Microeconomics ECO201

UNEMPLOYMENT RATE
Module 2 Assignment 2

LYDIA ROSS
9/19/2010
 Lydia Ross
Module 2 Assn2
Microeconomics ECO201
FLORIDA vs. DC UNEMPLOYMENT RATE

This paper discusses the differences in the unemployment rate of

Florida versus the unemployment rate of the District of Columbia. Florida
the home state has many examples observed, experienced and researched
presented. The District of Columbia (DC) on the other hand is the state that
Florida’s unemployment rate is being compared. For this reason, the DC
unemployment rate will have examples researched instead of actually
experienced. The unemployment rate of both states are presented in Table
1 and Graph 1.

%OFLABOR FORCE
STATE MONTH
Jul-09 May-10 Jun-10 Jul-10
DC 10.4 10.4 10.0 9.8
FLORIDA 10.8 11.7 11.4 11.5

MIAMI
N.MIAMI
KENDALL 10.8 12.4 12.2 12.3
Table 1

Graph 1

The Table 1 shows data for the unemployment rate for the months of
July 2009, May 2010, June 2010 and July 2010. According to the table, DC’s

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unemployment rate for July 2009 versus Florida for that same time period is
10.4% and 10.8% respectively. One year later, DC’s unemployment rate
has dropped to 9.8% while Florida’s has increase to 11.5%. What caused
the decrease for DC and the substantial increase for Florida. According to
Jeff Harrington, a Times staff writer, Florida’s unemployment rate increased
for the following reasons:

• “Credit conditions are tight.

• The traditional relationship between companies posting higher profits
and then adding jobs appears to be gone.
• Consumers are more frugal and, even if they wanted, can no longer
tap their home equity to spend like they used to” (Harrington, 2010).
• Outsourcing is one such practice where work is allocated to companies
which are based in less developed economies, to benefit cheaper
manpower hours. This practice has led to loss of job opportunities”
(Summers, 2008).

“Economists with the Florida Economic Estimating Conference predict the

jobless rate will top out at 11.8 percent in the third and fourth quarter
before beginning a very gradual retreat. The conference doesn't expect
unemployment to get back into the single digits until 2012 and sees it
eventually falling to a healthier range of 6 percent by the fiscal year 2017-
18.” (Harrington, Jeff 2010). To add to this in Miami, North Miami and
Kendall, areas of South Florida, the unemployment rate was 10.8 in July as
compared to 12.3 in July 2010 one year later. South Florida is known for its
beauty as well as one of the vacation hot spots. South Beach is part of this
area and is usually booming. This year however showed physical signs the
economy was sluggish. The usual over crowded area was extremely under
utilized. Many businesses that were once the tourist attractions were
unusually slow almost to the extent some went out of business. Once of the
perceived reasons is many immigrants are in the South Florida area. Many

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of the immigrants are working but without papers, therefore they are not
being counted. Other businesses are using cash only sales, therefore much
of the taxes that should be coming into the federal, state and local tax base
are being depleted or are not receiving the taxes from those revenues. This
is not good because taxes are increased in an already sluggish economy.
Those who generally hold up the economy by paying taxes are loosing jobs
to this situation. The taxes they gave plus the taxes that should have been
given from this untraceable business is lost. This has been a real problem in
South Florida due to the many immigrants that stay in the country without
going through the immigration process.

In order to adequately compare DC’s unemployment rate with Florida’s

unemployment rate, we must understand exactly what the unemployment
rate is and how it is calculated. According to Bill Kaczor, of Florida AP News,
the unemployment rate is calculated in the following way. “Each month, the
federal government’s Bureau of Labor Statistics randomly surveys sixty
thousand individuals around the nation. If respondents say they are both out
of work and seeking employment, they are counted as unemployed
members of the labor force. Jobless respondents who have chosen not to
continue looking for work are considered out of the labor force and therefore
are not counted as unemployed. Almost half of all unemployment spells end
because people leave the labor force (Kaczor, 2010).” For example, the so
called baby boomers, the 62’s and up are expected to leave the labor force
soon. This means that every job they are currently holding, an unemployed
person with the skills and education for that position will be able to take that
job. Now how does this information allow one to compare one state’s
unemployment rate with another.

