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Behind Florida’s Deceptively Low Unemployment Rate

| March 29, 2016

florida unemployment participation rate

Preferring the forest to the more telling trees. (Giacometti’s ‘The Forest,’ 1950).

By Dominic Calabro

Florida’s unemployment rate is down almost half from the peak of 11.1 percent during the Great Recession.

While it is great news that the state’s annual unemployment rate was down to 5.4 percent in 2015, and down to 5 percent in January 2016, the numbers don’t tell the whole story.

An underlying factor that determines whether the job market is truly positive is the labor force participation rate (LFPR). The LFPR is the percentage of able-bodied adults aged 16 and over who are either employed or looking for a job. It is considered a more accurate representation of what really is occurring in the job market.

Florida’s economy and unemployment rate have made a miraculous turnaround. People are finding jobs to support their families and the state economy has made marked improvements since the Great Recession.

We serve Floridians far better by looking deeper at the structural and demographic impediments that may keep them from fully participating in the job market. The labor force participation rate should always be taken into account when determining the overall state of the job market and the economy.

The March Edition of Florida TaxWatch’s Economic Commentary finds that Florida’s labor force participation rate has fallen from 61.6 percent in 2010 to 59.3 percent in 2015. The rate has fallen due to numerous fluctuations in the labor market, including the fact that a large fraction of Florida’s population includes those who have retired and thus do not count as part of the labor force.

context floridaAdditionally, increased access to higher education has caused a decline in the labor force participation rate, as younger people attending college and those who go back to school are not counted as actively looking for work.

But not all people are retiring or studying. Discouraged workers hurt the labor force participation rate. They are people who have been unemployed for a long time and have stopped looking for a job completely. Florida TaxWatch found that during the last quarter of 2015, Florida had 55,700 residents who were considered “discouraged.”

Because these people are not actively looking for a job, they are not counted in the labor force participation rate, which lowers it along with the unemployment rate. Since the average citizen only pays attention to the unemployment rate, this creates an illusion of who truly is unemployed. Had these 55,700 people been actively looking for a job, Florida’s unemployment rate would jump by more than a half percent.

To encourage more people to look for work, Florida should continue to support programs like CareerSource Florida to help Floridians find high-paying jobs and gain valuable career experience. Additionally, making smart investments in economic development programs will bring top-tier companies to the state, increasing job prospects and improving wages.

The full report can be found here.

Dominic CalabroDominic Calabro is the President & CEO of Florida TaxWatch, a statewide, non-profit, non-partisan government watchdog and research institute for taxpayers. Calabro also serves as President and Chief Executive Officer of the Prudential Financial – Davis Productivity Awards Foundation, Inc. which recognizes rewards and replicates outstanding government productivity, and innovative cost-saving achievements throughout Florida government worth over $6.7 billion to date. Before joining TaxWatch in the early 1980s, Calabro served as an analyst with the Florida Senate Ways and Means Committee.

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10 Responses for “Behind Florida’s Deceptively Low Unemployment Rate”

  1. PCer says:

    The Conservative Media likes to say that our unemployment rate is inaccurate and use it as a device to get more votes. Those 55,700 people need to stop whining and go find a job or they need to re-educate themselves and find a new career. I would be willing to bet that many of those discouraged workers were once employed with skills that are no longer needed in the 21st century. Our economy is strong. People are working, people are able to retire, people are able to go to school (or pay for their children to go to school). Businesses are thriving and the housing market is on the mend. Thank you President Obama.

  2. Sue says:

    Florida’s unemployment rate is so flawed….so many people have left due to no jobs or underpaid jobs! The ones who have stade have maxed out unemployment benefits and are no longer on the books. It is a depressing place to be if you do not have a well paying job.

  3. ScotchRox says:

    A skilled construction worker that was laid off during the real estate bust getting a job flipping burgers
    or delivering pizza is not a positive upswing in the current unemployment rate…

  4. PCer says:

    That skilled construction worker should go back to school to learn a new skill. Sitting on a skill that is no longer needed is not an excuse. If people are underemployed, then it is their responsibility to go get a better job – or better yet – create one for themselves. There are plenty of opportunities, they just have to go find them. I know way too many people who purposely stay on disability or unemployment for as long as possible because they are too lazy or entitled to go find a new job.

  5. Knightwatch says:

    There’s no good news that Republican conservatives won’t dismiss as totally false, purposeful fraud or merely inaccurate. Must be tough to be permanently sour.

  6. Hammock says:

    The improving touted employment rate (U3 number) is phony to make the government look good. But the author stated if the able bodied people who are not collecting unemployment compensation is taken into account (U6 number) the unemployment rate would increase a half of a percent. Actually it would double. 12.6% Look it up.

    If the employment is so good now why is it the percentage of college graduates finding jobs has declined and if they do find full time employment the pay is a much lower percentage of the mean wages and falling. Same is true for high school grads and Black unemployment is horrid. Also if someone has 2 part time jobs that equal 35 hr a week they are considered full time.

    Much of the increase of part time jobs is due to Obamacare. Thanks Obama!

  7. confidential says:

    Yes I still can understand and justify this travesty of allowing a Canadian born TX senator to run for President…is beyond fraud to me as back then McCain illegibility was even questioned when he was born in territory (Panama Canal) of USA from both American parents and GOP worst yet lashed at Obama denying his birth certificate of Hawaii and now this naturilized of Cuban father, American mother born in foreign soil is allowed..? Counting also that he became and American Citizen practically for this campaign? Shameful selective/bias naturalization acceptance by GOP to run for POTUS! Don’t they have anything true American born to approve as one more for this campaign?

  8. Sherry says:

    Right On Knightwatch and PCer!

    I would add that, in addition to our work force getting up to speed on industries of the future, our governor who spent millions in tax payer money trying to attract companies to Florida, needs to actually deliver those “high paying” jobs he keeps promising! Jobs in restaurants and hotels will never pay the same as those he cut from teaching, policing, fire fighting, etc.

    Think of the jobs that could be created by building things like metro systems, sustainable (non-fossil fueled) energy systems, green technologies, bio-tech, etc. etc. But, NO. . . those kinds of industries come from those “Progressives”. . . and our “Tea Party” governor, Rick Scott and his henchmen are politically against our government leading us to a brighter future!

  9. Jk says:

    Well PCer I guess all of our Police and emergency personal should quit and find better jobs. After taxes, insurance, uniforms and other costs a large majority of them bring home less then 30,000 a year. Avg rent here is 10 to 15k a yr. plus utilities, car payments, insurance, groceries etc. etc. The same goes for restaurant servers, store cashiers, repair people and on and on. So all you people go back to school and let the Knightwatchers and PCers try and live without you!! They are living in gaga world.

  10. Dave says:

    Hey PCer, that skilled worked who was laid off can go back to school instead of fippling burgers to make ends meet,. but are you going ot pay his way while he pays rent or a mortgage, insurance, health care, food no doubt children school expense, car payment. I would think he would be happy if you took over his bills while he attends school to better his education.

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