The Mountain West has become one of the nation’s fastest-growing regions, but the latest labor market data show that neighboring states are taking different paths and seeing different outcomes.
According to the U.S. Bureau of Labor Statistics, Wyoming posted the nation’s eighth-lowest unemployment rate in June at 3.2%, followed closely by Montana at 3.3%, tying for 11th. Idaho ranked 19th with a 3.7% unemployment rate, while Washington lagged at 5.2%, tying for the 47th worst unemployment rate in the nation. All four states share borders, natural resources, and growing populations, yet their labor markets tell different stories.
Many factors, including industry mix, labor force participation, population growth, state policies, and national economic conditions, influence unemployment rates. But they also provide an opportunity to examine how policymakers can help shape an environment where businesses are more likely to invest, expand, and hire.
Montana and Wyoming continue to demonstrate the value of maintaining competitive business climates. Both states have consistently ranked among the nation’s leaders in low unemployment while relying on diverse economies that include agriculture, energy, manufacturing, tourism, construction, and small business. Over the past several years, Montana has paired tax reform with investments in workforce development and initiatives designed to connect workers with employers. Through programs like 406 JOBS, the state has expanded career resources, strengthened employer partnerships, and promoted registered apprenticeships to help meet growing workforce demand.
Those efforts come at an important time. In announcing Montana’s June employment report, Governor Greg Gianforte noted that businesses continue to create good-paying jobs while more Montanans have opportunities to pursue meaningful careers. Labor Commissioner Sarah Swanson likewise emphasized that workforce initiatives are helping connect workers with training and career pathways that support the state’s long-term economic growth.
Idaho has followed a similar approach by prioritizing fiscally conservative budget policies combined with workforce development to facilitate economic growth. Through the Idaho Workforce Development Council, the state has expanded apprenticeships, invested in Career Technical Education, and partnered with employers to address workforce shortages in manufacturing, health care, construction, and technology. Idaho’s unemployment rate remains comfortably below the national average despite years of rapid population growth and one of the fastest-growing economies in the country. Idaho Governor Brad Little also recently announced that Idaho’s average hourly wage increased 4.7% in 2025, placing Idaho third nationally for percentage increase in mean wage.
Washington presents a different picture. Home to globally recognized companies in aerospace, software, and life sciences, Washington remains an economic powerhouse with one of the nation’s largest technology sectors. However, recent layoffs in technology and slower hiring in some urban industries have contributed to a higher unemployment rate than neighboring states. Washington’s economy illustrates that even states with innovative industries can face labor market challenges as economic conditions shift and poor fiscal policies impact the business climate.
For example, the Association of Washington Businesses (AWB) found through its recent employer survey that 44% of business owners were looking to move their primary residency out of the state due to “the state’s rising tax burden and other cost pressures continue to push a sharp decline in economic confidence.” Tod Leiweke, CEO of the Seattle Kraken NHL team, said about the Evergreen State’s business climate, “In my time, I have not felt as much fear in the business community as I feel today.”
The comparison highlights an important lesson: economic competitiveness depends on more than attracting businesses. Along with focusing on a competitive tax and regulatory structure, states must also ensure they have workers with the skills employers need. Across all four states, employers continue to report shortages in construction, health care, manufacturing, skilled trades, transportation, and energy. As experienced workers retire and demand for skilled labor continues to grow, workforce shortages are becoming one of the greatest constraints on economic expansion.
This is where policy can make a meaningful difference. Registered apprenticeships allow workers to earn a paycheck while gaining industry-recognized skills, helping employers develop talent tailored to their specific needs. Career and Technical Education exposes students to high-demand careers before they graduate from high school and provides practical pathways into industries that are essential to regional economies. Community colleges and technical schools help adults develop new skills or transition into growing occupations. Thoughtful reviews of occupational licensing requirements can reduce unnecessary barriers while maintaining appropriate protections for public health and safety.
Research consistently shows that businesses considering where to expand evaluate more than tax rates. They also look for a reliable workforce, efficient permitting processes, quality infrastructure, and a stable regulatory environment. The states that perform well over the long term are those that continually strengthen these fundamentals rather than relying on past success.
The latest unemployment rankings should not be viewed as a scoreboard declaring winners and losers. Rather, they provide an opportunity to ask what helps create resilient labor markets and what policies position states for sustained economic growth.
Montana, Wyoming, Idaho, and Washington each possess unique economic strengths, and each faces its own challenges. Yet the comparison makes one point clear: maintaining a competitive economy requires constant attention to workforce development, business investment, tax and regulatory restraint, and the policies that encourage innovation and 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.