Montana, South Carolina Opting Out of COVID Unemployment Programs

Some states are starting to pull federal-related COVID-related unemployment benefits in part to address labor shortages.

Montana Gov. Greg Gianforte, a Republican, on Tuesday said his state was opting out of the $300 unemployment boost on June 27 and instead offered a $1,200 return-to-work bonus.

South Carolina Gov. Henry McMaster, a Republican, followed suit on Thursday, ordering the termination of the state’s participation in the programs by June 30.

"South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic," McMaster wrote in a letter to Department of Employment and Workforce Director Dan Ellzey.

"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," he added.

"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."

The state currently has 81,684 open positions, according to Ellzey.

Gianforte in a press release said, ''Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers. Nearly every sector in our economy faces a labor shortage.

"Incentives matter, and the vast expansion of federal unemployment benefits is now doing more harm than good," the governor continued. "We need to incentivize Montanans to reenter the workforce."

"Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work," he added.

U.S. unemployment claims fell to a low of 498,000, the lowest point since coronavirus struck 14 months ago.

Thursday’s report from the Labor Department showed that applications declined 92,000 from a revised 590,000 a week earlier. The number of weekly jobless claims — a rough measure of the pace of layoffs — has declined significantly from a peak of 900,000 in January as employers have ramped up hiring.

At the same time, the pace of applications is still well above the roughly 230,000 level that prevailed before the viral outbreak tore through the economy in March of last year.

Hiring has picked up in recent months, though the nation still had 8 million fewer jobs in March than it did in February 2020.

A Labor Department spokesperson told The Associated Press that ending participation in the programs ''will have the greatest impact on the most vulnerable.”

Information from the Associated Press was used in this report.

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