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Montana Is First State To Cancel Unemployment Benefits In Response To Unprecedented Worker Shortage

BY TYLER DURDEN

Three weeks ago, when looking at the unprecedented labor shortage that is crippling the US economy (even with some 100 million Americans not in the labor force) we said that there is a simple reason for this paradoxical phenomenon: trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.

Consider the following striking anecdotes from Bloomberg:

  • Early in the Covid-19 pandemic, Melissa Anderson laid off all three full-time employees of her jewelry-making company, Silver Chest Creations in Burkesville, Ky. She tried to rehire one of them in September and another in January as business recovered, but they refused to come back, she says. “They’re not looking for work.”
  • Sierra Pacific Industries, which manufactures doors, windows, and millwork, is so desperate to fill openings that it’s offering hiring bonuses of up to $1,500 at its factories in California, Washington, and Wisconsin. In rural Northern California, the Red Bluff Job Training Center is trying to lure young people with extra-large pizzas in the hope that some who stop by can be persuaded to fill out a job application. “We’re trying to get inside their head and help them find employment. Businesses would be so eager to train them,” says Kathy Garcia, the business services and marketing manager. “There are absolutely no job seekers.”

Even more amazing: a stunning 91% of small businesses surveyed by the NFIB said they had few or no qualified applicants for job openings in the past three months, tied for the third highest since that question was added to the NFIB survey in 1993.

But what is most striking is the context on these figures: recall that just one year ago, the unemployment rate was a depression-era 14.8%. And while it has since dropped to 6%, it remains well above the 3.5% rate of February 2020, before the pandemic. So judging from the jobless rate – which the Federal Reserve tracks closely – there’s still plenty of slack in the labor market.

Only… if one goes by the complete lack of workers, there isn’t.

This was confirmed by the results of the latest, April, NFIB Small Business survey, which found that a record 42% of companies reported job openings that could not be filled.

The key quote from NFIB Chief Economist Bill Dunkelberg was “Main Street is doing better as state and local restrictions are eased, but finding qualified labour is a critical issue for small businesses nationwide.” And the explicit admission that BIden’s “trillions” in stimulus are behind this predicament:

“Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force.”

As if it wasn’t clear, the NFIB added that “finding eligible workers to fill open positions will become increasingly difficult for small business owners.”

Seven percent of owners cited labor costs as their top business problem and 24% said that labor quality was their top business problem. Finding eligible workers to fill open positions will become increasingly difficult for small business owners.

Illinois-based Portillo’s Hot Dogs LLC boosted hourly wages in markets including Arizona, Michigan and Florida, and is offering $250 hiring bonuses. The chain has hired social-media influencers and built a van called the “beef bus” to help recruit. Still, many of the chain’s 63 restaurants remain understaffed, said Jodi Roeske, Portillo’s vice president of talent.

We are absolutely struggling to get people to even show up for interviews,” Ms. Roeske said.

To be sure, it’s not just entry level places that can’t find workers: full-service and high-end restaurants like Wolfgang Puck’s Spago Beverly Hills, where servers can earn $100,000 a year with tips, also are struggling to recruit workers. Puck said in an interview with the WSJ that expanded unemployment benefits and new options like personal chef gigs are contributing to staffing shortages at Spago and his other restaurants.

“I don’t think we should pay people to stay home and not work if there are jobs available,” he said.

Summarizing the data, Rabobank’s Michael Every wrote that Biden’s generous unemployment benefits are “ironically helping to push up wages, at least temporarily – which I am sure nobody intended, but underlines just how radical policy has to get in the US to make it happen.” His conclusion: ”the problem is that small businesses trying to get past Covid are least well placed to lead this socio-economic charge; and if this points to a wage-price spiral –which is still unlikely– then the bond market will soon be pointing its finger at the Fed.”

Well if it is unemployment benefits that is causing the labor shortage why not do away with said benefits?

Of course, that is far easier said than done: once Americans are used to collecting money for doing nothing, they would be extremely displeased – to put it mildly – once the money is gone. This is not lost on politicians who know that they would be the immediate target of popular ire.

And yet, one state is taking the much needed, if extremely unpopular step, of breaking this addition to stimmy handouts which has also led to this historic labor shortage.

According to Yahoo, Montana plans to stop some of its federally-funded unemployment benefits to address “the state’s severe workforce shortage,” according to its labor department, which will leave many out-of-work residents without any support at all.

“Nearly every sector in our economy faces a labor shortage,” Governor Greg Gianforte, a Republican, said in a statement on Tuesday, echoing what we said last month, namely that “The vast expansion of federal unemployment benefits is now doing more harm than good.”

Instead, the state will do the correct thing and begin offering return-to-work bonuses to help employers looking to hire.

