South Carolina and Montana are declining federal unemployment funds, with their Republican governors stating the payments have created a workforce shortage.
ABC News reports that South Carolina and Montana will be the first two states to end their participation in unemployment enhancement programs, as the two states attempt to transition back into a pre-COVID unemployment insurance eligibility and benefits by the end of June. Residents of these states will be cut off from federal pandemic unemployment benefits this next month. Both South Carolina Governor Henry McMaster (R) and Montana Governor Greg Gianforte (R) announced this week that they will be withdrawing from the program to address the labor shortages plaguing both states.
Unemployment recipients will lose an extra $300 per week. “In many instances, these payments are greater than the worker’s previous paychecks,” Governor McMaster said in a statement. “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.” In July 2020 a study by the National Bureau of Economic Research found that two-thirds of laid-off workers were making more off unemployment than off normal wages. However, the number of Americans submitting unemployment claims has fallen to its lowest number since the pandemic began. This comes in light of the recent jobs reports in which 770,000 jobs were added in March, but only 266,000 jobs were added in April despite predictions closer to 1 million for the month.
Economists suggest the labor shortage is due to businesses offering too-low wages, and we aren’t seeing a quick enough growth in the wages offered. Governor Gianforte did say that a “return-to-work bonus” of $1,200 will be rewarded to those who join the labor force and maintain employment for at least one month. Since Republican politicians have long claimed federal unemployment payments are too high, it is likely that more GOP-led states may soon leave the unemployment enhancement programs among reports of labor shortages (Forbes).
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ARTICLE: JILLIAN WEIDNER
POLITICS EDITOR: CARSON CHOATE
PHOTO CREDITS: BEAUFORT COUNTY
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