As Hanna Raskin reported last week in our Food section, Charleston restaurant owners are “having a devil of a time” finding staff to meet the increasing demand for their services.
The staffing problem is not just local and not just confined to restaurant work. In South Carolina, with an unemployed population of 126,000, there are 87,000 jobs going begging on the Department of Employment and Workforce website. Nationwide, there are 10 million unemployed and 6.9 million unfilled jobs, according to the U.S. Department of Labor.
The inability of employers to fill jobs is among the bottlenecks that may be slowing down the economic recovery from COVID-19 and forcing up prices.
Part of the problem is a mismatch between the education and skills needed and those available in the unemployed pool. But part of the problem also could be the size of unemployment benefits guaranteed by the federal response to the pandemic.
Initially, the federal government supplemented state unemployment benefits by $600 a week. Arguments that the size of the benefit might become an obstacle to economic recovery persuaded Congress to reduce the supplement to $300 a week. The recent $1.9 trillion pandemic relief bill extended this help through Sept. 6.
When the maximum S.C. unemployment benefit of $326 a week is added, the result is $626 a week, which is in the range of estimates for the median income in the state. Many recipients would not have survived the crisis financially without this support; many have gone back to work as jobs opened up.
But Dan Ellzey, executive director of the S.C. Department of Employment and Workforce, said a “disturbing” aspect of the unemployment figures is the low number of job searches being conducted by many people receiving benefits. As a result, he will soon reinstate a rule — suspended a year ago at the start of the pandemic — that unemployed people must verifiably report that they regularly look for work to continue eligibility for unemployment insurance. That is a good idea.
In a separate action, Mr. Ellzey’s department is commendably participating in a federal program to discourage rampant unemployment insurance fraud running into the tens of billions of dollars nationally in the past year. Fraudsters in the United States and abroad steal personal information and file fraudulent claims that many state employment agencies have been ill-equipped to detect.
The U.S. Labor Department has contracted with ID.me to verify unemployment benefit claims. South Carolina also has signed up with the company to vet all future claims, but the state employment agency already has been proactive in stopping fraudulent claims, including an attempt in February to create nearly 20,000 bogus accounts. Thankfully, there was no monetary loss in that case.
Investigations by bodies ranging from the U.S. Labor Department’s inspector general to the California state unemployment agency put the losses to fraud somewhere between $50 billion and $200 billion, which suggests as much as 30% of the money the federal government has paid out for unemployment insurance has been stolen through identity theft and other crimes. It is time to stop this outrageous abuse.