Florida’s unemployment rate in January stayed at the lowest in a decade, and job growth is strengthening. But wages, economists say, have struggled to keep up. And while signs of pay increases are beginning to bud, employers aren’t rushing to hike salaries.
"If you need to raise wages to hire more workers, then you’ve got to pay everyone else more," Scott Brown, chief economist at Raymond James Financial, said. "There’s still a strong impetus for firms to keep costs contained."
What’s the upshot? If that boost in wages doesn’t come, Brown said, it could lead to inflation and greater likelihood of a recession.
But that’s down the road. Right now, Florida can celebrate data released Monday showing that its unemployment rate remained at 3.9 percent for the fifth month in a row, the lowest level since June 2007.
Nationally, the unemployment rate was 4.1 percent in January and unchanged in recently released February data.
The state added 10,500 jobs in January, slightly less than it averaged per month over the past year. Industries that gained the most over-the-year jobs were professional and business services (36,000), leisure and hospitality (32,400) and construction (28,600).
According to the Associated General Contractors of America, Florida added the second-highest number of construction positions over the year and the second-highest number of construction jobs over the month — 5,100 jobs. California by far led the country in adding the most construction positions over the year (75,500) and the month (11,100).
Florida, Wells Fargo senior economist Mark Vitner said, often has high job growth in lower-paying jobs and some in higher-paying jobs, such as the life sciences.
"We really have this bifurcated economy where we have strong job growth at the upper end, but it’s a smaller proportion of the employment base, and strong job growth at the lower end," he said.
While Tampa Bay had one of the largest gains over the year for job growth with 26,400 jobs, its unemployment rate also rose to 3.9 percent in January from 3.4 percent December. The two measurements of jobs and jobless rates are based on separate surveys (one of employers and one of households) so they don’t always move in lockstep.
Hillsborough County’s jobless rate jumped up slightly to 3.8 percent in January from 3.3 percent in December, Hernando jumped up to 5.2 percent from 4.5 percent, Pinellas inched to 3.7 percent from 3.3 percent, and Pasco County rose to 4.4 percent from 3.8 percent.
With such low unemployment, the last piece of the economic puzzle is wage growth. Raymond James’ Brown said that many employers are opting for better benefits packages and perks for their employees instead of an outright salary bump.
But Wells Fargo’s Vitner said that after poor wage growth for some time now, "We’re beginning to see signs that it’s finally firming," he said.
And there could be more mobility when it comes to salary. The high concentration of workers currently in low-skilled positions, Vitner said, leaves "a lot of room" for them to grow their skills and move into mid-skilled positions.
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