Friday, June 22, 2018
Politics

PolitiFact: Rick Scott brags about Florida's declining unemployment rate

The competitive businessman in Gov. Rick Scott wants Florida to be No. 1 for jobs.

By most measures, it's not, and in at least one area, it's dead last.

But what about its declining unemployment rate?

Scott often points to this measure as evidence the state is headed in the right direction. In August, when monthly jobs numbers showed the state lost 3,300 jobs and the unemployment rate ticked up to 8.8 percent, Scott's office found something nice to trumpet: Over the past 20 months (when Scott took office), the unemployment rate fell faster in Florida than in any other state.

Scott repeated the claim a month later at a board meeting of Enterprise Florida, the official economic development organization of the state of Florida.

"We have every reason to brag about what's going on in our state," he said. "If you look at the fastest drop in unemployment, it's down 2.3 (percentage points) in the last 20 months."

We've heard conflicting reports about Florida's job creation record, so Scott's argument that the state's falling unemployment rate is brag-worthy piqued our interest.

His math is right. Since December 2010, the month before he took office, it has fallen 2.3 percentage points to 8.8 percent.

Is the decline really good for Florida, though?

Economists don't share Scott's sunny perspective. Cheering the decline overlooks the real reason for it: a labor force contracted by the departure of thousands of workers, many of whom simply gave up looking for work.

"What we're seeing is that our participation in the labor force is declining," said Amy Baker, the Florida Legislature's top economist. "And because it's declining, that's really leading to much of the improvement — in the month of July, about 91 percent of the improvement — in the unemployment rate."

A September report by Baker's team at the Office of Economic and Demographic Research highlighted the same trend: dropping unemployment rate caused not by job creation, but almost exclusively by a shrinking workforce. People tend to leave the labor force when they become discouraged with the process of trying to find work.

Florida ranks last in the nation when it comes to long-term unemployment, so economists say the shrinking labor force is a natural result. More than half of the 816,000 jobless people in Florida have been looking for work for six months or more, a national record, according to a recent Florida International University study.

Absent the labor pool's contraction, the unemployment rate would be 9.8 percent, Baker's report found. A report from Scott's Department of Economic Opportunity found that if the state's 94,100 discouraged workers were added to the unemployment rolls, the jobless rate would be 9.7 percent.

That's because Florida's job growth rate has been mediocre when compared with other states. The state has added 69,900 jobs in the past 12 months, a growth rate of less than 1 percent. This growth is slower than the national pace; Florida ranks 28th in the nation.

It's not always a good sign when a state sees a rapid decline in the unemployment rate, said Sean Snaith, an economist with the University of Central Florida.

"You need strong economic growth to bring down rapidly the unemployment rate in the way we want to see it decline, and we haven't seen that strong economic growth," he said. "This is the contradiction in the unemployment rate: Just because it's going down doesn't mean it's good news."

Our ruling

Scott reassured Florida's economic development leaders, "We have every reason to brag about what's going on in our state."

We found his example of the plummeting unemployment rate over 20 months is not something to tout.

Experts say the reasons behind the drop are mostly grim: Thousands of discouraged workers have given up on finding work in Florida.

The shrinking workforce can be attributed to a number of factors, but the fact that Florida is last in the nation when it comes to long-term unemployment can't be ignored. A major factor in the drop in unemployment is the exodus of people who have simply given up looking for work. Job creation, meanwhile, has been below-average.

So is the unemployment rate decline a positive economic sign for Florida? We say Mostly False.

PolitiFact Florida is partnering with 10 News for the 2012 election. See video fact-checks at PolitiFact.com.

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