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Montana To End Boosted Unemployment Payments, Will Offer 'Return To Work' Bonus

A screen grab of Scott Eychner speaking at a podium.
Montana Public Affairs Network
Scott Eychner with the Montana Department of Labor and Industry briefs the Economic Stabilization and Transformation and Workforce Development Advisory Commission on a program providing $1,200 payments to residents who get a job after collecting unemployment benefits.

Republican Gov. Greg Gianforte announced Montana will stop providing additional unemployment benefits allowed during the coronavirus pandemic. This coincides with the state offering so-called return-to-work bonuses.

Gianforte says the measures are intended to incentivize Montanans to re-enter the job market amid a severe workforce shortage.

The governor’s office says Montana will opt out of providing enhanced unemployment benefits by July.

The state will also offer $1,200 payments to residents who were on unemployment as of May 4, and can subsequently show they accepted a job and worked for four weeks.

Scott Eychner with the Montana Department of Labor and Industry said the bonuses are designed to ease personal barriers to return to work.

“One of the things that this could do is provide some funding to help absolve some of those things. Child care being one of them. Could be transportation. Could be assistance with caring for an individual who’s in your home who’s sick,” Eychner says.

A commission of lawmakers and governor appointees approved the $15 million appropriation to cover the payments, which will come from federal coronavirus aid.

Eychner said the money will cover 12,500 unemployment claimants, just short of the 14,000 job openings the department is aware of in the Treasure State.

Montana State University labor economist Carly Urban said back-to-work bonuses could work like the earned income tax credit, which has been shown to grow the workforce.

“If you’re getting a tax credit or you’re getting paid more money, you’re more likely to work. I think that’s a very comparable policy,” Urban says.

Urban said it’s less clear how ending enhanced unemployment benefits will impact the labor market.

She said standard unemployment insurance hasn’t been shown to keep people from seeking jobs. But Urban said there hasn’t been as much research into enhanced pandemic-era benefits, which individuals are able to access for a longer period of time.

“I think it’s kind of a nice experimental setting to see what happens. And this is a super-charged experiment where we’re seeing what happens when you give people who are on unemployment more money, and you take off benefits. You’re giving kind of a carrot and a stick at the same time,” Urban says.

The state is expected to provide the payments through October.