Latest TaxWatch Report Finds There Is More Than Meets The Eye Behind The Unemployment Rate
TALLAHASSEE, Fla. - Florida’s unemployment rate is down almost half from the peak of 11.1 percent during the Great Recession. While the state’s current unemployment rate of 5 percent is good news, the number doesn’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,” said Florida TaxWatch President and CEO Dominic M. Calabro. “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. Additionally, 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 receiving a quality education. The labor force participation rate is negatively affected by discouraged workers. Discouraged workers are those who have been unemployed for a considerable period of 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.
“In order 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,” said Calabro. “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