Thanks To Covid Stimulus, Employers Can’t Find Workers. Montana’s Governor Is Having None Of It

Montana governor Greg Gianforte has had enough of President Joe Biden’s covid relief bills. Instead of paying people to stay unemployed, he’s giving them a bonus for finding work.

After scrapping what he called the “impractical government mandates” imposed by former governor Steve Bullock in 2020, businesses in his state were still struggling.

We got rid of hours of operation, capacity limits. We got rid of our statewide mask mandate. We put lawsuit protection in place for businesses and nonprofits. And now, as we have opened up, employers can’t find workers. It’s across all industries. Restaurants are having to shut down for days because they can’t find cooks or wait staff.

Addressing the media, Gianforte said that because the federal government extended unemployment benefits due to the pandemic, people have incentives to stay home. In order to change that scenario and get Montanans back to work, he drew out a new plan.

We made the decision to opt out of the federal supplemental unemployment benefits, and replace it with a back-to-work bonus.

Now, he is offering anyone who gets off unemployment benefits and finds a job a $1,200 bonus.

This is going to help employers. And, honestly, there’s dignity in the work. And there’s also satisfaction in being self-sufficient. We made that decision yesterday. And we’re just getting a phenomenal response from our business community.

Isn’t that something! Who would have thought that forcefully locking down the country’s economy and then showering the unemployed with taxpayer-backed “free” money would produce anything but chaos?

While Gianforte’s plan isn’t ideal considering that government-backed incentives to get people back to work are unnecessary in a truly free market, his reasoning is correct. When you subsidize something, you always get more of it.

They Never Learn Their Lesson

In 2013, well into President Barack Obama’s second term, Congress extended long-term unemployment benefits. But the extension ended as 2014 rolled in. What we saw happen was a significant drop in the unemployment rate.

As Mises associate scholar Randall G. Holcombe explains in this article, when the government pays people to remain unemployed, what we get in return is more unemployment.

The long-term unemployment rate skyrocketed during the recession because we paid people to be unemployed longer.

Needless to say, this lesson was lost on our overlords. Thankfully for the people of Montana, their governor isn’t waiting for a total economic collapse to revert course.

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This article was published on May 7, 2021, and is reproduced with permission from the Ludwig von Mises Institute.