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Unemployment shrinks, but so do paychecks

Floridians are earning less and taking more low-wage jobs than they were a year ago, with pay rates dropping more than almost anywhere in the country.

Workers saw their pretax paychecks shrink to an average of $847 per week, down $24 or 2.8 percent compared with 2011, according to a U.S. Department of Labor report released Thursday.

Florida trails only Minnesota, Nevada and Connecticut in wage decline, according to the Labor Department.

What that means for Florida's economy depends on whom you ask.

Several think tank and federal government reports say a drop in wages can undermine economic recovery. But many economists also believe the decline can help fuel improvement by encouraging businesses to hire.

"The decline in wages will lead to more people working and help to pull the country out of the recession," said Larry Kenny, a University of Florida economics professor.

Florida's unemployment rate also decreased by 1.4 percent during that time, on par with the national average, according to the Labor Department.

Gov. Rick Scott frequently touts state data (collected more recently than the federal data) that put Florida's unemployment at 8.6 percent, a 2.5 percent decline within the past several months. But a report from the Legislature's research offices suggests the actual decrease is only about 0.3 percentage points once researchers factor in people who dropped out of the job market.

Scott spokesman Lane Wright said the governor welcomes all jobs.

"Gov. Scott has put a lot of focus on the high-tech sector, but he is not limiting Florida's growth to just that," Wright said. "We're not going to reject jobs just because they don't pay as high of a wage as they might in other sectors."

Why have Florida's wages dropped more than in other states?

Several factors may contribute, said Merrill Matthews, a resident scholar at the Institute for Policy Innovation.

Among them, Florida has made it more difficult for people to apply and retain unemployment benefits, which can shove more low-wage earners into the workforce and lower wages, Matthews said.

"Once those unemployment benefits are about to end people become more willing to compromise and are willing to accept less," he said.

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Comments

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whasup

Yes, necessity is a mother ... of many things.

One of those chief benefits of a weak labor market is that businesses can hire folks at lower wages and survive better ... or at all.

Of course, what we don't see happening is an effort to save the taxpayers more money by reducing wages paid to government workers.

With as many folks out of work, or no longer looking, or willing to take lower wage jobs, with few if any benefits, is that we have a large pool of skilled workers who would be happy to do government jobs for less than the current occupants.

Why not eliminate almost all state government positions, and open up new government positions and let former workers and the unemployed bid for those new jobs at the best labor price for the taxpayers?

Necessity is a mother ... but competition is good for the buyer (i.e., the taxpayers).

Randall McMurphy

"Of course, what we don't see happening is an effort to save the taxpayers more money by reducing wages paid to government workers."

Really, whasup? No pay raises for 6 years and a 3% salary reduction supposedly to make them pay into their pensions which in actuality is being ported to the general revenue fund to pay for all those gubmint programs that people like you claim you don't need and never use?

You know very little about the finances of this state it would seem. Florida has the lowest number per capita of government workers per citizen of all 50 states and the lowest cost per capita to the taxpayer per worker and--not counting Friends of Rick who are making upwards of $150K per year salaries--one of the lowest pay and compensation plans. Jeb Bush saw to that.

There are many openings for state jobs right now yet I don't see many folks jumping up to be full-time correctional officers for $28K per year so maybe--just maybe--you don't know what you're talking about.

Sandman

At least OUR unemployment is shrinking. Ask Obama how his inemployment rate is doing. Oh, wait... he wants to talk about something - anything - else.

debbieqd

Republicans are in a real race to the bottom -- for workers, not for their "job creators" sitting on over a trillion dollars and availing themselves of every tax loop hole they lobbied successfully for over the past 30 years. There will NEVER be an economic recovery in America until the wealth that is being deliberately spread upward to the "job creators" gets deliberately spread back to the 99% by creating good jobs, good benefits, and adequate pay. The new conservatives are destroying our country with a doubling-down of an ideology that has failed since Ronald Reagan.

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