The Florida’s Legislature’s Office of Economic and Demographic Research came out with another report Wednesday that refutes Gov. Rick Scott’s claims that Florida’s unemployment rate is dropping rapidly because the state is creating jobs.
According to the report, titled “Florida: Long-Range Financial Outlook,” the drop in Florida’s unemployment since December can overwhelmingly be attributed to a shrinking workforce.
“If the [labor] participation rate had held steady since 12/11, the unemployment rate would have been 9.8 percent—91 percent of the drop in the unemployment rate is due to people dropping out of the workforce.” (emphasis added)
A similar trend emerged nationally last week, when the unemployment rate dropped from 8.3 percent to 8.1 percent despite lackluster job growth in the U.S.
Gov. Scott released a new chart last month, stating that the unemployment rate in Florida has dropped 2.3 percentage points during his term to 8.8 percent, a faster drop than in any other state.
"Florida continues to see evidence that Governor Rick Scott’s strategy for growing private-sector jobs is the right direction for Florida’s economy," Scott's office said in a statement accompanying the chart.
But a deeper dive into the federal data shows that the rate of job creation has been below average in Florida in the last year, and the falling unemployment rate offers little evidence of above-average job creation.
As we pointed out last month, Florida has created 69,900 jobs in the last year, a growth rate of less than 1 percent that trails the national growth rate and is worse than a majority of states. For comparison, Florida lost more than 715,000 jobs during the 18-month recession.
While a shrinking workforce has propelled Florida to top of the list when it comes to a falling unemployment rate, here’s we’re Florida ranks nationally when it comes to job growth:
1. ND (+6.8%); 2. CA (+2.6%); 3. OK (+2.4%); 4. AZ (+2.3%); 5. IN(+2.2%); 6. TX (+2.1%); 7. LA (+2.1%); 8. KY (+2.1%); 9. MN(+2.1%); 10. UT (+2.1%); 11. OH (+2%); 12. VT (+2%); 13. WA(+1.9%); 14. VA (+1.8%); 15. NE (+1.7%); 16. CO (+1.6%); 17. MI(+1.5%); 18. KS (1.4%); 19. ID (+1.3%); 20. GA (+1.3%); 21. MA(+1.3%); 22. NY (+1.3%); 23. TN (+1.2%); 24. MT (+1.2%); 25. OR(+1.1%); 26. NJ (+1%); 27. HI (+1%);
Then comes Florida with 0.962% job growth.
Florida is worst in the nation when it comes to long-term unemployment, so economists say it makes sense that frustrated workers are leaving the workforce. More than half of the state’s 800,000 unemployed residents have been jobless for six months or longer. A Florida International University study says the 53-percent long-term jobless rate is the worst, anywhere, ever.
Wages have also dropped by $1,000 since 2011, according to the FIU study.
Despite these below-average economic numbers, Florida has done a subpar job of providing unemployment compensation benefits to the jobless.
Gov. Scott and the Legislature enacted several changes to the unemployment compensation system that have made it difficult for many Floridians to access jobless benefits (the state now has the worst "recipiency rate" in the nation). Scott and his Department of Economic Opportunity have touted the drop in the number of people receiving benefits as a sign of positive job creation, but the federal Department of Labor is investigating the state’s jobless benefits program to see if it complies with federal laws.
The EDR report also pointed out that Florida’s economy was slowly improving, but several “Black Swans” could harm the tepid recovery.
A major hurricane, a Eurozone collapse or the federal “fiscal cliff” could each have a high impact on Florida’s economy.
New Florida job numbers for August are scheduled to be released next Friday.