Five takeaways from the state’s annual Labor Day economy report

HELENA — The Montana Department of Labor and Industry’s annual Labor Day Report touts the strength of the state economy, saying Montana has added tens of thousands of jobs since the Great Recession ended in 2009.

In fact, state economists say, Montana has had enough job openings that worker supply is limiting employment growth, meaning workers benefit as the tight labor market drives wages up.

The 32-page report is loaded with charts and statistics, mainly compiled from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, and other federal agencies. Here are the key takeaways:

1. More jobs than workers

Over the past three years, the number of monthly job openings in Montana has climbed even as the number of workers added to employment rolls each month remains steady. State economists believe that’s an indication that it’s worker availability — not lack of employer interest in hiring — that’s presently the limiting factor on economic expansion in Montana.

“That can constrain growth over time,” said state economist Chris Bradley, adding that the Department of Labor and Industry has been talking about worker shortages for years.

Given that, Bradley said, the agency is focusing on apprenticeship programs and other workforce development efforts designed to increase the number of Montanans in the labor pool and help workers get the training to step into higher-skilled jobs.

“Available workers who were easily persuaded into the labor market through rising wages or more job opportunities have likely already entered the labor market,” the department writes. “Remaining workers likely have barriers to securing employment.”

2. Montana wages are up

Tight labor markets often force employers to boost wages in an effort to compete for employees, and Montana workers do appear to have benefited from that trend in recent years.

State economists say Montana led the nation in median household income growth between 2016 and 2017, with the median income figure rising 6.7% to $53,386. In addition to wages, that income figure includes earnings from business ownership and investments.

Montana has also seen long-term wage growth since the end of the recession in 2009. Average annual wages for Montana workers are up by 2.7%, or more than $10,000, the state says, citing data from the U.S. Bureau of Labor Statistics.

3. Uneven regional employment growth

While southwest Montana, including Bozeman, has seen 19% growth in the number of payroll jobs over the past decade, not all of Montana has been so fortunate.

Eastern Montana, for example, saw payroll employment spike to about 15% above a 2009 baseline in 2013 during the height of the Bakken Oil boom, but has since settled back down to just 1% growth. North-central Montana has seen negative job growth since 2009, with the state compilation of federal jobs data tallying a net loss of 640 jobs in the region.

4. Pockets of high unemployment remain 

Even with a long-running expansion and tight labor markets, portions of Montana still have stubbornly high unemployment rates. While the state as a whole has an unemployment rate below 4% — low enough that state economists call it a “constrained labor market situation” — unemployment rates tabulated for American Indian reservations are in many cases two or three times higher.

The Blackfeet Reservation, for example, posted a 10.8% unemployment rate in 2018. The Crow Reservation, where the state notes that unemployment has been driven up by coal industry layoffs, posted 14.2% unemployment.

“Our reservations are some of our most economically sensitive areas in the state,” said state economist Amy Watson.

The state, Watson said, is trying to do more to connect reservation residents to job opportunities. She also said that unemployment has trended down on reservations in recent years.

“They have seen some benefits of this long expansion as well,” she said.

5. One employment barrier: childcare access

Statewide, 83.4% of Montanans between the ages of 25 and 54 are counted as part of the labor force, which means they’re either employed or actively looking for work. That figure is 10 points higher for men, at 88.5%, than for women, at 77.6%.

Additionally, of Montanans surveyed about their reasons for not being part of the workforce, 10.6% cite being needed to take care of family. That nearly matches the 10.9% who say they aren’t working because they’re in school. In comparison, given the state’s older demographics, 60.4% of nonworkers say they’re retired.

A 2018 study Watson conducted at the Department of Labor and Industry estimated that licensed childcare facilities in Montana have capacity for only 40% of Montana kids younger than five. Additionally, she wrote, childcare — estimated to cost $8,000 a year for toddlers — can be so expensive that it pushes parents out of the workforce.

“It’s difficult to measure how many of these parents who aren’t working would like to be working,” Watson said this week.

Even so, she said, “We know there’s a big barrier.”

Future uncertain

Given that the post-2009 boom has been the longest economic expansion in recorded U.S. history, conventional economic wisdom suggests the nation may be due for a recession, and national markets provide some indications of economic storm clouds on the horizon. 

What industries such a downswing might hit hardest, and what it could mean for Montana, isn’t easy to predict, said Bradley, who nonetheless expressed optimism.

“We do have a good, strong, diverse economy that should be able to work through whatever recession effects there are,” he said.

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