I just updated this post which originally appeared on my "Rick Scott Must Go" blog, and will now put it here as well as part of a planned series on the Seminole Democrat blog expanding on my list of 200+ reasons to dump Scott. This is an expansion on the whole "jobs" myth that surrounds Scott.
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Updated 5/25/2014.
No doubt the centerpiece of Rick Scott's re-election campaign will be the
claim that he vastly improved Florida's employment problem. He ran on a
platform of job creation, and even made it his "report card."
That he has improved this situation is a mythology that has been disproved
with ease. But we will collate the information on that here for the reader's
ease, as well as discuss whether the Scott administration has ever dealt with
the reality rather than the mythology.
Let's start with the base figure that's always at the forefront -- the
unemployment rate.
No
one would dispute that Florida's raw unemployment rate number has gone
done since Scott took office. In January 2011, it was 10.9% The latest
available number as of this original writing, in August 2013, is 7
percent. In January 2014, it was at 6.1%. In March 2014, it went up to
6.3% -- which should be kept in mind for later. The latest statistic,
for April 2014, has it back down to 6.2%.
For the sake of argument, let's assume that this reflects a real gain in
employment for people, and nothing else. Does credit fall to Rick Scott for
that drop?
To begin, we should admit that there's plenty of debate over just how much
any particular single official can change the unemployment rate -- whether a
governor or a President. There are so many other factors involved that for a
single person to take credit (or blame) is too simplistic. We don't need to go
into that in detail, though, because a much broader number shows this to be the
case all by itself, and makes a mockery of any attempt by Scott to take credit.
During
the same time, the national unemployment rate dipped from 9.1% to 6.3%
(in April 2014, the latest number I found as of this update). The
obvious
point is that Florida's lowering unemployment rate undoubtedly must have
some
connection to the nationwide rate being lower, too. And while Florida's
number
has been substantially better in proportion for part of this time, this
does demonstrate that it is in some
measure a function of Florida's participation in a national economy.
(The April 2014 number is only 0.1% different, which makes this even
more clear.)
This
point is highlighted by something recorded by Politifact when checking
Scott's promise to bring 700,000 jobs to the state of Florida. With
respect to that promise, they noted:
That goal, of course, was that his 7-7-7 plan would create 700,000 jobs
on top of what state economists predicted the economy would churn out
anyway as it recovered from a painful recession. At the time, they
predicted the state would add 1 million jobs by 2017 regardless of changes in policy.
In
other words, regardless of who Florida elected as governor, economists
expected the normal economic patterns to add a million jobs to Florida's
market. That should actually have been somewhat embarrassing to Scott,
inasmuch as his promise to add 700,000 could be read as a promise to
create less jobs than should have been made.
But the black humor of that aside, Politifact notes that when confronted with this point, Scott modified his promise:
Scott promised during his campaign for governor
to create 700,000 jobs in seven years as part of his signature plan to
jumpstart Florida's economy. As we've written several times before, the
extra jobs were to be in addition to those jobs economists predicted
would be created no matter who was elected governor (Scott has since back-tracked on that condition).
This
is a point that should not be forgotten. Scott clearly modified his
promise unthinkingly when confronted with the fact that his "700,000"
promise was actually a lower estimate of how many jobs would be created
under any circumstances. He changed it so that he promised, in effect,
to create 1.7 million jobs. Now he has quietly "forgotten" that
modification.
He has openly
deceived Floridians on one of his most critical promises, one that most
strongly affects the lives and welfare of the people of this state, and
the ones thing which most likely contributed to his election. This is
both unconscionable and unforgivable.
But let's return to the
matter of jobs created as part of a normal cycle, and why it is a false
step for a governor to take credit for them. Here's a practical
example. If Company X in Texas (where unemployment is even lower
than it is in Florida) is doing well, so that it opens an office in
Florida
with 100 employees, then those 100 employees will help make Florida's
unemployment rate go down. But it would be ludicrous for Rick Scott to
simply
take credit for the corresponding dip in the rate.
You may say, "Well, maybe Rick Scott asked Company X to open an office
here, or maybe they were drawn here by the great business climate he
created!"
Those possibilities can be granted, which is why I said "simply take
credit." You would of course need to show that this was the company's
reason for moving here. To illustrate, let me discuss an obvious example which
doesn't work that way.
