Palmetto State News

As South Carolina recovers economically from the COVID-19 pandemic, its recovery mirrors that of the neighboring state of Georgia.  

The Chicago Tribune reports that South Carolina ranks 26th of the 50 states in terms of economic recovery from the COVID-19 pandemic. Its real GDP in the fourth quarter of 2020 totaled $248.8 billion, 10.7% greater than the second quarter 2020. 

South Carolina Gov. Henry McMaster had announced his decision to eliminate the $300 weekly federal pandemic unemployment compensation program, which was ending June 30. He believes that removing the extra unemployment benefits will incentivize unemployed workers to return to the workforce.

“South Carolina’s businesses have bore the brunt of the financial impact of the COVID-19 pandemic,” McMaster said in a statement. "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. This labor shortage is created, in large part, by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits. 

“In many instances these payments are greater than the worker’s previous paychecks,” the statement continued. “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.

According to data from the U.S. Bureau of Labor Statistics, the numbers from South Carolina as of May indicate that out of South Carolina’s total labor force of 2.3 million workers, 2.2 million are employed and 110,300 are unemployed, resulting in an unemployment rate of 4.6%. At the height of the COVID-19 pandemic in April 2020, South Carolina's unemployment rate was 11.5%

In a recent policy report, Romina Boccia and Adam Michel of the conservative Heritage Foundation argued that “the most effective policies that enable the American economy to recover will remove disincentives that stand in the way of economic activity. Policymakers can realize the great American economic recovery through ensuring policy predictability and pursuing an environment that enables working, hiring, commerce and investing without unnecessary distortions.”

Georgia enacted a policy similar South Carolina's and its economic recovery has followed a similar trajectory. Georgia ranks 25th of 50 states in terms of economic recovery on the Chicago Tribune's list. Its real GDP in the fourth quarter of 2020 totaled $637.2 billion, 9.7% greater than in the second quarter of 2020

The state also ended its participation in the federal pandemic unemployment compensation program with benefits expiring June 26, according to the Georgia Department of Labor (DOL).

According to the U.S. Bureau of Labor Statistics, as of May, of Georgia’s total labor force of 5.1 million workers, 4.9 million are employed and 211,700 are unemployed, resulting in an unemployment rate of 4.1%, compared with 12.5% unemployment in April 2020.