South Carolina, Montana declining federal unemployment funds 'a huge mistake,' economists say

States that decline federal unemployment benefits may end up harming their economies, experts told ABC News.

South Carolina and Montana residents will be cut off from federal pandemic unemployment benefits next month, with Republican governors in each state claiming the payments have led to a workforce shortage. Economists say that's not the case. "Employers are just angry that they are unable to find workers at relatively low wages," Heidi Shierholz, a senior economist and director of policy at the Economic Policy Institute, said in an interview. "The jobs being posted are more stressful, more risky, harder jobs than they were pre-COVID. ... When the job is more stressful, then it should command a higher wage." These two states will be the first to end participation in the unemployment enhancement programs, as both states are attempting to transition back to pre-pandemic unemployment insurance eligibility and benefits by the end of June. Unemployment recipients will lose an extra $300 per week, and contractors and gig workers will lose their access to the Pandemic Unemployment Assistance program. In March, 120,783 South Carolinians still were looking for jobs, according to the state's Department of Employment and Workforce. In Montana, there were about 25,000 people filing unemployment claims, according to the state's Department of Labor. There are about 9.8 million unemployed workers across the U.S.