Sunday, May 25, 2014

The Late Great Jobs Myth

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.


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 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.

See our post at for analysis, including claims related to retirements and workforce participation.

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.


  1. Skyboxes, huh? Sounds like disguised bribery. We need laws that outlaw that behavior. Wait... we have those laws, so why aren't the Republicans enforcing them on themselves? Could it be they are "fair and balanced"?

  2. speaking of bribery, Scott's appointment to the Expressway Authority has been charged with bribery... Scott Batterson.

  3. Wouldn't it be lovely if Batterson's testimony ended up indicting Rick Scott?

  4. This is one of the most one-sided, biased articles I've read in a good while.