Regional economist says worker shortages multi-factored; report shows state also lost 4,200 jobs in April

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Similar to national trends, South Carolina had a "disappointing" jobs report for April with a loss of 4,200 jobs, but a counter lingering theme is employers still can't find workers.

Federal Reserve Bank of Richmond regional economist Laura Ullrich, based in Charlotte, provided the analysis of the state's official April employment report on Friday, but she also said she does not think the current tight labor market "can all be explained by the stimulus" checks.

Her comments are in contrast to Gov. Henry McMaster, who two weeks ago announced the state will leave the federal unemployment programs providing extra money to jobless residents on June 30. McMaster cited the additional payments as becoming an "entitlement" and the reason for "unprecedented" workforce shortages in the state.

Ullrich said she thinks multiple factors are at play in the labor shortages across various sectors, including the stubbornly stagnant nature of low-wage jobs through the years and child care issues for parents with kids at home for virtual school in addition to the increased unemployment checks.

A "crisis" such as the COVID-19 pandemic also causes families to re-evaluate and some to retire early, she added.

"People tend to think about their lives in a little different way when they go through these big, traumatic events," Ullrich said, "and so some of these people who have left the labor force are not going to come back. Maybe they sat down as a family and decided someone was going to stay home with the kids. Or they were going to retire two years earlier than planned or whatever it is.

"Others, I think, whether they have had COVID-19 itself or COVID-related issues with child care and other disruptions to their family where it has been very difficult for them to work in this environment. So, the fact that they have been able to get the stimulus payments and the unemployment payments has allowed them maybe to be a little bit pickier in their manner in the job market. … But I don't think it can all be explained by the stimulus. I think it is more complicated than that at the same time."

A total of 24 states now, all with Republican governors, have decided to pull out from the federal relief programs early or make changes to the extra weekly $300 in federal payment to unemployed workers.

Neighboring North Carolina, with a Democrat as governor, has not announced it will pull out of the federal unemployment program. Ullrich said she is interested to see what will happen with the two states because their recoveries since last year have been similar to date.

"Because in a lot of ways, North and South Carolina have looked very similar through this period. This is just such a different period of time; we just don't really know. It's just going to take a little while to see what the overall impacts are."

For the month of April, private education and private health care services in South Carolina added 2,300 jobs, construction added 600, and state and local governments also added 600. Big sectors losing jobs last month included manufacturing (-2,500) and professional and business services (-2,300), which includes staffing agencies.