Labor Day: Paid Leave Can Help Montana’s Worker Shortage

The Montana Department of Labor and Industry has released its 2015 Labor Day Report, an analysis of how wages and jobs fare in Montana and what trends mean for the economy. We wanted to take a moment to highlight why our economy is strong today, some of the challenges we face in the future, and why paid family leave is one responsible solution to combat these issues.

Since last year, Montana’s economy remained steady, with both wage and job growth. In the past five-years, wages overall have gone up for Montana workers. Since 2009, the statewide average wage grew by $5,100 ($33,762 to $38,874). Further, Montana currently experiences robust job growth and for the first time in state history, the total number of individuals employed has surpassed half a million. Today, almost 525,000 people are in the labor force and 96% of those are employed.

Yet, while our state economy flourishes now, a workforce shortage could hamper Montana’s businesses ability to find skilled workers, as more and more baby boomers reach retirement age. As a result, businesses and policy makers in the state need to consider ways to help increase the number of skilled workers entering the workforce. We believe paid family leave is a great tool to help businesses attract young workers and a way to help workers balance work and family to remain in the workforce.

What is causing Montana’s worker shortage?

Montana’s overall population is aging and as a result, more workers are retiring and leaving the workforce. Over the next ten years, at least 130,000 Montanans will retire, leaving a large amount of job openings. Yet, there are not enough young and skilled individuals positioned to move in and fill these vacant positions. In fact, only 123,000 people in Montana are between the ages of 16 and 24. Not all of these individuals will work or have the skills required.

Because of the worker shortage, there will be an imbalance between workers looking for jobs and businesses searching for employees, which can slow overall economic growth in the state. The Labor Day Report outlines the following solutions to help combat the negative effects of the worker shortage:

  • To encourage work activities despite the shortage, increase workers’ hours. Moving individuals into full-time employment increases labor force participation and could help close the shortage.
  • In order for economic growth to increase during this period, businesses need to be more productive.
  • Employers will struggle to find enough workers to produce their goods or employees with appropriate skills to do the job. Therefore, businesses need to adopt workplace policies that attract the skilled workers and encourage them to stick around for the long haul.

Paid Family Leave Supports Workers and Businesses

A paid family leave program would cover each of the above recommendations. It would encourage individuals working limited hours to work more, especially women. Female workers in Montana (and nationally) have lower labor force participation rates than men, often because women remain the primary caregivers in the home. If women in Montana had access to paid family leave, entering and remaining in the workforce becomes more viable.

Paid family leave can also boost employees’ morale and productivity, which impacts businesses’ bottom line. While access to affordable and quality education and professional development programs will be key to ensuring that Montana’s youth are ready for work, paid family leave is another solution that can increase productivity at work. In states that have enacted paid family leave programs, studies have found that when businesses provide supportive and flexible policies like paid family leave, workers are happier and their productivity levels increase.

Finally, businesses that provide paid family leave have an easier time recruiting and retaining skilled workers. Women that have left work altogether to care for children or family members are an ideal demographic for employers to attract during a worker shortage. These women have worked before, they are educated and trained in specific fields, and have the experience needed to do a job well. Paid family leave would enable these women to re-enter the work force, provide additional income for their households, and have the flexibility they need to continue to care for family members. Research even shows that paid family leave increases the likelihood that women who work but take time off for a newborn are more likely to return to the same employer.

Today our economy is strong, but literally tomorrow (beginning this year) we face a workforce shortage expected to last about ten years and slow our economic growth. Enacting a paid family leave program would support families, workers and businesses, and promises to combat the negative effects of this shortage.

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