Labor Commissioner Sarah Swanson talks exploding construction sector, climate jobs and more
Labor Commissioner Sarah Swanson talks exploding construction sector, climate jobs and more
Plus: I'm producing a new bipartisan podcast on climate and energy policy!
Welcome to Big Sky Chat House— a newsletter of candid conversations with movers and shakers in Montana.
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Last August, Governor Gianforte appointed Sarah Swanson to lead Montana’s Department of Labor and Industry (DLI), following the abrupt resignation of her predecessor, Laurie Esau.
Originally from Glasgow, Swanson brings a range of valuable experience to the role: for nearly two decades she owned and managed (and eventually sold) Farm Equipment Sales, a four-store John Deere dealership headquartered in her hometown. Most recently, she served as Director of Strategic Engagement at DLI.
Swanson’s appointment to the head of the 800-person agency comes at a significant moment in Montana: the state’s huge post-pandemic job creation rush has slowed, although certain sectors like construction continue to grow. Furthermore, federal funding for energy, technology and infrastructure projects has fueled demand for new workers. At the same time, a lack of childcare resources, especially in rural parts of the state, has drastically impacted the workforce, and a changing climate could additionally alter the jobs landscape.
There’s lots of moving pieces at play, to put it mildly. Read on as Commissioner Swanson breaks down not just the state of the jobs market in Montana, but her priorities as commissioner and the challenges ahead.
Max: What’s the strangest thing you’ve ever seen at an equipment dealers’ convention?
Commissioner Sarah Swanson: (laughs) Well, tongue-in-cheek, the strangest thing I've ever seen at a equipment dealers’ convention was last year, after I had left being an equipment dealer.
I spent the better part of 20 years as an equipment dealer myself, and almost every time I went to those conferences, I was one of the only—if not the only—woman in the room.
Last year I was invited to go to Chicago, Illinois, to the Associated Equipment Distributors’ annual conference to accept an award on behalf of the Build Montana program that we originally piloted in Billings, which has now grown across the state.
While I was there, I stumbled upon a conference room that had 180 women in it. The sign on the door said “Women in the Equipment Industry.” I left that industry in 2018, and just five short years later there were just as many women at that conference as men.
That’s awesome. Switching gears a bit, is there a data point or a trend you’ve come across in your work that really jumps out to you?
What really jumps out to me is the incredible growth that we've seen in the construction industry. Our construction jobs in Montana grew by 8.3% in 2022, the second-fastest growth rate in the nation.
The average wage of construction workers in Montana—everyone from laborers to architects and engineers—is $65,000. It grew by 1.5% on an inflation-adjusted basis last year.
We project that we'll need 1,000 new construction workers per year, every single year in Montana, through 2032. That is the most of any industry in the state. That’s both the vertical and horizontal construction industry.
What do you mean by vertical and horizontal?
Horizontal is our roads, bridges, public infrastructure projects. Vertical construction is homes, buildings and the like.
Let’s zoom out a bit. Can you give me an overview of the jobs market in Montana, and explain why job creation has slowed recently?
We created 20,900 new jobs in 2022, the most of any year in state history. It was a little bit slower in 2023: we created 8,900 new jobs, and we continued to experience record low unemployment. Just over 5,000 Montanans received an unemployment payment last week, [which is] incredibly low compared to our population and our workforce.
At the end of 2023, the average wage for a Montanan was $56,000. We know that our nurses in Montana experienced a 20% direct wage increase in [the span of] 2022 and 2023 as the industry rebalanced coming out of the pandemic.
We also have a lot of large-scale research and business development projects coming to Montana, like VACOM’s announcement of a large-scale manufacturing plan in Lewistown and the Headwaters tech hub.
But you're right, the economic growth and number of jobs has slightly slowed. With tight labor markets the way that they are, we still do not have enough workers to fill every current job opening in Montana. In fact, we have approximately two jobs for every single unemployed person in Montana right now.
How does that rate compare to other states?
Our neighbors in North and South Dakota, Wyoming and Idaho are seeing similar trends. Nationwide, I don't have that [information] at my fingertips.
We're pretty certain one of the causes of the economic constriction right now is inflation, which reached a 40-year high in Montana in June 2022. But despite elevated levels of inflation, real wages in Montana have grown an average of 0.9% annually over the last three years.
Childcare is something that the Department of Labor and Industry is keenly interested in. Our economist team here [at DLI] has been able to identify that childcare shortages exist in every single county in Montana, with 67% of counties identified as childcare deserts—meaning supply meets less than 1/3 of the estimated demand. Most of that unmet demand occurs in the more rural areas of the state. There were six counties without a single licensed childcare provider at the time of this report.
[According to DLI’s analysis], there were approximately 68,000 Montana parents in 2022 that reported they were unable to fully engage in the workforce because of childcare shortages—they were either not working full-time or not working [at all].
What are a couple of your top goals right now, and what levers can you pull to accomplish them?
