner Laurie Esau. “Today, just months after the program ended, more Montananese are working than ever before and Montana’s unemployment rate is at an all-time low.”
Montana’s seasonally adjusted unemployment rate of 2.5% in December is significantly lower than the national figure of 3.9% and well below the 4-6% range traditionally considered “full employment.” by economists. Tight labor markets mean it is generally difficult for employers to find workers, driving up wages and creating inflation as companies adjust prices accordingly.
The state’s workforce has grown in part because the state’s overall population has increased with immigration during the pandemic. Montana’s labor force participation rate, the percentage of civilian adults who are working or looking for work, remains about one percentage point below pre-pandemic levels, according to the U.S. Bureau of Labor Statistics. .
“The end of supplemental federal unemployment benefits and the offer of back-to-work bonuses have been effective and efficient tools to get Montanans back into the workforce,” said Gianforte publicist Brooke Stroyke, in an email. She also noted that the state has other initiatives aimed at strengthening Montana’s workforce, such as recruitment incentives for nurses and efforts to promote trades education.
In a presentation to a legislative committee Jan. 27, Labor Department chief economist Barb Wagner said that even with more workers in Montana’s workforce than ever before, businesses are still grappling with personnel problems, as almost all available workers are already working.
“Everyone who is going to work with a 40-hour work week is already in the labor market and already finding a job,” she said. “Everyone who’s not in the workforce right now has a pretty good reason – they’re looking after kids, they’re retired, maybe they’re in school.”
Wagner also said the lagging labor force participation rate appears to be driven by a decline in the participation of workers under 25, an age group where people are often in school. and the state’s aging population, which means more potential workers retiring. age.
When the back-to-work bonus program and expanded benefit cuts were announced last year, the Gianforte administration said it feared expanded pandemic-era unemployment benefits would discourage Montanese. unemployed to re-enter the labor market.
“The incentives are significant, and the vast expansion of federal unemployment benefits is now doing more harm than good,” Gianforte said in a statement at the time. “We need to get Montanans back into the workforce.”
The unemployment benefit program is essentially a state-administered insurance program that collects premiums from most employers and pays workers who have been laid off or whose hours have been reduced a portion of their former wages. Under longstanding rules, unemployment benefit recipients are required to actively seek work, but federal COVID relief legislation has given the state the ability to waive that requirement, increase weekly payments and to let workers remain unemployed beyond 13 weeks.
Gianforte, a Republican, was the nation’s first governor to announce the end of pandemic-era unemployment benefits. The move was criticized by Democrats, who expressed concern about inflicting pain on people who relied on the expanded aid.
The back-to-work program was a carrot designed to complement the stick of reduced unemployment benefits, providing one-time payments of $1,200 to workers leaving unemployment for stable jobs.
While the Labor Department report estimates that about 24,000 Montanese were receiving unemployment benefits and potentially eligible for bonuses, it has been clear for months that the back-to-work program would not attract the participation that officials from the State had initially provided for in the budget. They initially allocated $15 million to the program, enough to provide bonuses to more than 12,000 workers.
Instead, the ministry’s new report says 6,175 people applied for the program before the deadline last October. More than half of these applicants were rejected, either because they did not meet the eligibility criteria or because they had not provided the ministry with the necessary verification that they had maintained new jobs during the four weeks required.
The report indicates that administrative difficulties are partly responsible for the high refusal rate.
“The program was established with very specific eligibility criteria, which led to some confusion and difficulty in processing applications,” he says. “Additionally, the speed at which the program needed to be launched necessitated the adoption of labor-intensive practices. Without automated employment or eligibility verification systems, the employment verification process was cumbersome. »
The department wrote that “lessons learned” from the administration of back-to-work bonuses have since been applied to streamlining the administration of other efforts.
Bonuses were paid in 50 of Montana’s 56 counties, the department said. Yellowstone County, which includes Billings, had the most with 467, followed by Missoula County with 452.
The department also said bonus recipients generally seemed to earn more in new jobs than in previous ones. According to earnings listed on application documents, 60% of bonus recipients earn at least $15 per hour and 28% at least $20 per hour.
This story is published by Montana Free Press as part of the Long Streets Project, which explores Montana’s economy with in-depth reporting. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication about issues, trends, and values important to Montanans. Discuss MTFP’s Long Streets work with Senior Reporter Eric Dietrich at [email protected]