Amazon Books, the huge online retailer, plans to open a warehouse in
Ruskin, Florida, which would create 3000 jobs by 2016. Scott was quick to take
credit for this:
"Amazon's commitment to create more than 3,000 new jobs in Florida is
further proof that we've turned our economy around," Scott said in a
statement.
"Amazon will continue to work with (state officials) on its
ongoing projects which will include a return on any taxpayer investment, and we
look forward to the company's announcements as it chooses locations."
But how much credit does he actually deserve for it? Don't be too quick to
give him much. For one thing, as Amazon has grown, it has made it so that it
would be absurd for them to not have a warehouse in Florida -- and that would
be the case no matter what state Florida's economy was in. Having a warehouse
in Florida can only be a help to Amazon in distributing its goods in a market
with a dense population where they no doubt get a lot of orders:
More significant is being close to customers. Amazon currently has to ship
orders to Florida from out of state, making it difficult to do next-day
delivery or start grocery service.
For another, the build is inspired by tax incentives from Hillsborough
County. Scott certainly can’t take any credit for that.
So what role did Rick Scott play in this affair? At first, his role was
actually that of a blocker. He initially rejected the deal because it would
have compelled Florida citizens to pay tax on purchases from Amazon. He was
caught between two of his professed priorities: low taxes and jobs. Jobs won
out. Whatever the virtues of that flip-flop, Scott's only clear role has been
that of a negotiator. That's a role that could have been fulfilled by any
sitting governor. What is lacking is clear evidence that Amazon would not have
come to the state at all, unless Rick Scott had acted. And that is far from
clear. Nor may it be forthcoming:
The Scott administration, however, as well as the department have refused
to release any documents tied to its conversations about an agreement with
Amazon.com. The department contends that any information related to a
"particular taxpayer" is confidential. A spokeswoman has said whether
the "taxpayer" actually pays taxes is "not relevant" and
the department can withhold all information that identifies a company.
With the complexity of taking credit in mind, let's now take a closer look
at why that unemployment rate number went down. There are three numbers that
need to be checked as well: The total jobs gained or lost; the total workforce,
and the long term unemployment rate. A focus on the unemployment rate alone can
obscure the reality all too easily, as this 2012 source explains:
On its surface, it's great news that Florida's unemployment rate in January
(the news was released by the state Tuesday) dropped to 9.6 percent from 9.9
percent in December. That momentum, though, was muted in the same report saying
Florida had lost -- not gained -- 38,600 jobs in January. That's more jobs lost
than in any other state in January and more than four times the 9,000 jobs lost
in Pennsylvania, the next state after Florida with the greatest loss of jobs.
It seems counterintuitive that the unemployment rate could drop while total
jobs also dropped. The reason for this has been observed repeatedly: The
unemployment rate can also drop because frustrated job seekers drop out of the
market.
The Scott administration has kept its focus on two numbers that seem the
most beneficial: That basic unemployment rate, and total jobs added. We've seen
why the first one needs to be looked at with a critical eye, and recent events show this even more. As we noted, in March 2014, the rate ticked up 0.1%.
When confronted with this, Scott immediately said the uptick was due to
more people entering the workforce. Again, keep this in mind for later.
But there's also
more reason to look critically at the second factor, total jobs: Total jobs added doesn't always
mean jobs added for Floridians.
It's one thing when a company like Amazon adds new jobs to the state's
pool. It's quite another thing when a company adds to the pool while also
taking away from the pool of another state. Let's say Scott lures Company Y to
Florida from New York, and they bring 600 jobs here. How many of those jobs
will come here already filled by people who lived in New York? (The much touted example of Hertz fits this mold.)
In
fact, Scott has a reputation for poaching jobs from other states.
Kentucky, Illinois, and Maryland are just
three states that were a subject of a campaign he put together to draw
jobs
away. But let's return to this issue: If 600 jobs come from New York,
how many of these jobs will go to Floridians who are currently
unemployed?
You may say, "Well, even if these jobs are poached, that at least
brings workers here who will spend money here and create jobs."
Well, apart from the questionable ethics of poaching jobs from other
states, you may consider that by angering other states, Scott reduces
incentives for people to come here for tourism and for doing business. Being a
jerk isn't the best way to ensure long term business relationships. By
poaching, Scott may be making himself look good in the immediate sense, but he
does so at the expense of Florida's future. And he'll be out of office when those damages come rolling in.