I've made three commitments to the governor and to the people of Montana. First and foremost is relationships, internal and external. The Department of Labor has had a lot of transition. I'm the seventh Commissioner in seven years.
I'm from rural, eastern Montana, and I would bet that a lot of employers have had a similar experience to me: knowing who to call in the Commissioner's office wasn't always the easiest. We [want to] make sure that employers and employees alike know how to get the services they need without getting lost in a state website.
The second commitment I've made is to our job service bureau. Put simply, it’s a series of seventeen offices spread out around Montana. It's often the only state agency in [some of the rural] communities.
Is it like indeed.com, but not on the internet?
We do post jobs for employers, but mostly we do direct recruiting. Maybe [an individual] just needs some help practicing for an interview or polishing a resume. We have teams that can help.
We can send our Montana registered apprenticeship team [to these offices], whether it's [to help] an employer or a potential employee. We had more active apprentices under the age of 25 in 2023 than ever before.
My third commitment is our unemployment insurance division: it's a safety net to provide economic resources during periods of short-term unemployment.
We launched a new software platform last October called MUSE, the Montana Unemployment Service Environment. You used to have to sit down and apply for benefits over the phone, and then wait for the staff to mail you lengthy documents that you would sign and mail back before you were eligible for benefits. Or you had to find a hardwired computer connection and a desktop computer and file on there.
The average time to apply through the new portal, which is available on cell phones and tablets, is between three and six minutes.
Have many jobs been created due to [President Biden’s clean energy bill] the Inflation Reduction Act or the Bipartisan Infrastructure Law?
It's really hard to pull out individual funding streams. It's a question I'm asking, too. It’s not only the [BIL] or the Infrastructure Reduction Act—there is an incredible trend right now of federal programs funding economic development activities in Montana. Every one of them has a heavy workforce component.
I'm talking about the federal CHIPS and Science Act that is funding regional tech hubs. I'm talking about the programs we're seeing from the Department of Energy to grow green energy or renewable sources that all have strong workforce components. The tremendous growth we're seeing in things like construction is absolutely tied to this federal funding for infrastructure and economic development.
We get data about total numbers of workers by industry and wages. There's just no way to suss out the source revenue for those wages.
It seems like the winter recreation industry really took a hit this year due to the mild weather. Recognizing that weather and climate aren’t the same thing, I’m curious for your perspective on the impact of climate on jobs in Montana; not just in winter but with wildfires affecting summer recreation, too.
What's interesting to me is that we actually didn't see a decline in workers or wages in our outdoor recreation fields this winter. We had just as many people employed.
I think a lot of the stakeholders in Montana that are doing this work with us have identified that there's probably going to be a change to the fire cycle, whether that's the number of employees or the way in which we fight fires.
If you look at some of the innovative investment opportunities in Montana, one of the leading projects right now is the Headwaters Hub. One of the identified sector strategies for the tech hub is innovation in fire science. Everyone recognizes that change is coming, but we don't necessarily have the answers of what those [changes] might be.
Teacher salaries in Montana are among the lowest in the country. Is there a lever your department can pull to make an impact there?
The lever that we’re pulling right now is economic analysis. We've been asked by the legislature and the governor's budget office to do a deep dive on [teachers’] wages and benefits across Montana. Teachers’ wages look very different in Libby versus Livingston versus Lame Deer, right? Every community, through their own locally negotiated [Collective Bargaining Agreements], is doing things differently.
Our policy makers, whether it's the governor's office or the legislators, they've tried several times in the last few sessions to address this, but they didn't have really good data at their fingertips.
We are just beginning to scope that project [in advance of the 2025 Legislature].
Before we wrap up, if you were given a magic wand and could make one change to the workforce in Montana, what would it be?
I think the one thing missing from the state workforce system is funding for rapid re-training or other credentialed programs. When we look at the Montanans that are either not working or not working above the poverty line, what's missing is not access to the programs—because job service and a number of other stakeholders can help connect them to programs—but the resources to pay for those programs.
Historically, there was federal funding, but over time we've seen those funding streams wane. We have to find a better way of connecting and paying for the programs for Montanans who want to skill up and enter the workforce.
This conversation has been edited for length and clarity.
One more thing…
Readers of this newsletter may know that I’m a big advocate of finding opportunities for bipartisan conversations around climate and energy policy…well, I’m excited to share that I recently started working with the stellar team at Latitude Media to do just that!
For the next year, I’ll be producing a podcast called Political Climate that aims to take listeners behind the scenes of climate and energy policy, both in DC and beyond.
The show’s three hosts bring deep experience and an insider perspective to the table (as well as a healthy dose of friendly shit-talking): Emily Domenech served as the senior energy advisor to Speaker Kevin McCarthy and Speaker Mike Johnson; Brandon Hurlbut served as Department of Energy Chief of Staff in the Obama Administration; moderator Julia Pyper is a leader in clean energy fintech.
The first episode drops on Friday, and you can listen to the trailer here! I’d be very pleased for your thoughts!