Ten Years after the Financial Crisis - labor.fiu.edu · Central West Tot Unet1'ployfJU=!nt ti re:17.9% Central East Total Employment Share:19.1°Ai Total Unemployment Share:19.0%

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Center for Labor Research & Studies

FLORIDA INTERNATIONAL UNIVERSITY

Ten Years after the Financial Crisis The 16th edition of the State of Working Florida reviews Florida's economy a decade after the financial crisis that sparked the Great Recession. In 2009, Florida and states across the U.S. began to deal with the aftermath of the worst financial crisis in the country since the Great Depression. Throughout the state, homes were boarded up, credit dried up, jobs were lost, and millions of workers and their families suffered. This report seeks to answer the question, where are we a decade later?

The financial crisis was first observed by most Floridians in October 2007 when home sales peaked and then sharply declined as the housing bubble burst in Florida and around the country. Underlying the decline in home sales was a drastic rise the in the mortgage delinquency rate of single-family homeowners that led to both to a drop in housing prices and in the value of financial instruments that secured subprime mortgages.

In 2008, Lehman Brothers and Washington Mutual went bankrupt, the Federal Reserve took over the insurance giant American International Group, and the Federal Housing Finance Agency took over the mortgage companies Fannie Mae and Freddie Mac. By early 2009, the U.S. Congress implemented the $700 billion Troubled Assist Relief Program, the Federal Reserve lowered the federal funds rate to zero percent, the car manufacturers Ford Motor Company, General Motors, and Fiat Chrysler were bailed out, and Congress approved a $787 billion economic stimulus package known as the American Recovery and Reinvestment Act. The impact of these policy responses to Florida's labor force has yet to be explored.

September 2019

Authored by Alf R. Bustamante, Ph.D. Senior Affiliated Researcher Center for Labor Research and Studies Florida International University

Edited by Judith Bernier, Ed.D. Director Center for Labor Research and Studies Florida International University

Executive Summary 1

Part 1: Florida's Labor Recovery 2

Part 2: Florida's Industrial Recovery 10

Part 3: Closing the Gaps 16

STATE OF WORKING FLORIDA

This report finds that while Florida's workforce has largely recovered from the Great Recession, some groups have thrived while others continue to make up lost ground. Between the years 2009 and 2019, Florida's workforce has become increasingly racially and ethnically diverse, more educated, and older. While the labor market's industrial and geographical composition has remained relatively static, employment and wages have increased during the past decade.

As Florida's economy has become a knowledge-driven economy with an increasingly more diverse workforce, the economic gains have not been spread evenly. A tight labor market and increases in productivity have only led to modest wage gains while historically marginalized groups, continue to face disproportionately lower labor market outcomes. Therefore, this report provides policy proposals that Florida policymakers can implement to close the gaps that plague Florida's workforce and that were widened a decade after the financial crisis.

Key Findings:

..... Since January 2009, Florida's working-age population has increased by nearly 3 million people from 14.5 million to 17.5 million in July 2019.

..... Over the past decade the gap between Florida's labor force participation rate and that of the nation has widened from a difference of 2.6 percentage points to 3.9 percentage points to 59.1 percent and 63 percent respectively.

..... As of July 2019, more than 10 million Floridians were employed throughout the state while only about 394,000 individuals were unable to secure employment.

..... Nearly 2 million more people are employed in Florida than there was a decade ago, 10,010,447 as of July 2019.

..... The greatest number of jobs continue to be located in Florida's Southeast Region, about 31 percent, followed by the Central West and Central regions with 19 percent and 18 percent respectively.

..... The highest average hourly wage among MSAs in 2018 was in Jacksonville at $27.61.

..... The share of workers aged 55 and older has increased from 20.8 percent to 25.3 percent, thus reflecting the aging of the broader population.

