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Florida Chamber Foundation economist sees strong 2020 ahead

Job growth looks promising and chances of recession are low, Jerry Parrish says, but he adds that passing a constitutional amendment to raise the minimum wage to $15 an hour could hurt the very people it’s meant to help.

Florida’s chances of a recession in 2020 have dropped, and the state is in a position to add 200,000 jobs in the coming year, a statewide business group researcher said Thursday.

“I expect Florida to continue to create jobs at a higher rate than the U.S.,” said Jerry Parrish, the chief economist for the Florida Chamber Foundation, the research arm of the Florida Chamber of Commerce.

That’s been going on since 2012, he said, and “one of the reasons for this is that Florida’s been growing manufacturing jobs nearly three times faster than the U.S. as a whole.”

Last year, Florida saw fewer new residents — a net increase of about 640 a day — but Parrish said he expects the pace of population growth to return to the 900 new residents a day that have been the norm in recent years.

As recently as September, Parrish estimated that the chances of a recession had risen to a high of 38.1 percent, based on factors such as housing starts, unemployment claims, commercial airport activity, open jobs and consumer confidence as measured by the University of Florida’s Bureau of Economic and Business Research.

Floridians’ confidence in the economy ticked up in December

Now he sees the chances of a recession in the next nine months at 21.2 percent, largely because consumer confidence remains strong and the relationship between short- and long-term interest rates in the bond market no longer reflects investor uncertainly about the economy.

An ominous warning from the bond market

Parrish detailed what he sees as three principal threats to Florida’s $1 trillion economy. One was the short-term business uncertainty created by disruptions to international trade.

“Not knowing what tariff rate that goods will be subject to makes it difficult for Florida businesses to plan, and it causes businesses to hold off investing,” he said. “This is causing a reduction in our international trade as well. Nobody wins a trade war.”

Jerry Parrish, chief economist of the Florida Chamber Foundation (Courtesy of Florida Chamber of Commerce) [ SUSAN TAYLOR MARTIN | Jerry Parrish ]

In the long term, Parrish said a “big threat” would be to raise the state’s minimum wage to $15 an hour. If at least 60 percent of Florida voters approve Amendment 2 on Nov. 3, Florida’s minimum wage would rise from the current $8.56 an hour to $10 an hour on Sept. 30, 2021. After that, it would go up by $1 an hour every year until it reached $15 an hour on Sept. 30, 2026.

Saint Leo poll finds support for raising Florida’s minimum wage

If that happens, Parrish predicted some workers would be cut from full- to part-time employment and lose benefits, jobs would be lost and “some businesses will definitely close.”

“Increases in minimum wage sound like a good idea to many people, but what happens in a lot of cases is that it ultimately hurts the very people its supporters claim it will help,” he said.

Thursday afternoon, the Tampa Bay Times reached out to Orlando personal injury attorney John Morgan, who led the petition drive to get the question on the ballot, and the Service Employees International Union chapter 32BJ in Miami, which estimates that 200,000 Florida workers earn no more than the current minimum wage and millions more make less than $15. Neither responded to a request for comment.

Parrish said another long-term threat was the proposal to eliminate Visit Florida, which he said would hurt the state’s marketing and competition for wealthier tourists, in particular international visitors who stay longer and spend more. And that could cost the state jobs and significant revenue, he said.