Extended federal unemployment benefits are being phased out for almost 80,000 jobless workers in South Carolina despite the state’s high 9.3 percent jobless rate.
About 6,500 people will lose extended unemployment benefits starting in April. The remaining 79,000 jobless South Carolinians who now are getting extended jobless benefits will lose them at the end of the year, the S.C. Department of Employment and Workforce said Thursday.
Starting in January, workers who lose their jobs in South Carolina will qualify only for 20 weeks of unemployment checks. During the worst of the Great Recession, workers could get up to 79 additional weeks of jobless checks – for a total of 99 weeks of benefits – while they searched for a job.
The state’s falling unemployment rate triggered the loss of extended benefits. Jobless workers in seven other states also lose their extended benefits.
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“I’m a little surprised,” said Wells Fargo economist Mark Vitner. “You’ve got a lot of rural areas in the state, some of which have the highest unemployment rates in the country.”
Many of those rural counties still are suffering double-digit jobless rates; some had double-digit jobless rates before the Great Recession. The loss of extended benefits could mean workers in those depressed counties will move to more urban areas, where jobless rates are falling, to look for work, Vitner said.
“A lot of their skilled workers are moving away, and this will encourage that even further,” Vitner said of the rural counties.
South Carolina is among seven states where the falling jobless rate “triggered” the loss of extended federal benefits, Employment and Workforce spokeswoman Adrienne Fairwell said. The others are Kentucky, Massachusetts, Missouri, Ohio, Oregon, Tennessee and Wisconsin.
Unemployed workers who move from 20 weeks of state unemployment benefits to the extended federal benefits before the end of the year will have to prove they still are eligible to get an unemployment check in a face-to-face meeting with the workforce department, Fairwell said.
That department has been criticized for failing to review the eligibility of jobless workers seeking unemployment benefits.
South Carolina’s jobless rate – which peaked at 12 percent in late 2010 – has been falling for the past six months.. After a historic decline in December, the rate fell to 9.3 percent in January.
However, that still is a full percentage point above the national rate. Nearly two-thirds of the state’s 46 counties still have jobless rates or more than 10 percent; Marion County’s 19.2 percent rate is the highest.
In the state’s larger metropolitan areas, however, unemployment rates are on the decline. Richland County’s jobless rate fell in January to 8.1 percent, and Lexington County registered the state’s lowest unemployment rate, at 6.9 percent.
In the state’s urban areas, the loss of an unemployment check – never meant to be a permanent safety net – likely will push more people back into the labor force, College of Charleston economist Frank Hefner said.
“What about the number of people who stopped looking actively or looked just enough to get the benefits?” he said. “There’s always the hard-luck stories. ... (But) hard-luck economic problems make bad policy.”
Continuing long-term subsidies for the jobless could lead to a situation such as the one in Europe, where many countries seemingly have permanent double-digit unemployment rates, he said.
“We see now, we have problems,” Hefner said. “You either have to borrow a lot of money or raise the taxes on the guys who are working.”
Forcing unemployed workers back into the job market will fill the needs of employers who are hiring and help other jobless workers keep their skills sharp. “Now, people may settle for the second-best or third-best job, just to get a job,” Hefner said. “That’s what we want to see happen in the economy.”
Still, Wells Fargo economist Vitner said he is not sure taking away extended jobless benefits while the economy’s recovery still is on shaky ground is the right decision.
“There aren’t a whole lot of jobs out there in a lot of these counties,” he said. “There may not be any jobs there for them to take.”