South Carolina was among the states that decided to cut the weekly federal unemployment benefits earlier than their initial end date in an effort to help local businesses with the labor shortage.
The announcement for the end of the federal help was announced on May, but the help was cut in June. But did this help?
The numbers show that Palmetto State is currently seeing higher number of open job positions compared to May when Gov. McMaster announced South Carolina will end the unemployment weekly help earlier than their end date.
According to the available data, South Carolina currently has around 107,000 open job positions which is 25,000 more compared to last May when South Carolina had 81,684 open job positions.
Despite the fact that numbers are showing no positive effect from cutting the federal weekly benefits earlier, the Department of Employment and Workforce claims these additional job vacancies show the decision to end the federal benefits was the right one.
“It’s a sign that the strategy did work,” SCDEW Executive Director Dan Ellzey said.
“You’ve got the economy firing on all cylinders. You’ve got people coming back to work — hundreds and hundreds of thousands have gone back to work in the state of South Carolina. So there is no doubt — there are many factors — but there is no doubt the elimination of the federal benefits did push people earlier to getting out and going back to their old jobs.”
Experts also believe that cutting the benefits earlier was the right move. One of them is Joey Von Nessen, University of South Carolina Research Economist, who claims that the numbers are not the only factor to compare and he thinks that the higher number of open job positions now is a result of the higher levels of demand, growing from pandemic shutdowns and shortfalls.
“We’re seeing more consumer spending, and we’re seeing a robust recovery for South Carolina, and that is very good news,” Von Nessen said.
He said the rise in the number of people working in South Carolina — from 2,277,505 in May to 2,307,087 in September, the latest data the state has made available — also supports that claim but is not the only factor.
“It’s really hard to tease out what the specific effects of ending the federal benefits were,” Von Nessen said. “But we know that it likely had a marginal effect, at minimum, because, as I mentioned, if we looked at workers who were earning less than $16 an hour before the pandemic, then they were better off financially staying on unemployment up through June, and so that financial calculus for those individuals changed beginning in July. So it likely had an impact in the low-wage sectors.”
While experts and state officials argue if cutting the federal weekly benefits was the right move, local businesses are still struggling with staffing shortage just ahead of the upcoming holiday season.