Monday, November 23, 2009

Florida Unemployment Now Up to 11.2%, Highest Since 1975

According to the November 21, 2009 article "Florida Unemployment Now Up to 11.2%, Highest Since 1975" by the News Service of Florida:

News Service of Florida - Nov 21st, 2009
Florida’s unemployment rate for October inched up to 11.2 percent,, a level not seen since it hit 11.9 percent in May 1975, the Agency for Workforce Development (sic) reported Friday.

The figure, up 0.1 percentage point from a revised September figure, translates into 1 million jobless out of a labor force of 9.2 million. October’s rate was 4.3 percent higher than October 2008.

The figure, however, does not include workers who have stopped looking. Adding the long-term unemployed and the under-employed, economists say the jobless rate tops 17 percent nationally and is likely higher in Florida, which in October exceeded the national unemployment rate of 10.2 percent.

Economists say recovery from the “Great Recession” may be slower than previous rebounds and double digit jobless rates may be a reality until 2012. Florida may not return to pre-recession employment levels until 2014, said Sean Snaith, a University of Central Florida economist.

In the meantime, Florida will continue to suffer from a bloated pool of underemployed workers and discouraged job seekers who have stopped searching after meeting with little success.

“Once production increases, businesses will be able to meet the needs with the people they have,” Snaith said. “There is no need to go out and hire when you have people already working for you part time.”

Snaith’s view is echoed by others and based on the severity of the recession and the fact that it appears to have especially targeted small businesses owners, who may be too shell-shocked to rehire quickly.

“Smaller businesses are struggling to obtain credit; their principal lenders, small banks, face intense pressure, while another key source, credit card lenders, have aggressively tightened underwriting standards,” said Mark Zandi, chief economist with Moody’s in an October market analysis. “As a result, a growing share of job losses are occurring at small businesses.”

Florida’s total nonagricultural employment in October 2009 was 7.3 million; a job loss of 339,600, or -4.4 percent compared to October 2008. Nationally, non-farm employment fell 4.0 percent during the same period.

The October 2009 figures continue a trend of annual declines that began in August 2007. Florida’s rate of job decline has moderated over the last few months, moving from -5.4 percent in March 2009 to -4.4 percent in October 2009, AWI reported.

The state’s lingering unemployment rate remains the grist in a continuing argument over whether the state should accept an additional $444 million in federal unemployment benefits. As unemployment compensation payouts have surged, the fund from which benefits are paid has dropped below a legal floor that triggers an automatic increase in unemployment taxes.

Democrats this week used the opportunity to again call on Republican leaders in the House to take the additional aid – there was support for accepting the money in the Senate and in Gov. Charlie Crist’s office.

“These dollars will be spent helping families buy food, pay rent and will generally boost economic activity and retail business throughout the state,” said House Democratic Leader Franklin Sands, D-Weston.

House Republicans have balked at the stimulus money, saying it would expand unemployment benefits to workers not now covered and place more of a burden on state resources when the federal money runs out – which they say would be very quickly, maybe a couple months. Those newly covered people, however, would still qualify for the benefits, meaning the state would have to find a new source for the money.

A state economist said this week that while employers would have faced a smaller employment tax increase had the state accepted the $444 million, it wouldn’t have eliminated the deficit in the unemployment fund, meaning employers would still face an automatic tax increase.

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