The different industries that are unique to a particular state is one

reason the unemployment rates are different. Also, the number of people in
a state needing employment as opposed to another state can be the cause

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of the different rate. While in many cases as is now, the federal government
is offering stimulus packages and other ways for people to increase their
skills and knowledge to be adequately skilled and trained for the new
technological jobs that are currently available. Also, because of the different
stimulus packages, many companies are able to add jobs and increase their
capacity of the production of items that the bulk of was being imported from
other countries. An example of this is the Celgard Plant in North Carolina.
On a visit by President Obama, the company after using the administrations
stimulus package, the company is now hiring 300 new workers in North
Carolina – and expanding its operations making batteries that run more fuel-
efficient cars. “Before I took office, we had the capacity to make less than 2
percent of the world’s lithium ion batteries,” Obama said. “In the next 5
years, on the trajectory we’re now on, we’re going to be able to make 40
percent of the batteries right here in the United States of America (Frank
Ahrens, 2010).” Another example of how DC is able to create jobs is
through affordable housing. The recovery act has allowed affordable
housing projects to continue as well as new ones being developed. “Access
to affordable housing is a challenge facing communities across the country.
But the Recovery Act is helping our nation meet that challenge head on by
providing states with cash to help them finance low-income housing
construction at a time when too many projects would otherwise be stalled.
These projects are helping revitalize communities through both the creation
of new affordable housing developments and the tens of thousands of jobs
being created to build them. This Recovery Act program is helping to not
only create new jobs, but improve the long-term strength of our
communities. These are exactly the type of investments we need to make in
order to continue the momentum of this recovery and lay the groundwork
for future prosperity”(Joe Weisenthal, 2010).

In Florida as well as DC another component which is stimulating the

economy and having an impact on the unemployment rate is the public

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roads construction and rehabilitation as well as construction. These are a
vital part of the economy in that they keep people working as well as create
many new jobs for the unemployed. All in all the economy in Florida will
probably change. Florida not only has to have the mindset of tourism but
also industry, and manufacturing. Additionally, particularly in South Florida,
more jobs would be taken if the requirement was not to be bi-lingual. In
many job situations a very qualified candidate cannot apply to a particular
job because they are not bi-lingual. However, in many cases the job is
given to a person of lesser qualifications because they are bi-lingual. In
Florida, this situation has created many discouraged workers. In order for
the nation as a whole to go back to a prosperous economy, the mindset of
the people must change. The United States of America was founded on the
principle, “and justice for all”. We as a nation must return to this principle in
order to bring the United States back to a stable economy.

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References

Ahrens, F. (2010, April 2). News from Washington, minute by minute.

Retrieved September 19, 2010, from DC Now:
http://voices.washingtonpost.com/economy-
watch/2010/04/march_unemployment_rate.html

Harrington, J. (2010, August 21). TampaBay.com. Retrieved September 19,

2010, from Florida's Unemployment rate ticks up to 11.5 percent:
http://www.tampabay.com/news/business/workinglife/floridas-
unemployment-rate-ticks-up-to-115-percent/1116434

Kaczor, B. (2010, 9 17). Florida Unemployment Rate Increases Slightly.

Retrieved 9 19, 2010, from Florida Unemployment:
http://cbs4.com/wireapnewsfl/Fla.unemployment.increases.2.1917466.html

Summers, L. H. (2008). How is Unemployment measured. Retrieved

September 19, 2010, from Library of Economics and Liberty:
http://www.econlib.org/library/Enc/Unemployment.html

Weisenthal, J. (2010, July 28). This is real the White House wants to
stimulate the economy by building more cheap housing. Retrieved
September 19, 2010, from Business Insider: