Unemployment could pay more than a wage for some laid off SC workers, DEW officials say
Low-wage workers in South Carolina who were laid off because of the coronavirus may be making more money from unemployment than they would make if they went back to work, according to officials from the S.C. Department of Employment and Workforce.
That reality has some business owners wondering whether their workers will come back once restrictions on operating are lifted. Restaurant dining rooms, for example, are currently closed statewide as part of an executive order from the governor.
South Carolina’s unemployment payments alone aren’t causing the boost in some unemployment checks. Instead, it’s federal money coming in.
The CARES Act, a COVID-19 aid package that was passed by Congress in late March, included a provision that provided an extra $600 a week for those applying for unemployment. The provision expires at the end of July.
Before the package passed, the amount of unemployment South Carolina was allowed to give out each week ranged from $40 to $326. The federal act nearly tripled the maximum amount of money a South Carolinian could receive in unemployment, Department of Employment and Workforce Chief Administrative Officer Jamie Suber said.
In South Carolina, furloughed workers can also apply for unemployment, thanks to an executive order from S.C. Gov. Henry McMaster.
Since the majority of businesses closed due to the coronavirus, South Carolina has seen 341,730 unemployment claims.
For some restaurant owners, talking to employees about coming back to work has lead to complicated conversations. South Carolina Restaurant and Lodging Association Chairman Bobby Williams said it’s difficult to ask employees to come back to work when it may not be the best option for them financially.
“It’s hard for an employer to say, ‘Come back to work for $500 a week or stay home and collect $700 a week,” said Williams, who is also the owner of Lizard’s Thicket. “We want the best for the employees, but the rationale doesn’t make sense.”
Most restaurant employees in Columbia make between $9 and $12 an hour, Williams said. Under the CARES Act, those making minimum wage can bring in the equivalent of about $15 an hour through unemployment, he added.
“Everybody in the restaurant business are concerned about this, but they’re torn because they want their employees to get as much money as possible,” Williams said. “They’re making so much money not working. It’s just a tough situation.”
Williams said he was sure the increased wages through unemployment may cause some employees not to come back to work.
Williams’ concern is one that has been echoed by the state’s Republican U.S. senators, U.S. Sens. Lindsey Graham and Tim Scott, who cosponsored an amendment to the CARES Act that would have decreased the add on to unemployment.
Graham and Scott wanted to give enough money in unemployment to match what workers were making before they were laid off, rather than doling out the flat $600.
Their amendment ultimately failed.
Both Scott and Graham have said they believe the increased minimum wage would “incentivize” workers to remain unemployed or on furlough rather than going back to work.
“People are hardworking, good honest folks, but they’re going to do what’s best for them,” Graham said during a Facebook town hall last week.
‘They want to work’
Scott has heard from several businesses across the state about difficulties with finding employees due to the extra unemployment case, spokesperson Janae Frazier-Bowens said in a statement.
“The consequences of these provisions will last far beyond the immediate situation surrounding COVID-19, as they actively incentivize people to not work and sever employer-employee relationships,” Frazier-Bowens said in a statement.
But Suber, the DEW official, said many people would rather secure long term employment than a temporary raise in income.
“The additional $600 runs out in July, and there are benefits to full time employment,” including health insurance and paid time off, Suber said.
Blue Marlin owner Bill Dukes said he has been “blessed” to have employees that would rather come back to work, even if they are making less money.
Dukes and his son gathered several former restaurant employees last week to have a frank conversation about the pros and cons of coming back to work, he said.
“My son and I were very very transparent with them. ... We shared with them the fact that if they stayed on unemployment, they would be making ‘X’ amount of money, and if they came back with us, they would only be making the amount of money they were making when they were terminated,” Dukes said. “But when they came back with us, they would be guaranteed long term employment.”
After the conversation, Dukes said every employee they talked to agreed to come back to work.
“They want to work and they trust us and they know our sincerity,” Dukes said.
This story was originally published April 24, 2020 at 5:00 AM.