..... Between 2009 to 2018, the prime-age worker share of the labor force declined by four percentage points from 67.2 to 63.2 percent

..... The share of the labor force comprised by white workers declined from 61.1 to 53.5 percent while the share of Hispanic, African-American, and Asian/Pacific Islander workers increased.

..... From 2009 to 2018 the share of workers with a Bachelor's degree or higher increased from 30.2 to 35.5 percent.


..... In 2018, white workers had an unemployment rate of 2.8 percent compared to 6.4 percent for African Americans.

..... The disparity in unemployment rates between college and non-high school completers is 2.2 and 7.1 percent respectively as of 2018.

..... The largest employing industries in the state continue to be Professional and Business Services, Leisure and Hospitality, Retail Trade, Health Care and Social Assistance, and Government. Together, these five industries account for nearly 68 percent of all jobs in the state in 2018, over 6.1 million jobs.

..... Since 2009. Leisure and Hospitality continues to have the lowest average hourly wage among major industries:, $15.71 per hour in 2018.

..... Statewide, the average hourly wage for private industry was $21.61in2009 and $24.81in2018 .

..... The main industries contributing to Florida's GDP are Real Estate and Rental and Leasing, Government, and Health Care and Social Assistance .

..... The main MSAs contributing to Florida's GDP continue to be the Miami-Ft. Lauderdale-West Palm Beach metro, Tampa-St. Petersburg-Clearwater metro, and the Orlando-Kissimmee-Sanford metro. Together, these three metro areas contribute 63.6 percent of all GDP to the state, nearly two-thirds.

..... Increasing the state minimum wage will raise the earnings of workers in low-wage industries while also improving the earnings capabilities of those without higher levels of educational attainment.

..... Increasing state funding to public education, both K-12 and higher education institutions, will create family-sustaining jobs while developing the industrial capacity of areas throughout the state that are in dire need of investment.

EXECUTIVE SUMMARY 1

Florida and U.S. Monthly Unemployment Rate: Jan. 2009-July 2019 {Seasonally Adjusted) 2009 2010 l 2011

,11.3%

11%

lQ.OO/o 10%

9%

Cl> 8. %

...... ro ... 8% ...... c: Cl> 7.8% E >-0

7% -a. E Cl> c:

::> 6%

So/o

4%

3%

2012 2013_~2014 2015 2016 2017 2018 2019

Flor da

Uri:ed States

.........., '-e -~

3.3%

Source: U.S. Bureau of Labor Statistics: Local Area Unemployment Statistics and Current Population Survey

While the share of the working-age

population that is employed has

declined, the absolute number

of employed persons in Florida

has risen dramatically while the

Nearly 2 million more people are employed in Florida than there were a decade ago

number of unemployed persons has dropped sharply. As of July 2019, more than 10 million Floridians were

employed throughout the state while only about 394,000 individuals were unable to secure employment. Nearly

2 million more people are employed in Florida than there were a decade ago. Similarly, the number of

unemployed persons in the state has been reduced by more than half during the same period.

STATE OF WORKING FLORIDA FLORIDA LABOR RECOVERY 4

Florida Monthly Employment and Unemployment Levels: Jan. 2009-July 2019 (Seasonal ly Adjusted)

.., c (I)

E

10,000,000

9,500,000

>-0 9,000,000 ~ 0. '

700,000 ~-00

600,000

500,000

400,000

2009 2010 2011 2012 2013

Source: U.S. Bureau of Labor Statistics: Local Area Unemployment Statistics

The increase in total employment has

not led to shifts in the relative location

of jobs. The greatest number of jobs

continue to be located in Florida's

Southeast Region, about 31 percent,

2014 2015 2016 2017

----------------

2018 2019 ...

' 0 ...... 0 0 ......

Three regions account for about two-thirds of all the jobs in Florida

followed by the Central West and Central regions with 19 percent and 18 percent respectively. Together, these

three regions account for about two-thirds of all the jobs in Florida - the remaining five regions account for the

additional third of jobs.

