How Montana Has Led the Nation and Sparked an Economic Comeback by Ending Federal Unemployment Expansions and Bonuses
A year after the COVID-19 pandemic first struck the nation, states were still struggling to get their economies back on track. Enhanced federal unemployment benefits—including the weekly $300 unemployment bonus—were starving businesses of the workers they needed to reopen and meet demand. In addition to the weekly bonus, these federal programs extended the duration of unemployment benefits to as long as 86 weeks and expanded eligibility to new groups of individuals. Unfortunately, these and other government benefits actually paid better than work in many cases.
Montana Governor Greg Gianforte was one of many state leaders faced with this challenge. In March, Montana had a record-high 35,000 open jobs that were sitting unfilled, even though wage growth was through the roof. And Big Sky Country had still not recovered the thousands of lost jobs as a result of the pandemic.
On May 4, 2021, Gov. Gianforte became the first governor in the nation to announce his intention to opt out of expanded federal unemployment benefits and bonuses in order to reverse the labor shortage and revitalize Montana’s economy. His decision set in motion a chain of events that eventually led to 25 other states following Montana’s lead by opting out of these failed federal benefit programs.
But equally important, Montana’s decision to opt out has set the stage for an incredible economic comeback that serves as a model for the nation.