Jury still out on whether ending unemployment checks early helped Florida’s economy

Five months ago, Gov. Ron DeSantis’ administration announced it was ending $300-per-week federal unemployment benefits early to spur Floridians back to jobs.

“The jobs are there,” DeSantis said in May. “I’m confident, with almost half a million job openings, that people are going to be able to get a job and get back to work.”

So, what happened next?

Worker shortages persist. National studies show that ending the benefits early had minimal impact on job growth. And Floridians who had their benefits end say they still haven’t found work.

“Certainly, the numbers don’t show it’s done anything to spur the state’s economic recovery,” said Ned Murray, the associate director of the Jorge M. Pérez Metropolitan Center at Florida International University.

As Florida emerges from the pandemic, economists and observers have puzzled over the state’s disjointed recovery.

In some ways, Florida’s economy is doing great. The state has restored 77% of the nearly 1.3 million jobs it lost since March 2020. The state’s tax revenues continue to exceed expectations each month. Industries such as housing have boomed.

There are about 500,000 jobs available, according to the state — typically a good sign.

But like many states, Florida businesses have struggled to find workers to fill them.

The unusual labor market is “beyond a doubt probably the most persistent conundrum of where we are right now,” Florida’s chief economist, Amy Baker, told lawmakers during a briefing on the state’s economy on Thursday.

To spur people back to work, DeSantis and governors in 25 other states announced in May they would no longer participate in a federal program offering $300 weekly unemployment benefits. The program, meant to supplement the Florida’s maximum $275 weekly benefits, was set to run out in September. Instead, it ended in late June, 10 weeks early. (Unlike some states, Florida kept three other federal unemployment programs, including one for gig workers, until they expired on Labor Day.)

Business groups such as the Florida Chamber of Commerce and Associated Industries of Florida, which are major campaign donors to DeSantis and state lawmakers, advocated for the governor’s “Return to Work” initiative, saying that ending benefits would get Floridians back to the workplace.

DeSantis’ spokesperson said the initiative was a success, although she pointed to the recent federal jobs report that showed just 194,000 jobs were added nationally in September.

“President [Joe] Biden’s promised labor market recovery has not materialized,” spokesperson Christina Pushaw said in a statement last week. “Despite dismal national trends, Gov. DeSantis’ policies continue to support job growth in Florida, and our economy is thriving.”

Economists in Florida say there’s too little data to say whether ending the benefits caused people to go back to work.

“I think it’s too early to tell,” said Jerry Parrish, chief economist for the Florida Chamber of Commerce. “Another three to four months of data will give us a much better look at this.”

National studies have shown that ending the benefits early had little effect. A Wall Street Journal analysis found that the states that ended benefits early had about the same job growth as those that didn’t. Another study, using anonymized bank data from about 18,000 low-income workers, found that ending the benefits increased employment from 22% to 26%.

As proof of Florida’s success, the state’s Department of Economic Opportunity points to the labor force growing by 373,000 people since May. The labor force is the number of people working or looking for work.

“Transitioning away from these benefits helped meet the demands of small and large businesses who are seeking to expand their workforce,” spokesperson Emilie Oglesby said in a statement.

Parrish agreed that it’s a positive sign. Other economists the Herald/Times spoke to were not convinced by that statistic, however.

“To say that that number is driven entirely by the initiative, I think is really overstating it,” said Mike Snipes, an economist at the University of South Florida. “What if a large portion of that is new graduates? Or people coming from out of state?”

Murray, who works at Florida International University, said the state’s data didn’t indicate there were large numbers of people going back to work because benefits ended.

Between July and August, the two months after the benefits ended, Florida gained about 96,000 jobs, according to Department of Economic Opportunity data. But about 70% of those jobs came from local governments hiring educators, according to the data.

“These aren’t people who were collecting a $300 check, for the most part,” Murray said.

There are likely many reasons why Floridians haven’t returned to work. Baker, the state’s chief economist, told lawmakers Thursday that some workers nearing retirement simply retired early during the pandemic. Some are waiting to feel safe at work. Others can’t afford to work and send their children to childcare.

And others are simply struggling to find work.

That includes Gia Cuccaro, 52, a 30-year paralegal who lost her job because of the pandemic. She went back to work in August last year, contracted the coronavirus, and wasn’t called back for work.

She’s since been unable to find work. She said she’s been repeatedly told she’s “overqualified,” and she suspects she’s being discriminated against because of her age.

“Some might say, ‘Go work at McDonalds,’ ” she said. “Guess what? I put an application in at McDonald’s. They didn’t hire me.”

Cuccaro was one of several Floridians who sued DeSantis and the state for ending the $300 weekly benefits, claiming he broke state law. A judge in Tallahassee rejected the argument, saying the decision belonged to DeSantis.

Ending the benefits early deprived her and other Floridians of 10 weeks of benefits, or $3,000. She’s gone from making $60,000 per year before the pandemic to now shopping at Dollar Tree and selling plasma to get by.

“I sit with a needle in my arm for 50 minutes twice a week for $60 [each],” she said. “That’s what I do for money right now, because I have no choice.”