Another
point worthy of consideration is this one. Scott claims so far to have
created about 600,000 jobs (April 2014). But how many of those jobs are
actually "worth having"?
In
this area, we hear many anecdotes about this or that company coming to
Florida with 100, 500, or some other small number of jobs that pay well.
That's great, if any of them are actually going to be offered to
Floridians, and they aren't poached jobs. But none of these numbers
comes close to adding up to 600,000. The obvious question is, how many
of those are low paying jobs that won't support a family? How many are
"burger flipper" jobs?
Florida's
economy is centered on tourism, so to be fair, we would naturally
expect a lot of new jobs to be of that variety anyway. But conditions
should not be such that these are the basically the bulk of what is
being created. One source puts it this way:
Meanwhile, what growth there is has been generated in low-paying
jobs, such as in the tourism industry. From July 2010 to July 2011, the
largest number of new jobs created in the state came in the leisure and
hospitality industry, which pays average annual wages of $21,448. That
compares to $41,750 for all Florida industries, according to statistics
from the state’s Agency for Workforce Innovation. (Tourism is
historically a strong industry here. In 2006, the height of Florida’s
boom years, it grew 44 percent. This lagged behind the “enormous
growth,” 173 percent, in the higher-paying professional and business
services industry, according to a 2007 FIU study.)
Along with hotel workers, Florida’s job-creation machine is also
making administration and waste management services — with jobs such as
secretaries, office administrators, janitors and office cleaners — one
of the three fastest-growing industries, according to the “State of Working Florida,”
a study published in September by Florida International University’s
Research Institute on Social and Economic Policy in Miami. Between
January and July 2011, the state added about 14,000 of these jobs.
Meanwhile, jobs with benefits in higher-paying industries such as
information, finance and insurance, wholesale trade, along with federal,
state and local government, all saw negative growth.
And the surge in tourism and cleaning jobs doesn’t mean those workers
are getting paid any better. The bottom 20 percent of earners in Florida
have seen their wages actually drop, according to the FIU study, while
they went up modestly for the state’s top 20 percent of earners.
Adding
low paying jobs like these is nothing for Rick Scott to be proud of.
Yes, they will always be a necessary part of any state economy,
especially a state devoted to tourism. But when it comes to jobs people
can advance into in order to live the American Dream, the best Scott has
ever offered is news bites featuring 600 here, 200 there. That won't
help when it comes to the long term economic health or Florida and its
citizens.
That leads to the final point: The most telling number of all in this
debacle, which is the long term unemployment rate.
For the past several years, over 50% of Florida's unemployed have been out
of work for more than 6 months. Florida has ranked at the top of this statistic
among states during Scott's administration.
If you think about it, this adds up. Drawing jobs from other states, jobs
which are already filled by people from other states, doesn't take any of those
long term unemployed off the jobless rolls. At the same time, as noted, when
these long term unemployed give up looking for work, they are taken out of the
state's labor workforce, and are no longer counted when calculating the
unemployment rate.
Recently,
Scott's economic adviser Rebecca Rust has tried to salvage this debacle
by pointing out that many people retire in Florida, which could account
for many of those people who drop out of the workforce. No doubt it
does to some extent. But tellingly, Rust provided only speculation and
no hard numbers (e.g., number of retirees in Florida) to back up this
point. And clearly, she either cannot or will not quantify that number
or give us a measure of the true impact of retirement on the workforce
participation rate.
At the same time, it can be responded that:
* Many of those retirements were forced: People told that they could either retire, or be laid off.
*
The vast majority of retirees come from other states, which means that
although they may lower our workforce participation rate, this also
means that the more Rust attributes this to retirees, the more it also
indicates stagnation in the employment of working Floridians. That, in
fact, coheres far better with Florida's horrible long-term unemployment
rate.)
*
Migration to Florida by retirees has been part of the state's history
for a very long time. If what Rust says is true, then our workforce
participation rate should almost always have been low.
*
Boston College's Center on Aging and Work analyzes data in this regard
and showed that in 2008, 28.1% of Florida's population was over 55, and
of that group, up to age 64, 56.8% were employed. This leads to a point:
Not all "retirees" leave the workforce!
* Finally, while retirees are moving here, so are younger people.