........ ·····z.

\

Florida Employment and Unemployment Shares by Region: Dec. 2018 (Seasonally Adjusted)

• . •

\ . .

! ! ··. .

--- -· •••• j \ l ..

---· ·-

Panhandle North

..... ·-· .-•

Northeast Total Employment Share:7.6% otal Unemployment Share:7. 3%

Tota l Unemployment Share:4.8

Similarly, hourly wage patterns have

varied by metropolitan statistical area

(MSA) since 2009. The highest average

hourly wage among MSAs in 2018 was

in Jacksonville at $27.61. Jacksonville

The highest average hourly wage among MSAs in 2018 was in Jacksonville at $27.61

experienced the greatest average wage increase among the 22 MSAs, an increase of $7.09 in the past decade.

Florida's lowest average hourly wage in 2018 was in the Sebring MSA at $17.46. in 2018, 12 MSAs had an

average hourly wage above $22.50 while 10 MSAs were below.

Annual Average Hourly Earnings by Metropolitan Area: 2018 (Not Seasonally Adjusted)

i I . • . I I • . • • • .

' . . ' • . · .

r---r= .... e·w:ftW~lton Bch-Destin MSA $ .

Pensacola-Fe;;./1~~~ iifsAl acksonville MSA $21.75 Panama t y MS $27.61

$19·27 Ocal~~s Gainesvi lle MSA c$21.4 Deltona-Daytona Bch-Ormond Bch MSA

$22.36 e-Village SA $21 52 Homosassa -Spn ngs MS~ ·

$22.33 Orla ford MSA

La Tampa-St Petersburg-Clearwater MSA

r.alm Bay-Melbourne-Titusvi lle MSA

SA $23.70 ~ Sebastian-Vero Beach MSA

$26.65 =~............. $20.90 North Port-Sarasota-Bradenton MSA

$24.66 '~-t.....J Punta Gorda MSA ""'

Port St Lucie MSA

$21.89

$22.59 Cape Coral-Ft Myers MS

$22.77 Naples-lmmokalee-Marco Island M

$25.44

Source: U.S. Bureau of Labor Stat istics: Current Employment Statistics

Additional changes in Florida's workforce

since 2009 are apparent in the composition

of the labor force. For example, the share of

workers aged 55 and older has increased

from 20.8 percent to 25.3 percent, thus

.... .·

-Ft. Lauderdale-West Palm Bch MSA

$24.30

The share of workers aged 55 and older has increased from 20.8 percent to 25.3 percent

reflecting the aging of the broader population. While the population aged 16 to 24 has remained relatively

constant at around 12 percent, the share of the labor force that is considered prime-aged, 25 to 54, has

declined. Between 2009 to 2018, the prime-age worker share of the labor force declined by four percentage

points from 67.2 to 63.2 percent. This trend is particularly alarming given the overall size and importance of

prime aged workers to the labor market. Prime-aged workers have the highest labor-force participation rate

among the different age groups and their relative decline should serve as a bellweather to the underlying

problems associated with the broader decline in labor force participation among Floridians.


Florida Labor Force Share by Age Group: 2009-2018 (Seasonally Adjusted)

70%

~ ~ 60°/o I/)

QJ

~ .E 50% '-0

.D ro

...J 40°A>

30%

20o/o

10%

0%

0.8%

2009

21.2% 22.5% 23.2%

2010 2011 2012

25 to 54 years old

23.4% 24.0% 23.6% 24.4% 25.3~

55 years and older

2013 2014 2015 2016 2017 2018

Source: Economic Policy Institute. 2019. Current Population Survey Extracts, Version 0.6.11.

The workforce in Florida has also undergone

a shift toward greater racial and ethnic diversity

between 2009 and 2018. During that period,

the share of the labor force comprised by

white workers declined from 61.1to53.5

White workers declined from 61.1to53.5

percent while the share of Hispanic, African-American, and Asian/Pacific Islander workers increased. The

greatest increase was by Hispanic workers who experienced a labor force share increase from 21.4 to 26.9

percent.

