South Dakota is the first state to decline the extra unemployment benefits under President Donald Trump’s executive memorandum he issued more than a week ago.
While praising Trump’s economic recovery efforts, Gov. Kristi Noem also wrote that the state was “in the fortunate position of not needing to accept” the extra benefits.
“South Dakota is the only state in the nation that didn’t have extended benefits kick in because our insured unemployment rate has been the lowest in the nation,” the governor wrote in a statement issued Friday. “We have the third best housing construction market in the country. And many, many businesses are looking to relocate to South Dakota because of the decisions we made during the pandemic.”
At the beginning of August, 14,428 of South Dakota residents were receiving unemployment benefits, representing 3.5% of eligible employees in the state. For the week ending Aug. 8 — the latest figures available — unemployment claims increased to 911 from 775 from the week before, according to the state’s Department Labor and Regulation, which followed 12 straight weeks of declines.
There are 10,274 coronavirus cases in the state, according to The Covid Tracking Project from The Atlantic. But there are 10.4 new cases per 100,000 people, which is considered at-risk for an outbreak, according to CovidActNow.org.
Under the president’s action issued on Aug. 8 — and backed by corresponding statements from White House officials — jobless Americans would get an extra $300 from federal funds and potentially another $100 from states, depending on how a state chooses to allocate funds.
The move came after talks between the GOP and Democrats stalled in Congress over what the next stimulus package would look like.
Many states likely won’t choose to add the extra $100 because they simply don’t have the funds, experts noted. Already, several state governors have expressed concerns about their budgets.
“It would cost New York State $4 billion between now and December to pay 25% of the unemployment insurance,” Gov. Andrew Cuomo of New York told reporters. “If [the president] thinks this is a resolution, this only makes a bad situation worse.”
There are also concerns about how long it would take to disburse these funds, which could take at least a month.
“If it was an act of Congress, they could just use their regular system to pay these benefits,” Michele Evermore, a senior policy analyst at the National Employment Law Project, previously told Yahoo Money.
With the memorandum, “they have to set up a benefit that's parallel to unemployment insurance.”
Trump’s memorandum comes after more than 30 million Americans lost the additional $600 in weekly unemployment benefits under the CARES Act at the end of July. These jobless workers have experienced a median drop in benefits between 52% and 72%, according to an analysis by Evercore ISI.