Report: Jobs outlook good, productivity down

HELENA — Montana is on track to recover the jobs lost during the recession later this year, but low productivity and an aging workforce could threaten future economic growth, state officials said Friday.

The Department of Labor and Industry's new Labor Day report predicts the state's unemployment rate, now at 5.3 percent, will continue to decline through the next year to between 4 and 5 percent. The national unemployment rate was 7.4 percent in July.

"This report makes it clear: Montana is in a position of strength," Gov. Steve Bullock said in presenting the report. "It's our responsibility to use this strength, though, to continue to bring new jobs to the state and increase wages for Montana's workers."

Despite the overall improvement, American Indians face a much higher unemployment rate, at 24 percent, and the seven reservations in the state have two or three times the rate of unemployment of their surrounding areas.

The state added 10,700 jobs last year, mostly in the private sector. The health care industry is a main driver, adding 7,000 relatively high-paying jobs since 2007 as more workers are needed to care for an aging population, the report said.

Public employment peaked in 2010 because of federal stimulus funding and hiring for the Census, but has since lost about 2,000 jobs in the state.

But those job losses are more than offset by the private-sector growth, and the number of jobs in the state is expected to reach its May 2008 peak later this year.

Montana has the fourth-highest number of high-school graduates in the labor force, at 96 percent, and 34 percent have a bachelor's degree. Despite that, worker productivity is lower than expected compared with other states with lower education levels, according to the report.

That's partly due to Montana being a rural state, and the relative difficulty in communicating and spreading technology compared with urban areas, report author Barbara Wagner said.

"There are a lot of things we could do to improve our productivity growth in Montana, and it's something we will have to be doing in the upcoming years in order to maintain our (gross domestic product) growth, given the tight labor markets," Wagner said.

Montana also has the highest level of workers 65 and older in the nation, at about 25 percent of the total labor force. That could create a shortage of workers as more people retire, and the state will need to make up for that shortage and increase productivity to keep the economy growing, the report said.

"Every sector of the economy is where we find these workers," Labor and Industry Commissioner Pam Bucy said. "We really need to engage younger workers. We need to make sure we have a higher workforce participation rate."