Florida’s economy lags behind nation; low wages contribute

Florida workers were hit hard by the Great Recession and the economic recovery is coming to them more slowly than their counterparts in other states across the nation, according to a new report, the State of Working Florida.

The rise of low-wage industries, the report states, are negatively affecting the economy, even as they help it to recover.

The study, released Sept. 2, Labor Day, by the Research Institute on Social and Economic Policy, traces Florida’s recent economic history. Five years ago, the state was hit harder by the recession, due especially to the Miami construction industry. A couple years later, Florida was leading the nation in negative economic indicators, and now the state’s recovery is one of the worst nationwide.

The report lists a number of statistics showing the state’s dire situation. Florida worker makes $1,000 less annually than in years prior. In addition, the state now leads the nation in long-term unemployment; 53 percent of all unemployed workers in Florida have been out of work for more than six months. The national average is 43.7 percent.

Florida has seen some recovery: 13.5 percent of jobs lost during the recession were recovered. But that figure pales in comparison to the rest of the nation, where 34.6 percent of lost jobs were recovered.

Currently, about 1 in 10 Florida workers are looking for a job. In Florida, this isn’t because the workers are mismatched with current job openings – there simply are not jobs available. There are 4.5 job seekers for each job available in the first half of 2012, the report states. While this number varies across industries and trades, not a single sector of the economy had more job openings than applicants for employment.

Underemployment rates in the state are more than 17 percent, meaning that about 1 in 6 workers are either “unemployed, working less hours than desired, or waiting on the sidelines.”

The private sector is in some ways at the mercy of the public sector, which has been slashed by GOP Gov. Rick Scott and the extremely conservative legislature. “The jobs lost in the public sector have been heavily dampening the recovery,” the report says.

And while the recovery has been slow for all workers in all industries, it is still experienced unequally. The economy started to slightly improve relatively early for white workers, later for Hispanic workers – and not at all for black workers. In 2009, for example, unemployment rates for whites stopped going up in 2009, but did not do the same for Hispanics until two years later. And, according to SOWF, the highest rate of unemployment for white workers was still lower than the average for black workers over the past three decades.

Meanwhile, inequality has increased: the upper- and lower-income categories of the working class are further apart than they were in 1979, and since then “wage inequality between minority groups and [w]hites has only worsened.”

All of these factors, the report concludes, are leading to long-term stagnation for Florida’s economy and working people.

“Florida seems to be headed into another decade of jobless recovery, wage and income stagnation, more low-wage jobs, less public services, and more disparities between demographic groups,” says the report, which was authored by Bernardo Oseguera.

SOWF argues that raising wages is good economic policy, in that doing so would, aside from benefiting workers directly, stimulate the economy overall. Unfortunately, low-wage industries have been gaining ground at the expense of higher-wage industries such as manufacturing.

“It is important for policymakers to understand the value of continuing and expanding the support systems available to those who are out of work, including unemployment compensation, food stamps, and Medicaid,” the report concludes.

“These programs not only help families get through joblessness and economic hardship, but they perform an economic stimulus function of making sure that money is still circulating in the economy not just at the top end but for middle and low income workers as well.”

Photo: Zach Dill // CC 2.0