McMaster requests end to federal pandemic unemployment benefit programs

CHARLESTON, S.C. (WCSC) - Gov. Henry McMaster is directing the S.C. Department of Employment and Workforce to end the state’s participation in all federal, pandemic-related unemployment benefit programs, effective June 30, 2021.

The governor said he took this action in order to address ongoing workforce shortages throughout South Carolina. McMaster directed the agency to take the action in a letter to DEW Executive Director Dan Ellzey, the governor’s office said.

“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,” McMaster wrote.

In a memo to 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

“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,” McMaster said. “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.”

Some business owners and people working the food and beverage industry have been hit hard by staff shortages. Some of them believe it is time to end these benefits.

Jeff Diehl, the director of operations for the Charleston Hospitality Group, said there haven’t been enough people wanting to re-enter the workforce because of the unemployment benefits.

“The incentive has been for people who need money who don’t have jobs, and there are now jobs to be had,” Diehl said. “The gross abuse of the benefit has now, I think, run its course. It is time for people to get back to work and there are plenty to work available.”

Michael Bessinger, the owner of Bessinger’s BBQ, said his labor force is down 35 to 40%.

He believes the end to these benefits will also help people get back to work.

There are people who say the end of unemployment benefits won’t bring people back to work, when they were underpaid to begin with. While Bessinger says that’s a real problem, there is no easy solution.

“I agree with the fact that our industry doesn’t pay enough, the problem is the customer is not going to pay what we need them to pay to give them a living wage in this town,” Bessinger said.

In a statement to Live 5 News, DEW Executive Director Dan Ellzey said,

“The S.C. Department of Employment and Workforce (DEW) received a directive from Gov. McMaster on a clear plan to accelerate our economy by transitioning individuals from unemployment to employment. As of claim week ending June 26, 2021, South Carolina will opt out of the federal unemployment programs that were available specifically for the pandemic.

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.

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.

Claimants should continue to certify each week and do their two work searches while they find employment.

As the agency works with individuals and employers, we will share any important information or instructions, as we have throughout the past 14 months.

We have notified the U.S. Department of Labor of our intention to opt out of these federal programs as of claim week ending June 26, 2021 to comply with the governor’s June 30, 2021 deadline.”