Montana’s economy is in a stronger position than many states, but the latest Labor Day Report from the Montana Department of Labor and Industry should not be read as a victory lap. It should be read as a challenge.
Governor Greg Gianforte highlighted these findings while promoting his administration’s 406 JOBS initiative, which focuses on registered apprenticeships, work-based learning, occupational licensing reform, rural health workforce development, and connecting more Montanans with education and employment opportunities. The Governor explained that, “Wages are at record highs, our labor force is growing, and the unemployment rate is at near record lows while we remain committed to making it easier for Montanans to train, work, and build a meaningful career.”
Those efforts are a useful starting point, but the report makes clear that Montana’s next challenge is bigger than creating jobs: it is ensuring that more people have the skills, child care, flexibility, and support necessary to take them.
The numbers are encouraging. Montana’s economy grew by 2.2% in 2025 and has expanded at an annual rate of 3.5% since 2022, ranking eighth-fastest in the nation. Worker productivity increased 3% last year, and per capita income reached $72,340. Since 2022, Montana’s real wages have grown by an average of 1.6% annually — the second-fastest rate in the country.
These are not signs of an economy standing still. They show that Montana remains an attractive place to work, invest, and build a business. But strong economic growth only matters if Montanans can access its opportunities.
Montana’s labor force reached more than 577,800 people in 2025, yet total employment declined by roughly 1,400 jobs. The unemployment rate increased from 3.0% to 3.3%. While that still ranked Montana ninth-lowest among states, it represents the highest annual unemployment level since 2021. Montana’s July 2026 rate was 3.2%.
The takeaway from this is that the labor market may be moving from a period of extreme worker scarcity toward a more balanced, and potentially more competitive, environment. That shift should change how policymakers think about workforce development.
For years, Montana employers struggled to find enough workers. Today, the challenge is increasingly about whether workers have the skills, flexibility, transportation, child care, and other support necessary to take advantage of available jobs. A strong economy cannot reach its full potential when people are willing to work but unable to participate.
The child care data makes that point especially clear. On average, 23,500 Montana parents were unable to participate in the labor force because of family responsibilities or a lack of child care. Another 34,800 parents were underemployed or working reduced hours. Together, more than 58,000 parents were not able to fully engage in the workforce, which is equivalent to 6% of Montana’s labor force.
That is not merely a family issue. It is an economic issue.
Four in ten Montana businesses report difficulty recruiting or retaining employees because of inadequate child care, while 31% say child care challenges have prevented business growth. More than 62% report a shortage of child care in their communities.
If Montana wants to grow its workforce, it must take these barriers seriously. The state does not need to solve every problem through a new government program, but it should remove unnecessary obstacles, encourage flexible work arrangements, support private-sector solutions, and make it easier for parents to remain connected to employment.
The report also shows why Montana should focus on expanding pathways into work instead of relying solely on traditional four-year degrees. Health care added more than 1,200 jobs in 2025, while administrative services grew 4.3%, the fastest rate among industries. These opportunities require different combinations of education, training, experience, and credentials.
That is why initiatives such as the state’s 406 JOBS effort matter. Registered apprenticeships, work-based learning, industry-recognized credentials, rural health workforce development, occupational licensing reform, and stronger connections between public assistance and employment can help more people move into careers that actually exist in Montana’s economy.
The goal should not be to push every worker through the same system. It should be to create more doors into the workforce.
Montana’s economic performance gives policymakers something valuable: room to be ambitious. With 4,500 new businesses created in 2025, real wages rising faster than inflation for the third consecutive year, and growth ranking among the nation’s best, the state has a strong foundation.
But foundations are not finished buildings.
The next phase of Montana’s economic success should focus on participation: helping more parents work, more rural communities access opportunity, more people earn industry-recognized credentials, and more employers find the workers they need.
Another tool Montana can use to provide job opportunities is to continue its impressive tax reforms. Economic modeling shows that moving to a flat income tax rate in the Treasure State could result in more than 2,400 additional full-time jobs.
Montana’s economy has momentum. Smart workforce and tax policies can help ensure that momentum becomes a lasting opportunity.
Emily Strasburg is a Policy Analyst for the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Washington and Wyoming. Online at mountainstatespolicy.org.