It appears we were overly cynical when we said just an hour ago that we won't be holding our breath to find out if any other state will join Montana in ending many unemployment benefits in response to the unprecedented worker shortage.
Just moments after we published that post, perhaps emboldened by the daring example set by his republicans peers in Montana, South Carolina Governor Henry McMaster today became the second state to end the people's addition to government handouts, and directed the S.C. Department of Employment and Workforce to terminate South Carolina’s participation in all federal, pandemic-related unemployment benefit programs, effective June 30, 2021.
Governor McMaster directed the agency to take the action in a letter to DEW Executive Director Dan Ellzey.
“South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived – both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors – now face an unprecedented labor shortage,” governor McMaster wrote.
“This labor shortage is being created in large part by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits. In many instances, these payments are greater than the worker’s previous pay checks. What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace.”
In a memo to Governor McMaster, Executive Director Ellzey outlined existing federal unemployment programs and what will change when the governor’s directive goes into effect on June 30.
Those programs include the following:
- Pandemic Unemployment Assistance (PUA)
- Pandemic Emergency Unemployment Compensation (PEUC)
- Federal Pandemic Unemployment Compensation (EPUC)
- Mixed Earners Unemployment Compensation (MEUC)
- Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations
- Temporary Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week
In conclusion, McMaster says that following termination of participation in these federal programs, DEW shall return to normal operation of the State’s unemployment insurance program, including enforcing the requirement that claimants demonstrate active efforts to seek employment in order to remain eligible for benefits.
In response, Dan Ellzey wrote that “at the current time, there are 81,684 open positions in the state of South Carolina. The hotel and food service industries have employee shortages that threaten their sustainability. However, no area of the economy has been spared from the pain of a labor shortage."
The Director of the S.C. Department of Employment and Workforce Director continued: “While the federal funds supported our unemployed workers during the peak of COVID-19, we fully agree that reemployment is the best recovery plan for South Carolinians and the economic health of the state. Last week’s initial claims numbers were the lowest since the pandemic began, and employers around the state are eager to hire and anxious to get South Carolina back to business.”
With 2 states down and 48 to go, or 49 - we are not sure if Washington D.C. is now officially part of the USSA - one can only hope that more states will follow in this example, although as with all things, we expect that the final breakdown will be by party lines with people in red states working and while people in blue state are paid to smoke pot and do nothing.
McMaster's full note below (pdf link):