(CNN)South Carolina is joining Montana in ending federal pandemic unemployment benefits for its residents next month. The Republican governors of both states say the enhanced jobless programs are dissuading people from returning to the workforce and are creating labor shortages.
They are the first two states to halt participation in the historic federal expansion of jobless benefits, which Congress enacted last spring as the coronavirus pandemic began upending the national economy and costing millions of Americans their jobs.
The move, which may be replicated in other states as the economy springs back to life amid declining coronavirus cases, is necessary to address Montana’s “severe worker shortage,” said Gov. Greg Gianforte, a Republican.
He noted that he has heard from many employers that they can’t find workers, particularly in the health care, construction, manufacturing, and hospitality and leisure industries.
“Incentives matter, and the vast expansion of federal unemployment benefits is now doing more harm than good,” Gianforte said. “We need to incentivize Montanans to reenter the workforce.”
Instead, Montana will provide $1,200 return-to-work bonuses, paid for with funds from President Joe Biden’s $1.9 trillion coronavirus relief package.
South Carolina Gov. Henry McMaster made no mention of a bonus in his announcement Thursday. He echoed Gianforte’s comments, saying that the supplemental federal payments, combined with state benefits, are larger than some workers’ previous paychecks.
“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,” he said.
Business owners and Republican national and state officials have warned over the past year that the enhanced federal unemployment benefits will keep out-of-work Americans on the sidelines longer, though several academic studies have found no evidence of that.
Congressional Republicans tried to create a federal return-to-work bonus last summer when lawmakers were debating whether to extend a $600 weekly enhancement before it expired in late July. Neither were ultimately enacted.
After Congress failed to renew the supplement, former President Donald Trump provided $300 in federal benefits for several weeks to the unemployed via executive action. South Dakota Gov. Kristi Noem, a Republican, turned down that offer, saying her state
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