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Jesse Panuccio: Florida’s economic turnaround story was not written by chance

NOTE: This was written by Jesse Panuccio  in response to a column that appeared earlier on ContextFlorida.com and SaintPetersBlog.com and written by Dale Brill, “Hint to presidential candidates wooing Florida — it’s still the economy.”

Florida’s economy has witnessed a remarkable turnaround after being one of the hardest hit states during the Great Recession.  The statewide unemployment rate is at 5.6 percent as of April, down from a recession high of 11.2 percent.  The private sector is booming, with 865,600 jobs added in just over four years. Our private sector is growing at 4.1 percent, eclipsing the national growth rate of only 2.5 percent. Job demand — the number of unique job openings — has remained at or near record levels for months.

This economic turnaround story was not written by chance.  Policy matters.  Gov. Rick Scott has led the charge for economic policies that foster this kind of growth — lower taxes, streamlined regulation, and record investments in critical resources like infrastructure and education.  You can see the difference made by sound economic policy by comparing Florida to other states that have chosen a different path — of job-killing tax burdens, innovation-stifling regulation, and investments in the wrong priorities.

New York, a state with nearly the same population as Florida, has added 239,500 fewer private-sector jobs since December 2010 and has an annual growth rate of only 1.4 percent. Likewise, Illinois and Pennsylvania face anemic job growth of less than 2 percent. In fact, Florida’s annual job growth rate is tops among the 10 largest states by population — including our main rival for growth, Texas.

Despite this good news, some commentators still claim that the “economic health of the average Floridian” lags behind that of residents of other states. This is what Dale Brill claims in his recently published column, entitled “Hint to presidential candidates wooing Florida – It’s still the economy.” Brill cites a few of his own calculations, but he fails to mention the most basic economic indicators listed above.

And Brill also fails to mention that many of the jobs added in the past few years are in industries with good average annual wages, including nearly 180,000 jobs in professional and business services ($53,000 average annual wage) and 119,000 jobs in education and health services ($45,600 average annual wage). Combined, these job gains outpace those in the lower-paying leisure and hospitality industry (186,400 jobs).

Wage growth is an important goal, but basic economics (the law of supply and demand) dictates that wages grow when the labor market tightens. This is why jump-starting job growth was priority number one in Florida, and with nation-leading job growth and high job demand, there is reason to be optimistic about future wage increases in our state. Indeed, comparing April 2015 to April 2014, inflation-adjusted wages in the private sector are up nearly 2 percent, with construction industry wages up 4 percent, financial industry wages up nearly 5 percent, and leisure and hospitality industry wages up 5.6 percent.

If residents of other states are doing so well, one wonders why those states are losing labor force.

During 2014, for example, Illinois, Pennsylvania, and New York all shed labor force, while Florida added 187,000 people to the labor force and grew by about 800 residents per day. Brill suggests Floridians may become “uncomfortable” with “shifts in inflation-adjusted disposable income per capita.” But people vote with their feet and they tend to run to opportunity. Call it common-sense economics.

Today, the opportunity is in Florida, workers are flocking here, and it’s because of the common-sense policies we’ve pursued. So Brill is right to say that presidential candidates should speak to Floridians about their economic policy agenda — but they’d do well to tell us that they’d bring the Sunshine State’s policy successes to Washington.

Jesse Panuccio is executive director of the Florida Department of Economic Opportunity. Column courtesy of Context Florida.

 

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