Unemployment: The Real Numbers

In February, the Florida Legislature’s Office of Economic and Demographic Research had to correct a too optimistic forecast it had produced in March 2009. Exploding unemployment throughout last year forced the economists in Tallahassee—on whose projections the state congress bases its budgets—to take that step.

According to the new report, Florida unemployment will peak at 12.3 percent this summer, up from 11.6 percent in December. That’s the good news. The bad news: Two-digit rates will continue to linger through the end of 2012.

In Southwest Florida, where unemployment has topped statewide rates, some see a rosier outlook. But locally and statewide, the unemployment picture is likely grimmer than the numbers show.

Consider those who don’t make the unemployment statistics—marginal workers not eligible for benefits, people trying to scrape by with two or three minimum-wage jobs, involuntary part-timers and the long-term unemployed who stopped looking—and you can add another 8 percent, according to the Florida Agency for Workforce Innovation. That doesn’t even consider the army of sole business owners—architects, lawyers, engineers and other freelancers—who must make ends meet with half the cash flow or less than they used to have.

That means one of every four or five working adults, and their families, are standing in the rain. This, in turn, means a cloud of unpaid credit-card debt, returned car leases, back rent and home foreclosures hovering over the economic recovery.

Here’s what economic guru Mohamed El-Erian, CEO of PIMCO,the world’s largest bond investment fund, had to say about this phenomenon: "Rates of unemployment in two-digit percent ranges can become a big problem if they persist," he said in a recent interview published on his company’s Web site. "When you see unemployment not just high but persistently high, even the employed become more cautious and consume less, so even the employee who has the income starts feeling more constrained."