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Florida unemployment hits 11.8%; shrinking labor pool masks deeper problem

Florida's unemployment rate for December hit 11.8 percent, inching closer to breaking the state record of 11.9 percent set nearly 35 years ago.

In the Tampa Bay area, the jobless rate was 12.4 percent, driven in part by Hernando County's whopping 14.9 percent rate, second-highest in the state.

As bad as that sounds, the worst number to come out of the state's monthly job report might be 31,000. That's how many Floridians dropped out of the labor force in just one month.

Some of them were discouraged after a long and fruitless job hunt. Economists said some had likely exhausted unemployment benefits and no longer had the incentive of proving they were actively looking for work in order to receive aid.

If those 31,000 had been included as still looking for work, the state's unemployment rate would have been 12.1 percent. Add in all 163,000 Floridians who have dropped out of the labor force over the past year and the unemployment rate would be 13.4 percent.

It's only a matter of time before some of those discouraged workers re-enter the labor pool, pushing unemployment up even higher, said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.

"This is bad and really it's worse than it looks because you had that drop in labor force participation," Brown said. "They don't call it the Great Recession for nothing."

After hunting for a job for nearly two years, former computer company owner and real estate broker Eddie Diaz understands why some of his fellow jobseekers have stopped their searches.

But he's not ready to quit. "You just have to keep a positive attitude because there are no other options," the 59-year-old Tampa resident said.

Florida isn't alone in its labor pool woes. Consider California, which lost 38,800 jobs in December, more than any other state. But its unemployment rate was unchanged at 12.4 percent because 107,000 Californians left the labor force.

Nationally, labor force participation fell to a 24-year low in December. About 1.7 million Americans left the work force from July through December, the biggest six-month decrease since 1961.

In the typical recession cycle, unemployment peaks after recovery is under way because "discouraged workers" become more confident and re-enter the labor pool. That's why the current record for Florida's unemployment of 11.9 percent was set in May 1975, after the 1973-74 recession had ended. The state records go back to 1970.

Rebecca Rust, chief economist with the Florida Agency for Workforce Innovation (a.k.a the state's unemployment office), declined to speculate how high unemployment could rise until a new state economic forecast is released Feb. 5.

In a conference call Friday, Rust acknowledged several factors that could push up the jobless rate in addition to the re-entry of discouraged workers.

Among them: an undetermined number of Haitian refugees entering Florida in search of work; rising foreclosures continuing to stifle the housing market's recovery; and a stubborn credit crunch making consumers reluctant to spend and small businesses unable to tap bank loans to grow.

One large "structural problem" hampering recovery, she added, is that job candidates often don't have the skills or training to match openings. She noted there are roughly 12,000 job openings statewide for registered nurses based on an analysis of online ads. "Nursing is among the fastest growing occupations and one of the occupations with highest wage levels," she said.

Health care, in fact, has been the state's only growing job sector for most of 2009, adding 11,000 jobs over the year. Nearly two-thirds of job losses statewide have been tied to three industries: construction; trade, transportation and utilities; and professional and business services.

To be sure, there are signs of hope:

• Job losses are moderating. Mass layoffs have fallen dramatically since early last year, and there is a rise in openings for such jobs as retail sales managers, customers service reps and occupational therapists.

• State leaders aim to create 10,000 direct jobs and 25,000 indirect jobs through the Florida Back to Work Program. As part of the program, more than $7 million in grants will be used to find and retrain Floridians for "green" jobs. So far, businesses have submitted more than 850 proposals to regional work force boards seeking a slice of the funding. Initial grants will be awarded Feb. 1.

• On the big project front, Merlin Entertainments Group plans to turn Cypress Gardens in Winter Haven into a Legoland theme park, spending hundreds of millions of dollars on the transformation and creating 1,000 jobs when it opens at the end of 2011.

• Florida also is angling for $2.5 billion in federal stimulus funds for a high-speed rail line between Tampa and Orlando. Promoters are hopeful that a planned Tampa Bay visit by President Barack Obama and Vice President Joe Biden next week is to announce federal backing for the project, which could create thousands of jobs.

Still, with nearly 1.1 million jobless out of a statewide labor force of 9.2 million, few are predicting a quick recovery. Florida preceded the country into the recession and is expected to lag in pulling out of it.

Florida started shedding jobs in April 2007, eight months before the national recession began. Since then, the state has lost 723,000 jobs.

Jeff Harrington can be reached at [email protected] or (727) 893-8242.

County-by-county unemployment rates

In the bay area, Hernando has long been a loss leader. Hernando's December jobless rate was second highest statewide.

RegionDec. 2009Nov. 2009Dec. 2008
Citrus12.9 percent12.7 percent9.9 percent
Hernando14.9 percent14.8 percent10.8 percent
Hillsborough12.1 percent12.2 percent7.9 percent
Pasco13.4 percent13.3 percent9.3 percent
Pinellas11.9 percent11.9 percent8.2 percent
Flagler (highest)16.9 percent16.8 percent11.8 percent
Liberty (lowest)6.0 percent6.1 percent4.7 percent
Tampa Bay*12.4 percent12.4 percent8.4 percent
Florida11.8 percent11.5 percent7.6 percent
Nation10.0 percent10.0 percent7.6 percent

* Combines Hernando, Hillsborough, Pasco and Pinellas counties

Note: County and Tampa Bay area numbers are not seasonally adjusted. Florida and U.S. numbers are seasonally adjusted.

Source: Florida Agency for Workforce Innovation

Florida unemployment hits 11.8%; shrinking labor pool masks deeper problem 01/22/10 [Last modified: Friday, January 22, 2010 10:39pm]
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