Starting June 27, Montanans will lose access to the extra $300 in weekly unemployment benefits but maintain their regular benefits. Contractors, gig workers, and others will also lose access to the Pandemic Unemployment Assistance (PUA) program, meaning those workers won’t get any benefits.

Those relying on the DOL’s Pandemic Emergency Unemployment Compensation (PEUC) program, which gives additional weeks of unemployment benefits to workers, will stop receiving benefits. The state also plans to reinstate the requirement that stipulates workers must be actively searching for a job to qualify for unemployment benefits.

Predictably, the decision sparked howls of outrage from those already habituated to Biden’s Universal Basic Income regime:

“Montana’s move to end these fully federally-funded UI programs, along with their COVID-19 exceptions, is cruel, ill-informed, and disproportionately harms Black and Indigenous People of Color and women,” Alexa Tapia, unemployment insurance campaign coordinator at the National Employment Law Project, told Yahoo Money, basically slamming the decision as both racist and sexist. “Ending these programs would leave 22,459 people unable to support their families and hurt thousands more.”

Alternatively, those 22,459 people can find a job.

Montana’s unemployment rate was 3.8% in March, down from its 11.9% pandemic peak in April 2020, according to data by the Labor Department.

The federally-funded unemployment programs run through September 6 nationwide. Montana’s cancellation would cost workers at least $3,000 per worker in supplement benefits if they couldn’t find work through the program expiration. Workers on PUA and PEUC would lose at least $4,500 in benefits because they no longer will be eligible for the base unemployment benefit.

Liberal economists were also outrage, claiming that Universal Basic Income is a wonderful creation (it hasn’t worked out that great in any socialist nation where it has become a staple of social welfare, but whatever), with studies from such liberal bastions as the National Bureau of Economic Research all the way to Yale University claiming that the extra $600 in benefits distributed earlier in the pandemic had limited labor supply effects and likely didn’t disincentivize work. (narrator: they disincentivize work, just see Wolfgang Puck’s quote above).

“The 100% federally-paid unemployment benefits have boosted spending and contributed to the strong economic recovery,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “It’s shortsighted for the state to sacrifice that economic stimulus based on the anecdotal labor shortages concerns of a few employers, especially given the limited evidence of work disincentives from unemployment pay during the pandemic.”

What he forgot to mention is that the artificial spending created by stimulus has led to soaring prices and out of control “transitory” inflation, which will lower the standard of living for everyone, not just those on the government’s dole, but again anything that goes contrary to the liberal mantra of “bigger government is always better” is anathema and must be crushed immediately.

So far, Montana is the first and only state to fully opt out of the federal unemployment benefit programs enacted in the pandemic and currently extended by the American Rescue Plan signed into law in March. As a way to incentivize workers to return to work, the state is offering a one-time return-to-work payment of $1,200, using money from the American Rescue Plan to fund the program. Only those who complete four weeks of work would receive the payment.

“Incentives matter,” Gianforte said. “Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work.”

One can only hope that more states follow Gianforte’s extremely unpopular, if extremely prudent decision, before the US is mired in 1970s style hyperinflation.

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22 COMMENTS

  1. When Whacko Jacko’s new Maori only Governance comes to NZ will Maori still be able to apply for a benefit from the oppressing Whitey or will they have to go see Silly Willy for the Maori only Koha ??

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  2. This is not new. Back in the early 1990s I was running a factory and needed staff. No skills other than turn up on time, sober and follow instructions. We had never ending problems getting staff. The losers sent from the social welfare office were clearly turning up because they had been told to do so, and if you made the mistake of offering them a job, you would regret it.
    One Iredell was honest and said he would be getting less money if he got the job. I can’t remember the amount, but it was a definite loss, on top of the costs of coming to work, the joys of shift work, no sleep in, etc. I admired his honesty. We were paying the then award rate of $7.49 per hour, and I was earning $27k per year as a production manager.

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    • Worth noting that the minimum wage in Montana is incredibly low.

      ……”The Montana minimum wage increased in 2020 and is currently set at $8.65, which is $1.40 higher than the federal minimum wage rate of $7.25 per hour.”……

      https://squareup.com/us/en/townsquare/guide-to-montana-minimum-wage

      The above article gives the benefit at $300 (presumably per week). As such it is the same GROSS amount a minimum wage earner would receive for a 35 hour week. If as in NZ 30 hours is considered fulltime employment you wouldn’t need a masters degree in maths to find reasons to stay in bed!

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      • True all that but in the last couple of weeks we advertised a job.
        Oaying somewhere 20.-22. We do the training, there is no one with our particular skills so looking for a learner.
        So, 18 replies, none with a cv of any kind, most with blocked FB pages, arranged 5 interviews, I actually turned up.
        We have employed that person but it will be a while before that person adapts to the task. Noce person but not worked for a while even though only19.