Florida Labor Force Share by Race/ Ethnicity: 2009-2018 (Seasonally Adjusted)

100% 2.5~ 2.4% 2.5% 2.9°Ai 3 .2°Ai 3 .0% 2.7% 3.lo/o 3 .~ 3.1 o,u Asian/Pacific Islander

.14.2% 14.4% 14.4% 13.9% 14.6% 15.1% 15.3% 15.1°Ai 15.0% 15.4% 900!0

Black/ African American

80% 21.4% 22.0o/o 21 .2% 23.6°/o 2 2.8% 23.40,{> 26.0% 26.7% 27.0°A> 26.9%

70°/o Hispanic/ Latino

QJ '-ro 60% ..c 1.1% 60.4% 61.0% I/) QJ 58.6% 58.4% 57.4% u

53_5qJ '- 55.0% 54.0% 53.5% 0 50% -'-0

.D ro

...J 40%

30% White

10%

0%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018



While modest, Florida's labor force has increased in its relative share of college educated workers. From 2009

to 2018 the share of workers with a Bachelor's degree or higher increased from 30.2 to 35.5 percent. The share

of workers without a college degree, with a high school degree, and without a high school degree or declined

during this period.

Florida Labor Force Share by Educational Attainment: 2009-2018 (Seasona lly Adjusted)

100% 30.2% 31.0% 31.7% 31.3% 33.2% 33.0% 32.2% 32.7o/o 35.5%

90%

80% Bachelor's degree or higher

70% 31.1% 30.6% 30.6% 31.5% 30.6% 30.5% CIJ 30.0% 30.0% 30.4°16 ... 28.6% ro 60% .i::

U)

CIJ u ... 0 50% ..... Some College ... 0 .0 ro ..J 40%

29.7°.-t> 29.6% 29.6% 29.3% 29.7% 28.9% 28.6% 28.9% 28.9% 28.7% 30%

High school

20%

10%

0% .oo,o 8.9% 8.1% 7.9% 8.1% 7.9% 8.4%

Less than high school 8.4% 8.0% 7.2°

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018


A persistent feature of Florida's labor

market continues to be the disproportionately

higher unemployment rates of African

Americans. In 2009, African American

workers endured an unemployment rate

Disproportionately higher unemployment rates of African Americans

of 15.4 percent compared to 8.9 percent for white workers. While unemployment rates declined for workers

across all demographic groups since 2009, the relative disparity between African American workers and white

workers increased. By 2018, white workers had an unemployment rate of 2.8 percent compared to 6.4 percent

for African Americans. As a result, African American workers are more than twice as likely as their white

counterparts to be unemployed.


Florida Annual Unemployment Rate by Race/ Ethnicity: 2009-2018 (Not Seasonally Adjusted) 17.0%

17%

16%

15% 15.4o/o

14% 13.6%

13%

QI 12% 10 ~ 11% 11.6%

11.1%

QI

~ 10% 10.4% 0 - 9 .1% c.

9% 8 .9o/o E QI c:

8% ::::>

7%

6%

5%

4%

3%

2009 2010 2011 2012 2013 2014 2015 2016

All

Black/ African American

Hispanic/ Latiro

White

2017

3.6% 2.8%

2018


The unemployment rate disparities by

educational attainment are also problematic.

While workers with some college education

are about as likely as the average worker

to be unemployed, 3.9 and 3.6 percent

Need to • increase educational outcomes vulnerable children

the of

respectively, the disparity between college and non-high school completers is 2.2 and 7.1 respectively. The latter

is evidence of the need to increase the educational outcomes of vulnerable children and shore up the educational

attainment of disenfranchised adult workers.

