While the COVID-19 pandemic has been difficult on the nation, Delawareans are lagging far behind its neighbors as the world begins to find its way back to normalcy.
According to Wallet Hub, Delaware is ranked 48th in economic recovery since the start of the pandemic. Unemployment claims are up 998% compared to this same week in 2019 – nearly twice the increase of the next largest jump in unemployment claims, New Mexico at 508%.
Four of the top five states recovering the quickest – South Carolina, South Dakota, Iowa, and Kansas have had more relaxed restrictions compared to Delaware since the start of the pandemic and have adopted practical, pro-business common sense measures to keep their states thriving.
South Carolina kept its manufacturing sector open during the pandemic, allowing the $200 billion industry to sail smoothly through the past year with a job decrease of only 2% which is expected to bounce back to pre-pandemic employment by the end of 2021.
South Dakota, which has an economy that relies heavily on tourism, took quick measures to keep travelers safe and top destinations open. The state only saw a 3.5% decrease in tourism revenue while its state parks welcomed 8 million visitors – an increase of 31% over 2019. In 2021, the state is expected to top pre-pandemic tourism dollars, with hotels already seeing a 41% increase in bookings over 2020.
Kansas schools have been in session for full-time in-person instruction since the beginning of April, after Gov. Laura Kelly (D) ended all executive orders relating to the pandemic on March 31.
According to NPR, Gov. Henry McMaster (R-South Carolina) lifted mask mandates and banned vaccine passports earlier this month. He stated this week that “maintaining the status quo ignores all of the great progress we’ve made.”
Gov. John Carney should take a lesson from Gov. Kelly and Gov. McMaster. Despite Carney’s repressive policies, Delaware’s positive test rate is just 0.6 percent more than South Carolina’s , and can be seen following a steady downward trend since January on the State of Delaware’s “My Healthy Community” website. Delaware is also slightly ahead with the percentage of adults having received at least one dose of the vaccine, 45 to 43.
Delaware is now on the cusp of its 28th modification to the original state of emergency order which will lift indoor capacity restrictions – as long as the space can comply with the new recommended social distancing of three feet (down from six). Despite these small improvements, customers must remain seated at both indoor and outdoor dining establishments and masks are still required.
While Delaware’s trends and modifications seem encouraging from a health and business perspective, from a financial one, they are not. Even as indoor locations increase their capacities, many employers are having difficulty finding new hires because they find themselves in competition with the government for labor.
The extra $300 per week unemployment benefit provided by the Federal Pandemic Unemployment program (FPUC) distorts incentives to work, and makes it more economically enticing for the unemployed to remain on the rolls rather than take available jobs.
Twelve states including South Carolina have announced cutting back on the federal emergency unemployment benefits with the goal of ending the labor shortage, hastening economic recovery, and saving taxpayer dollars.
Delaware is continuing with the assistance and in February, passed House Bill 65 which waived 2020 income tax on unemployment benefits.
This means a continual flow of generous benefits for the 6.5% of Delawareans who remain unemployed (the national unemployment rate is 6.1%) plus a tax break on those earnings. According to The Hill, some unemployed individuals could be bringing home up to 150% their usual earnings by relying solely on current unemployment benefits.
The Delaware Division of Small Business has been assisting small business owners throughout the pandemic, offering nearly $200 million in relief grants to approximately 4,000 businesses, but these businesses need to be open full-time at full capacity with a full workforce to be weaned off government assistance.
The combination of both employers and employees both relying on government assistance to stay afloat is unsustainable and will continually fuel the state’s labor shortage.
The responsibility of making the necessary changes to incentivize Delaware’s residents to work, allowing businesses to reach their full potential and giving Delawareans the return to normal that they desperately need lies in the hands of Gov. Carney.