The
bottom line is that Rust's claim needs much better quantification. More
can be found in a study by the Chicago Fed Letter, which says that just
under half the decline in workforce participation can be attributed to
retirements. That coheres fairly well with estimates that 50 to 60
percent of the unemployment rate's lowering has to do with frustrated
people leaving the workforce.
These factors are the most telling of all in terms of what Rick Scott has
-- or rather, has not -- accomplished in Florida. Now the question is: What
does he have to say about it?
Nothing. Aside from Rust's recent effort, he avoids the issue like the plague. Back in 2012 he avoided it to
the point of rhetorical violence:
Gov. Rick Scott on Tuesday cut off a journalist who tried to ask him about
a report from a top state economist who said Florida’s fall in unemployment is
almost exclusively due to people leaving the workforce.
“Mike! I said I’ve answered all your questions,” said Scott, briefly
abandoning his normally laid-back demeanor and raising his voice in response to
Bloomberg reporter Michael Bender.
The reporter had pointed out the findings of Amy Baker, the Florida
Legislature’s chief economist, which showed that Florida’s unemployment rate is
falling for a dire reason: a shrinking workforce...
When reporters questioned Scott about the unemployment rate on Tuesday, the
governor became elusive and dismissive. Here’s the partial exchange with
Bender:
Reporter: “Are you saying those numbers from the state economist are wrong,
Governor?”
Scott: “I’m saying we generated 130,000 jobs.”
Reporter: “But that’s not all of the—“
Scott: “Mike, I’ve answered all your questions on that.”
Reporter: “But, no, my question is about the unemployment rate drop—“
Scott: “Mike! I said I’ve answered all your questions.”
This
exchange should be brought up again and again and repeated any time
anyone touts Scott's jobs record. It reveals in nutshell the dishonesty
that
lies at the heart of his claims. It also reveals the bankruptcy of his
character in refusing to deal with it honestly, as tens of thousands of
Floridians suffer long term in joblessness. This is especially the case
because, as noted, Scott appealed to a growing workforce as the reason
why the rate went UP in March 2014. He denies this factor when it goes
against him, but calls on it with pleasure when he thinks it will help
him.
Let's not ever forget that conversation with Bender. It's a microcosm of why Rick Scott
must go.
Sources: Here, here, here, here, here, here, here, here, here, here, here, here, here,
To
round off this posting, here are a number of reasons Scott deserves to
be dis-elected from our featured list in another post, concerning jobs.
Jobs and Employment
Rick Scott
has made, and no doubt will continue to make, the creation of jobs his “report
card” for voters. However, while he has posed himself as a success in this
regard, he has actually been a failure, taking credit for achievements he did
not perform, and causing greater hardship in the lives of the people of
Florida.
1) Rick Scott has ignored his
original campaign promise, to create 1.7 million jobs.
Scott had
been campaigning, saying he would add 700,000 jobs to Florida’s economy. When
told that economists predicted a million jobs would be added by 2017 regardless
of who was governor, Scott quickly amended his promise by saying that he would
add 700,000 jobs on top of the 1 million jobs predicted. But he has let that
promise of 1.7 million jobs fall by the wayside, and still uses that 700,000 number
in public statements.
To make
matters worse, Scott later said he could argue that all he had to do to perform
satisfactorily is not lose any jobs – rather than create them. It is also
ironic that Scott’s promise of 700K jobs by 2017 would still have Florida with
200,000 fewer jobs than it had in 2008, and this even as Florida’s population
continues to grow.
2) Rick Scott has “created” many jobs
by poaching them from other states.
While
there’s nothing wrong with friendly competition between states, it goes too far
to poach jobs from other states. This sours relations with other states, who
will encourage their citizens to take their tourism dollars somewhere besides
Florida. Scott has poached jobs from
multiple states, including Illinois, Massachusetts, and Kentucky.
This would
include jobs poached with things like tax incentives to relocate. Incentives
should be to open new locations in a state, not move jobs to another state.
3) Rick Scott’s poached jobs do
nothing to employ out of work Floridians.
Jobs poached
from other states often come already occupied by a person from another state.
This means that by poaching a job, Rick Scott either causes someone in another
state to be out of work (if they cannot move with their job to Florida), or
else claims credit for creating a job in Florida that does not employ an out of
work Floridian.
