COLUMBIA, S.C. – Approximately 60,000 unemployed South Carolinians will no longer be eligible for any unemployment benefits starting Wednesday.
The South Carolina Department of Employment and Workforce says that includes both federal and state benefits.
South Carolina is one of more than 20 states rolling back federal unemployment benefits before the national September deadline.
Gov. Henry McMaster says his decision to do that is already starting to bring people back to work and shrinking the state labor shortage.
“We are hearing from businesses around the state that things are getting better, but we still have a ways to go,” McMaster said.
There are still tens of thousands of open jobs in the state, and SCDEW officials say there are thousands more open jobs than unemployed workers, an issue that has been causing a labor shortage for months and hitting some businesses hard.
Some experts say it is too early to tell if the move has already begun to affect the workforce as McMaster has claimed. They say we will know more in the next few weeks to months because like so many economic problems, there isn’t just one fix.
“If you were earning $16 an hour before the pandemic you were financially better off on unemployment and that’s no longer the case,” University of South Carolina Economist Joey Von Nessen said.
Von Nessen said the state was in a labor shortage before the pandemic began because of multiple factors including the retiring of the Baby Boomers, more people moving to South Carolina who have retired, declining birth rates and lowering immigration.
But like so many other things, COVID-19 made it worse.
“We saw a major decline in economic activity in 2020 and we are seeing the inverse of that, what I call ‘economic whiplash,’ in 2021,” Von Nessen said.
Businesses are trying to hire quickly to keep up with demand.
“They are very, very eager at the moment,” Assistant Executive Director of Employment Service Grey Parks said. “It’s like something I haven’t seen.”
But Von Nessen says while certain people may be coming back to work because of the end in federal benefits, in particular people who were making less than they would on federal unemployment at the rate of $16 per hour, more effort needs to be made to get workers into higher-paying jobs.
“Like construction and manufacturing where they average rate is about $30 an hour, in their case, they are going to need more focus on the job training and improving workers skills and that’s a different challenge than just bringing people off the sidelines,” Von Nessen said.
South Carolina Small Business Chamber of Commerce President Frank Knapp said he expects the economy to go back to normal sometime around the fall.
“The kids will be back in school, college kids will be back in town, mothers will be able to go back to work because they won’t be worrying about who is taking care of the children,” he said.
But some businesses, he says, may need to realize the workforce has changed.
“We know a lot of women dropped out of the workforce and haven’t come back for multiple reasons,” he said. “We know people that have been out of work have probably found something else to do.”
The Department of Labor and Workforce says nearly every industry is currently hiring. Many of them are trying to incentivize workers with more benefits or higher wages.