The Bigger Picture on Federal Unemployment Subsidies
Washington, DC, July 20, 2021
Tags: Jobs and Economic Growth
I’ve heard this comment more than a few times, even from people who should understand the bigger picture. It usually goes something like this:
“Gov. McMaster is hurting South Carolina because he stopped the extra unemployment dollars coming from the federal government.” Their rationale is often, “That’s just millions in ‘free’ federal money that now won’t be spent in our state.”
This way of thinking misses the mark on so many levels.
Several factors have been slowing our state’s economic recovery. Without question, one of those factors is the extra unemployment benefits from the federal government, which recently have been hurting more than helping. With the federal subsidy, many had been receiving more money on unemployment than they would have earned by returning to suitable work.
Nobody is opposed to the safety net of unemployment benefits, obviously. And yes, there are some people who legitimately cannot return to work right now and struggle with our state’s normal unemployment benefits. I get that.
But as a general statement – speaking to the overall benefit to our economy and those who call South Carolina home – it was time for the federal supplement to end. I strongly believe Gov. McMaster did the right thing here.
Data released last week from the SC Dept. of Employment & Workforce shows over 9,000 people returned to the South Carolina workforce just last month. It's good news, and I bet we’ll see that number grow as data from July and August becomes available.
Bottom line: we shouldn’t incentivize people not to work, make it difficult for businesses to find employees, hinder our economic recovery, and keep people on unemployment… just to keep the “millions in ‘free’ federal money” rolling in.