        Anther young staff is becoming an issue. might not work for us for much longer. Becoming difficult to manage. With the new fair work bullshit she would be a prime candidate for their employment. sooner that we move her off I’d say the better.
        Grew up with the SHIT, in the Hutt Valley.
        The Law is there to look after people now so its just funding for the Labour Party but also very disruptive.
        Bring back the contracts Act if that fair work stuff ever gets put in place.

        If it does I will rent my building and stop work. Someoen else can put up with their crap. Can’t be bothered and the new product that I will be making can get made somewhere where people appreciate the money they get paid.
        the 70’s all over again.

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  3. Heres an idea to inspire motivation for the derilects on the jobseeker but our mong govt is too woketarded to do it…

    Anyone on jobseeker bene longer then say 6mths have to attend AND pass the an army style boot camp or the intake course.
    This would have many layers of benifit to the individual and society/taxpayer.
    1, discipline and routine/structure for the dat
    2, self worth and confidence
    3, would be a good detox for many
    4, job/career choice at the end
    5, alot cheaper then a lifetime on the dole or going to prison.
    6, fitness and health improvements prepared to go into the workplace.

    Many more benifits but those are the main standouts, as further motivation any that are still on the bene 12mnths later have to redo the course.

    I would also advocate that young offenders of serious crime or continual petty crime be sent to s boot camp, it would be far more beneficial to their life outcomes and far cheaper then sending them to jail.

    Now cue the screaming outraged rabid lefties…

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      • No bene if you dont complete the course plain and simple.

        Id have no problems with them getting paid the dole while they attend, hell add a hundy or so per week as incentive but no attendance/no completion then no benefit.

        Its both a punitive and incentive measure. Perhaps maybe have an eligible age say 18-35?

        I get sick of hearing about scum cunts on jobseeker blatantly telling employers they dont want the job but its a requirement to apply to get the dole.

        If a bootcamp type thing isnt appealing then start adult education schools to upskill them, 9am-5pm monday to friday jobseeker recipients MUST attend untill theyre in employment and off the dole… they are after all at home jobless doing nothing all day so no excuse not to attend, would keep then off the bong/methpipe/bottle for at least a few hours.
        Once again no going to adult school then no bene.

        Im over politicians etc just putting a bandaid on the symptoms its about time the address root causes, lack of education and fatherless/single parent homes are a major factor in all our bad stats.

        Same for truancy, we need a hardline approach to it. Id rather spend 100k on a truant/disadvantaged teenage kid to set them up for life as a contributor to society then blow a million on them later in life via prison or benefits.
        Build a fence at the top of the cliff instead of ambo at the bottom.
        Financial incentive or punish parents of the truants, say more then x days per year absent the parents get a higher tax rate or reduced benefit, make the parents make sure their lil shitbags get to school instead of letting them do as they please and unknowingly ruin their lives

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          • You can deal with that in similar ways viking, take a more targeted approach of those hungry kids in need its easy enough for schools to record and the state pass on costs via wff or benefit reductions, in other words pay to feed your own kids or we deduct/cost recover it direct from any govt payments.

            I hate the idea of govt intrusion/ big brother on peoples lives but it does have its place when it comes to managing irresponsible/incapable people that burden society esp when it comes to shitting over their own childrens futures because of their own selfish poorly thought decisions.

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    • Hand Shandy Shane’s sole accomplishment for his time in Parliament was the roundabout at Waipapa north of Kerikeri. Definitely needed & will save a few lives but overall a poor return on the squillioins of dollars he sprayed around.

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  4. Jacques Attali was right:

    “In the future it will be a question of finding a way to reduce the population. We will start with the old, because as soon as it exceeds 60-65 years man lives longer than he produces and costs society dearly, then the weak and then the useless who do nothing for society because there will be more and more of them, and especially the stupid ones.

    Euthanasia targeting these groups; euthanasia will have to be an essential instrument of our future societies, in all cases. We cannot of course execute people or set up camps. We will get rid of them by making them believe it is for their own good.

    Too large a population, and for the most part unnecessary, is something economically too expensive. Socially, it is also much better for the human machine to come to an abrupt halt rather than gradually deteriorating. We won’t be able to run intelligence tests on millions and millions of people, you can imagine!

    We will find something or cause it, a pandemic that targets certain people, a real economic crisis or not, a virus that will affect the old or the fat, it doesn’t matter, the weak will succumb to it, the fearful and the stupid will believe it and ask to be treated.

    We will have taken care to have planned the treatment, a treatment that will be the solution.

    The selection of idiots will thus be done on its own: they will go to the slaughterhouse on their own.”

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  5. Great Post,
    Productivity has to be part of solution.
    There are far too many jobs based on counterproductive compliance and anti growth policy’s..
    Big government destroys both .productivity , entrepreneurs and the bright engineers needed for that growth.
    Personal responsibility is lost and that is the most important keystone of a healthy/ wealthy society.
    Won’t go on but thanks for the post!

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