4) Rick Scott has repeatedly
misrepresented the lower unemployment rate in Florida as part of his success.
Florida’s
unemployment rate has gone from a high of 11.4% in January 2010 to a November
2013 rate of 6.4%. But Scott cannot take any credit for this. Part of that
reflects the trend of an improving economy nationwide, where the jobless rate
has gone from 9.8% to 7.3% (October 2013) in the same period. But far too much
of it also reflects the fact that many frustrated Floridians are unable to find
jobs, and are leaving the workforce. One 2011 report indicated that 69 percent
of the lowering of the rate was due to Floridians leaving the workforce, not
finding jobs. A more recent report gave that number as 59 percent. But even 1%
is 1% too many. (By the way, this is not to deny that the nation as a whole
faces similar problems, nor to say, e.g., “This is Obama’s recovery.” I do not
give Obama any credit, either. The real credit for any level of recovery goes
to the hardworking people of this state and this nation.)
5) Rick Scott has misrepresented his
success by ignoring long term unemployment.
Reflecting
that so many have left the workforce, Florida also ranks among states with the
worst long-term unemployment rate in the nation. This shows that Scott’s
policies are not creating jobs. If any credit is to be given, again, it is to
the hardworking people of Florida, who have achieved a degree of recovery in
spite of Scott’s efforts to harm the state.
6) Rick Scott has misrepresented the
quality of jobs created in the state.
Though he
anecdotally highlights 50 jobs here, 1000 jobs there, brought to Florida by
something like a high tech company, the reality is that the majority of new
jobs in the oft-touted 400,000+ total are lower wage jobs.
7) Rick Scott’s creation of low wage
jobs costs Florida more money in the long term.
Persons in
low wage jobs don’t have as much money to pump into Florida’s economy, and many
require government assistance. Scott’s recipe is long term poison for economic
recovery.
8) Rick Scott has cut state workers’
jobs.
Although
touting himself as a job creator, Rick Scott has laid off thousands of state
workers – even though Florida has the lowest per capita rate of state workers
in the country (117 per 10,000 residents, versus 216 per 10,000 for other
states). Many of these were in critical areas like juvenile justice and social
services for children. In doing so, he threw these laid off employees headlong
into a terrible job market situation. Many would be compelled to draw on
unemployment or other social services to survive.
9) Rick Scott has hurt the long-term
unemployed by implementing a glitch-filled website for unemployment benefits.
As governor,
Rick Scott is ultimately responsible for the difficulties caused by the new
“Connect” website. Not only did this website overhaul cost $63 million, it has
also caused families in need to not receive unemployment benefits they needed
to pay their bills.
This is also
especially relevant because it reflects Scott’s indifference to quality in
terms of what private contractors he hires to do work for the state. The
company hired for the website revamp, Deloitte, has an extended record of
incompetence. (One excuse that has been made is that the state is required to
take the lowest bidder. This is not always true, but even if it were, Scott as
a businessman should have had the acumen to have that rule changed as soon as
possible.)
10)
Rick Scott lowered unemployment benefits by tying them to the state
unemployment rate.
Unemployment
benefits were tied to the state unemployment rate so that, the lower the
unemployment rate was, the fewer weeks benefits could be collected. The logic
was apparently that a lower unemployment rate means it should be easier to find
a job. But that is flawed because so much of the lowering unemployment rate is
due to frustrated people leaving the workforce.
11) Rick Scott has continually evaded
questions about the lower unemployment rate being related to people leaving the
workforce.
A typical
exchange on this was between Scott and reporter Michael Bender. However, he has
continued the same evasion of switching to the number of jobs added even to
this day.
12) Rick Scott has bragged about
reducing unemployment benefit payouts as though it were the result of his jobs
policy.
In reality,
payouts have been reduced because he has made benefits harder to get, and cut
the amount of time they are received. This includes the following:
13) Rick Scott has authorized the use
of a useless skills test when applying for benefits.
In reality,
the test does nothing to gauge job skills, and is a waste of 45 minutes for
people who need to be using their time looking for work and applying for
benefits to pay their bills. Scott’s administration has also spent millions on
its implementation.
14) Rick Scott’s tax incentive
schemes to bring jobs have a 96% failure rate, and have been countered by a
greater number of layoffs he has done nothing to stop.
