Have unemployment benefits driven Lowcountry’s staffing crisis? Here’s what the data says

Ashlee Houck, executive director of the Beaufort Area Hospitality Association, knew turnout at the job fair last week on U.S. 21 would be low. So it didn’t surprise her that, several hours into the event, only about 15 job candidates had passed through.

“We anticipated that but wanted to give the opportunity to those who [do want to get back to work],” she said.

Monday’s event was intended to match those looking for work with businesses in need of staff as the coronavirus pandemic fades. The staffing shortage, which the Lowcountry has dealt with for years, has seemed to reach a tipping point over the last several weeks as tourists arrive in droves at the area’s hotels, restaurants and shops.

Several restaurants have posted on social media about closing temporarily due to a lack of staff. One hotel operations manager at the job fair told The Island Packet he’s had to turn guests away because there were not enough clean rooms. The shortages, both employers and staff report, are wearing existing staff thin.

The root cause of the problem is unclear.

Some say the area’s lack of affordable housing, child care and transportation make it unlivable for the working class folks who fuel the tourism industry, causing them to seek jobs and housing elsewhere, including in Jasper County.

But the far more common talking point is that employers have been unable to bring back workers they lost during the COVID-19 pandemic, when many in the hospitality industry were laid off. Critics of federal unemployment benefit programs say they reduce people’s motivation to return to work.

The federal benefits will become unavailable to South Carolinians on June 30, following an order from S.C. Gov. Henry McMaster to the S.C. Department of Employment and Workforce to withdraw from the federal programs. They expire for most of the rest of the country in early September.

Some workers may actually make more money on unemployment than working. South Carolina has no minimum wage law, meaning it’s set at the federal rate of $7.25 an hour. But employers need to pay tipped workers, such as servers and bartenders, only $2.13 an hour as long as their tips bump them up to $7.25 an hour.

“For some people, it might be better money-wise, but you’re still going to have to have a job afterwards,” said Robin Price, vice president of Saltus River Grill, Plums Restaurant and Hearth Wood Fired Pizza in downtown Beaufort.

Price and other restaurateurs said wages depend on the position and experience. At Saltus, Plums and Hearth, a cook can expect anywhere from $12 to $18 an hour, while servers make $2.50 an hour plus tips. Hosts can expect $8 an hour and tips, and dishwashers can make between $9 and $12.

Some say the fact that it may pay better not to work is evidence the minimum wage needs to be increased.

“Some server jobs don’t pay enough at [$2.13] an hour, so you’ve gotta bust your butt for the tips, and you can’t make customers tip you,” said Alicia Wilson, a mother of three who attended the job fair. “If you’re not getting money at the pay rate as a server, and you’re not making tips, how are you going to live off of that? I think South Carolina can do a little more, at least go up on minimum wage.”

The pandemic has devastated Wilson, who last year was raising a newborn and working three jobs. She has been unemployed for the past few months but wants to get back to work and is looking at managerial jobs in hospitality.

State and local data indicate the staffing situation may be improving. Beaufort County’s unemployment rate and number are at their lowest since September. But the data also show that even if every unemployed person in the county were to get a job here, more than 1,000 positions would still be available.

By the numbers

According to the S.C. Department of Employment and Workforce, Beaufort County’s unemployment rate was 4.1% in March, with 3,198 people out of work but looking for jobs. That was the lowest rate since September 2020, when 4% of the labor force was out of work, or 2,936 people.

The local unemployment rate last month was significantly lower than the state rate of 4.8% and the national rate of 6.2%.

The number of unemployed and the unemployment rate have been on a downward slope locally, statewide and nationally since peaking in April 2020. This indicates people are either returning to work or leaving the labor force altogether, which means they cannot receive unemployment benefits.

DEW data suggest that we’re seeing more of the first — a good sign. Employment within the county has increased over the past several months to 75,253 in March.

Of course, employment always grows this time of the year, when the tourism season begins. But DEW data suggest that more jobs may be available than the number of people looking. Last month, there were 4,456 jobs available but only 3,198 looking.

The contentious federal unemployment benefits that will soon go away include pandemic unemployment assistance for workers who do not qualify for or have run out of state unemployment insurance (PUA ranges from $131 to $326 per week for up to 79 weeks minus the weeks you received regular UI and extended benefits); pandemic emergency unemployment compensation, which extends unemployment insurance to those who have exhausted their benefits for up to 53 weeks; federal pandemic unemployment compensation, which provides a $300 supplement to those receiving any unemployment benefits; and mixed earners unemployment compensation, which provides a $100 weekly supplement to those receiving benefits who have earned both self-employment income and regular income.

Regular state unemployment insurance benefits can range from $42 to $326 per week. With the federal supplement, an unemployed person can receive as much as $626 per week. That would be $15.65 an hour for someone working full-time — more than double minimum wage.

Unemployment is taxable income.

‘Straining our staff’

Charlie’s L’Etoile Verte, a nearly 40-year-old mainstay of Hilton Head Island’s south end, has weathered many storms in recent years: Its founder and chef’s long battle with a spinal infection. A state-mandated six-week closure of outdoor dining during the pandemic. And now, a staffing shortage some employees attribute to unemployment.

“It’s so stressful not knowing where the next hole is going to appear,” owner Margaret Pearman says. “We were set to do more business than we have ever done, but we can’t compromise service.”

Last week, six positions were open. Pearman said she’s hoping they’ll be able to fill most of them in the next week. All full-time employees, she said, make more than $626 in a week, the maximum benefit a South Carolinian receiving state UI and the $300 federal supplement could receive.

On Wednesday afternoon, staff bustled around the French bistro, preparing for what would undoubtedly be a busy night shift.

Joshua Castillo, executive chef, said the lack of staff has put a “psychological strain” on the workers.

“You just have to get through the shift,” he said. “You’ve got three hours to go and everything keeps piling up, and you’ve just got to keep reminding yourself … it will eventually stop.”

Castillo said people will sign up for interviews and not show up — perhaps, he suggested, just to check a box while applying for unemployment insurance.

“I think a lot of people are taking advantage of the system, and that’s straining our staff,” he said. “That strains the businesses to closing altogether or starting to pick an extra day where the restaurant just closes” and loses profit.

Castillo and Michelle Soulia, a server at Charlie’s, said COVID-19 safety concerns could be playing a role in people’s hesitancy to come back to work.

But the main reason, they said, is that people would prefer to sit at home and receive unemployment benefits — even if they weren’t making more than Charlie’s would pay for work.

“Get everyone off unemployment, raise the minimum wage if you have to,” Soulia said, the day before the governor announced DEW’s withdrawal from the federal unemployment program. “Just get America working again. There’s shortages on everything — food, wine, employees. We need to get them all back. Because they were working before the pandemic. It’s time to go back.”