- Florida maintains a strong labor market with an unemployment rate of 2.8%, below the national average, despite experiencing a slight slowdown in job growth from 6.1% in 2022 to 5.9% in 2023.
- The state’s economy benefits from domestic migration, a steady flow of retirees, and business-friendly tax policies, but faces potential wage inflation due to a high ratio of job openings per unemployed person (2.0 in August).
- The Florida TaxWatch report warns that while the current labor market is favorable for job seekers, the resultant wage increases could raise business costs, particularly in the tourism and hospitality sectors.
Despite a national economic cooldown, Florida continues to harbor a buoyant labor market, with a slightly slower growth in job openings compared to the previous year, a Florida TaxWatch report published on Friday indicates.
As of September, Florida’s unemployment rate stands at 2.8 percent, falling below the national average by one percentage point, and in contrast to nationwide trends, has registered a slight deceleration in its labor market expansion, with job growth easing from 6.1 percent in 2022 to 5.9 percent in 2023. The slight downturn suggests the onset of a slowdown; however, the state’s job market continues to demonstrate relative stability when compared to the broader dynamics across the United States.
“Florida’s economy has time and again been highly responsive to the U.S. economy,” reads the report. “It tends to reciprocate trends at a higher rate, usually for the better of the state economy. In this case, Florida’s labor market has not yet responded in the same manner as the nation’s labor market.”
The state’s continued growth trajectory, according to Florida TaxWatch, can be partly attributed to domestic migration and a persistent influx of retirees, with Florida’s tax policies, largely seen as favorable towards businesses, further contributing to levels of economic growth.
The report highlights, however, that the high ratio of job openings per unemployed person — which stood at 2.0 in August — is indicative of a labor market that significantly favors job seekers, potentially leading to wage inflation and competitive pressures for employers.
“The preliminary data for August 2023 in Florida shows that there are 2.0 vacant jobs for every unemployed person With such a high ratio, wage inflation in Florida will keep on increasing, adding more leverage for employees to quit and find new jobs offering higher pay.” the report contends. “While this may seem like a good thing for workers, the cost for businesses increases, ultimately raising the cost of services around Florida.”
The report further asserts that Florida holds high potential in terms of business investments, leisure, and hospitality given the state’s notoriety as a tourism haven.
“As a state known for its tourism, Florida’s economy highly depends on this industry for stability. As businesses look to attract and retain employees in this sector, providing higher monetary benefits to employees will increase their costs and could negatively affect the tourism of the state at-large,” the report reads.