Florida Annual Average Hourly Earnings by Industry: 2009-2018 (Not Seasonally Adjusted) • All

Bachelor's or higher $30 • High school

• Less than high school

$28 • Some college

Ill Ol

$26.95

$26

c: $24 IB $23.57 >- $23.16 -,,_

gi $20.71 a; $20 > ~~ - 24.81 = __ _.....

20.43

2011 2012 2013 2014 2015 2016 2017 2018



Florida Quarterly GDP: 2009 Ql-2019 Ql $1,072.7

7% $1,050

60,(i

5% Iii' $1,000 c: 4% 0 ·--- 2.9% ·-..0 3% -,,......

Q. $950 0 2% l!) - Q) ...,, ...,

Florida Quarterly GDP by Industry: 2009 Ql-2019 Ql (Top 10)

$180

$170

$160

,...... $150 I/)

.2 $140 ·-~ $l30 $126.5 Cl. g $120 t:: $110 ::J -0 e $loo Cl. u ·- $90 t: Cll E $80 0 0 I/) $70

$96.9

50 49.4 47.6

36.1 $30 34.8

$29.6 $20

--

$178.2

$114 .7

$92.4

$79.9

:::::~:::~':':::::::::::::::~~~:: $77 .3 =--- - $76.3 ---------=::: $62.4 ...... $58.6 --

$57.5 $48.6

2009 Q2 2010 Ql 2010 04 2011 03 2012 02 2013 0 1 2013 04 2014 03 2015 02 2016 Ql 2016 04 2017 03 2018 02 2019 0 1

Source: U.S. Bureau of Economic Analysis: Quarterly Gross Domestic Product by State


A.ccorr'Tlodatio'l anc ~ood services

Construc:ion

Fiiia'lce arc;, i nsurance

Governrren~ and governmer1: enterpr ses

Healtti care and soci al assista"ce

Marufacturi ng

Professional scie11tif1c, and ::echnical services

Real estate and rental and leasing

Re::ail trade

Wtio esale t"'ace

FLORIDA INDUSTRIAL RECOVERY 13

Florida Quarterly GDP by Industry: 2009 Ql-2019 Ql (Bottom 10)

,-... I/)

$45

$40

·- '---' ..0 -~ $30 $29.0 -...... ::l $25 -0 e 't $21.2 ·µ $20 $19 .9 I/) ~ .......... _______ __ !5 $16 .5-----/ /'-.....---........----,.,........_--._.,,,........_ _______ '-_ ~ $15 - - - - - ..,......__:-:._ _ _:=------

~$36.9

$27.9

$17.7 ,,.--=------ $17 .5

$16.5

0 $ -----,_ 11 .8------:::::::::::::=::::::::~~-:-------------------------$11.1 l9 $10

ig:~ $

5 $5.8 ______ ........_ _______________ ./--.-.......-------....---$6.2

$0 $1.3---------------- -------------------- $1.2

2009 Q2 2010 Ql 2010 Q4 2011 Q3 2012 Q2 2013 Ql 2013 Q4 2014 Q3 2015 Q2 2016 Ql 2016 Q4 2017 Q3 2018 Q2 2019 Ql

Source: U.S. Bureau of Economic Analysis: Quarterly Gross Domestic Product by State

Aaministrat ive and support and \lvaste ma .... agemer.t and remediaiion services

Agricult ure, ~orestry, f ·shing and hun::ing

A'1:s, entertair-ment . and recrea::;on

Educat ional services

• lr::formatio,..

The main MSAs contributing to Florida's

GDP continue to be the

Managerren:: of corrpa,..ies and enterprises

M inif"lg, quarrying, and oi l and gas ext ractio-

Ot er serv·ces l exceot go,1ernment and government enterprises)

- rarsportatiori and vvare:-ousing

Jtilities

Miami-Ft. Lauderdale-West Palm Beach

metro, Tampa-St. Petersburg-Clearwater

metro, and the Orlando-Kissimmee-Sanford

Metro areas contribute 63.6 percent of all GDP

metro. Together, these three metro areas contribute 63.6 percent of all GDP to the state, nearly two-thirds.

The latter is an increase from 62.7 percent in 2009. As a result, there is evidence that Florida's large metro

areas are increasingly concentrating the state's economic output.

STATE OF WORKING FLORIDA FLORIDA INDUSTRIAL RECOVERY 14

i . .

Florida Annual GDP Share by Metro Area: 2017 ! . ..

l ....----,.-----.· ··-··- \

• Crest iew·Ft Walton Sch-Destin MSA

: 1.::::1 ~ 5% Pensacola-Ferry Pass-Bren·-·~ Tall~~e

Jacksonville MSA 7 .8%

MSA Gainm leMs A

} 1.3J6 1 MS~ Deltona-Daytona Sch-Ormond Bch MSA L 0.9% 1.8%

l.S% Panama City MSA 1.7%

0 .9%

Tbe V."lla ~ Homosassa Springs MSA

0.3°A> Ori

Tampa-St Petersburg-Clearwater MS

nJc·. 1ssimm 1 nford MSA "L.13.5° Palm Bay-Melbourne-Titusville MSA

14_90,.n Lak.e1a1n inte~ave SA 2.2% 2.2% .,___,, Sebastian-Vero Beach MSA

l'--+,:;~:;---i:. ... ~ Se 0.6%

North Port-Sarasota-Bradenton M 3.2%

Punta Gorda MSM~

Port St Lucie MSA 1.4%

0 .4% .. Cape Coral-Ft Myers MS

2.9% Naples-lmmokalee·Marco Island MSA

1.9% -Ft. Lauderdale-West Palm Bch MSA

35.2%

The-8illld1Thl1 ,.,,. ... ..

Source: U.S. Bureau of Economic Analysis: Gross Domestic Product by Metropolitan Area

STATE OF WORKING FLORIDA FLORIDA INDUSTRIAL RECOVERY 15

Closing the Gaps

Since 2009, Florida's labor market has strenghtened while economic activity has flourished. However, too

many Floridians have been left out of the last decade's growth. In particular, less educated workers have been

deprived of the wage gains and employment opportunities of their more highly educated counterparts. Similar

disparities exist between workers in Leisure and Hospitality and workers in other industries. Furthermore, the

increasing concentration of economic activity in high paying jobs in Florida's larger metro areas means that

less populated areas throughout the state are getting left behind.

Two policy interventions can address these disparities and improve the lives of Floridians throughout the

state. First, increasing the state minimum wage will raise the earnings of workers in low-wage industries while

also improving the earnings capabilities of those without higher levels of educational attainment. Furthermore,

increase the state minimum wage will provide less densely populated areas with greater economic activity that

should stimulate local economies. Second, increasing state funding to public education, both K-12 and higher

education institutions, will create family-sustaining jobs while developing the industrial capacity of areas

throughout the state that are in dire need of investment. Increasing state funding to public education will have

the direct added benefit of improving the educational outcomes of existing workers as well as enable much

needed investments in the future workforce. Together, increasing the state minimum wage and state funding

to public education will promote growth and broaden access to economic prosperity throughout the state.

STATE OF WORKING FLORIDA CLOSING THE GAPS 16

For more detailed data, methodology, and resources related to State of Working Florida 2019,

Center for Labor Research & Studies

FLORIDA INTERNATIONAL UNIVERSITY

Florida International University Modesto A. Maidique Campus Labor Center, Room 304 11200 SW 8th Street Miami, FL 33199

(305) 348-2371 e-mail: [email protected] labor.fiu.edu

Connect with us!

please contact the Center for Labor Research and Studies at Florida International University.

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Ten Years after the Financial Crisis - labor.fiu.edu · Central West Tot Unet1'ployfJU=!nt ti re:17.9% Central East Total Employment Share:19.1°Ai Total Unemployment Share:19.0%