Although he
religiously attends groundbreakings where there are alleged to be jobs coming,
because of tax incentives he supported, depth study of the results of Scott’s
efforts show them to be a dismal failure. An explosive series by two leading
newspapers in Florida gives these examples:
Of the jobs
Scott can influence most, only a fraction now exist. Scott has pledged $266
million in tax breaks and other incentives in return for 45,258 new jobs. But
96 percent of the jobs have yet to materialize, according to state data..
The total
number of new jobs Scott ultimately might deliver doesn’t offset the jobs lost
at companies with more than 100 workers in the same time period. Between
January 2011 and November 2013, large Florida employers reported 49,163
layoffs, according to federal data.
Nearly 14
percent of Scott’s deals — 46 in all — have collapsed for various reasons, the
state says, and more projects are dormant.
Florida
offers tax breaks in most cases only when a company creates the jobs it
promised, and $45 million sits idle waiting to be claimed by companies that
have not yet reached hiring goals.
Scott has
been so busy trying to “attract” jobs that he has failed to notice how many are
being lost at the same time.
149) Rick Scott is oblivious to the
difficulties an average unemployed person has in finding a job.
When asked
what he planned to do about the dysfunctional CONNECT website, Scott offered a
clueless reply, which reads as follows:
"The
state's unemployment website has been a disaster, what are you doing to make
sure this gets solved?" Brown asked Scott.
"First
off, the most important thing we can do is help people get jobs," said
Scott.
"What
do you want to say to the people who can't pay their bills right now because of
this?" Brown asked.
"Again, my biggest job is to make
sure people can get a job. We have 279,000 job openings in the state. We're
recouping money, holding money back from Deloitte to make sure it gets better
quickly," said Scott.
Scott answers as
though all one of the unemployed has to do, is walk outside and snag one of
those 279,000 open jobs. He does not even consider the fact that many of those
jobs have literally hundreds of applicants, dozens of them qualified. He also
does not consider that the unemployed are competing for jobs with others who
are still employed, but are looking for a new job because they don’t like their
current one. Finally, it is a point of fact that there are still at least three
unemployed people in Florida for every job available. Even if all 279,000 of
those jobs were filled, we’d have about 550,000 unemployed people left who
would need unemployment benefits. Scott clearly has lost touch with what it is
like to have to beat the path to look for work.
173) Rick Scott has dodged questions
about mis-spent money by Enterprise Florida.
From the
article below:
CBS 12 demanded 20 months worth of
spending from Enterprise Florida, Florida’s public-private economic development
machine.
Our Waste Watch investigation showed Enterprise Florida,
which is 97% publicly funded, spent tens-of-thousands of your tax dollars on
luxury sky boxes, upscale steakhouses, and at posh hotels, but created less
than half of the 200,000 jobs initially promised.
"These abuses of taxpayer money are just excessive and need to be reined
in," Dan Krasner of watchdog group Integrity Florida said.
Wednesday night, the Governor's office responded to our report with a
statement, "Governor Scott is laser focused on creating job opportunities
so that every family can pursue their dreams in the sunshine state."
Enterprise Florida continues to defend its spending habits, releasing a
statement less than 24 hours after our report aired. It said in part,
"Stadium expenditures were for site selection consultant events, key to
building relationships with corporate decision makers while promoting Florida
as a premier state for business."
Really? You
need a luxury skybox to build a relationship with some people?
179) Rick Scott evaded explaining why
Crist should be blamed for the 2008 recession’s effects in Florida.
In the State
of the State speech, Scott said:
Some say
these statistics were all because of a global recession. They say it doesn’t
matter who was running our state – that anyone would have been just a victim of
the times.
I disagree.
As Americans, our freedom and our optimism
make us anything but victims – even in the worst circumstances and the toughest
times.
Our leaders especially – and every person in
our state – are not simply bystanders in the arena of life where the hard
battles are fought and history is made.
He goes on like this for a
while, but the one thing he doesn’t do it explain what, exactly, Crist (or any
state governor) was supposed to do about a worldwide recession. Optimism won’t
pay your mortgage. Scott goes on about fighting battles and not being a victim,
but he never gets around to explaining what, exactly, ought to have been done –
because he can’t. The reality is that if he had been governor in 2008, he would
have been standing around with his jaw dropping the same as so many other
politicians.
