- September 1, 2021
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South Carolina remained about 2.6% below its pre-pandemic employment levels as Labor Day Weekend approached.
The state continued its economic recovery in July by adding 20,100 employed people, according to the latest employment situation report, but the state remained with about 57,000 fewer people working compared to February of 2020.
Locally in the Greenville-Anderson-Mauldin metro statistical area, employment levels were still below 2.9%, or about 12,400 people, compared to pre-pandemic employment.
The largest gains in July were seen in the leisure and hospitality industry with an employment increase of 9,300, or a 3.95% — but staffing challenges continue to plague some in the industry.
Bojangles closed some stores on August 30 and will close some stores on September 13 to help give staff a temporary break.
“From navigating a global pandemic to adjusting to new safety measures to picking up shifts for those unable to come in for work, we’ve asked, and they’ve delivered,” Bojangles CEO Jose Amario said in a written statement. “But this hasn’t been easy, and we know many people are physically and emotionally drained, so we hope these extra two days off will provide rest and refreshment.”
Others, such as Henry’s Smokehouse, have made similar decisions to close some locations temporarily due to staffing challenges.
Some, like Buttercream Bakehouse, have closed permanently because of a lack of workers but will fill wedding orders that have already been booked.
“After 11 years we have closed our little bakery,” the bakery said in a Facebook post. “We are no longer able to keep up the pace of all the items we make without the staffing needed to make all of our favorite treats. We have met some of the nicest people who we think of as friends.”
Others in the industry have tried creative ways to entice workers back.
McGee’s Irish Pub & Restaurant in Anderson recently added a babysitter to its staff to help workers with their childcare needs.
Larkin’s Restaurants began offering $20 an hour to cooks at its downtown Greenville Grill Marks location back in May.
However, leisure and hospitality continue to be the hardest hit industry during the pandemic with 10.4% fewer people employed compared to February 2020.
Joey Von Nessen, research economist from the University of South Carolina, said there are several reasons for the labor shortage — a large number of retirements during the pandemic, childcare issues and higher disposable incomes that leaves fewer people in immediate need of employment thanks to three stimulus checks and enhanced unemployment benefits.
“This significantly increased the disposable income for Americans and effectively doubled the U.S. individual savings rate. As such, people are more likely to have the financial resources to temporarily live off of their savings and take more time to look for work,” Von Nessen said in an email. “They don’t have to accept the first offer they are provided, which in effect slows labor force growth.”
South Carolina ended federal unemployment benefits at the end of June in an attempt to increase employment growth, but it’s unclear how effective that decision was with just one month of new data, according to Federal Reserve Bank of Richmond economist Laura Ullrich.
A comparison between North and South Carolina did not show people immediately flocked back to the labor market. The two states have had similar pandemic recoveries, Ullrich said, but North Carolina did not end the federal unemployment benefits.
North Carolina has roughly double the population of South Carolina, so adding 40,000 jobs would keep pace with South Carolina’s July job growth.
“South Carolina added 20,100; North Carolina added 75,600 jobs,” Ullrich said during a monthly jobs report call with reporters on August 20.
She added that North Carolina’s recovery has been faster in recent months. South Carolina’s employment is down 2.6% compared to pre-pandemic levels, and North Carolina’s is only down 0.99%.
“It does not appear that South Carolina ending unemployment benefits in June led to some outsized increase in the labor force or employment in July,” Ullrich said.
She added, in an interview this week, that it shows the issue is complicated for those who haven’t come back to work.
“There’s a lot going on,” she said in the interview. “There’s a lot going on with childcare issues, there’s a lot going on with health, obviously there’s a lot going on with people actually being afraid of COVID. So, it’s a complicated issue.”
Von Nessen added that the labor shortage could partially be mitigated as income and savings levels regress to pre-pandemic norms and as schools return to in-person learning and parents have a reduced demand to stay home.
However, Ullrich said on August 20 that the delta variant could cause some uncertainty as another surge of COVID-19 cases has occurred in South Carolina. Two weeks ago, schools in Pickens County had switched to remote learning for a week thanks to a high number of infections.
Von Nessen added that as staffing challenges continue, employers will need to continue evolving their practices.
“To the extent that our current labor shortages persist, this will likely incentivize employers to offer higher wages and greater benefits for employees,” Von Nessen said. “For example, we are already seeing signing bonuses being offered by many employers for the first time along with more flexible schedules.”
Despite having about 57,000 fewer South Carolinians working compared to pre-pandemic levels, the state has more people participating in the labor market than before the pandemic — with over 2.4 million working or looking for work this July compared to over 2.3 million in February 2020.
South Carolina’s growing labor force is different from national trends. The nation is still 1.6% below its labor participation rates from February 2020, according to the Bureau of Labor Statistics’ July employment report.
Ullrich said this could be a sign of a few different factors. It’s evidence that people are migrating to South Carolina and it could mean that some are residing in South Carolina but work else, possibly working remotely.
The state also continues to report better unemployment rates than the country, 4.3% compared to 5.7% nationally in July. Anderson has even better rates with 4.0% unemployment.