Now that the recession is officially over (as of June 2009), when will the jobs come back and where will they come from? As most economists will tell you, in a normal recession employment is one of the last economic indicators to show improvement. However, as we all know, this recession is different.
The perpetual increase in unemployment since the end of the recession continues to cause concern. For example, unemployment in Leon County increased from 2.9 percent in January 2007 to 7.4 percent in June 2009, when economists declared the official end of the recession. However, since June 2009, unemployment has increased from 7.4 percent to 9.0 percent.
To understand what the recovery in jobs will look like, we must first review a profile of our workforce and determine where Leon County lost jobs during the recession.
Where Did The Jobs Go?
When compared to other areas, Tallahassee exhibits a high concentration of government workers, primarily due to its designation as the state capital. In fact, government jobs comprise 35 percent of the workforce in Tallahassee, with the remaining 65 percent falling into the private sector. By comparison, government jobs make up just 12 percent of the workforce across the state of Florida.
A review of employment statistics from before and after the recession show that the Tallahassee MSA has lost approximately 11,000 jobs since January 2007 – 6,000 jobs from the private sector and 5,000 government jobs. These numbers tell us that 45 percent of the job losses came from a category that makes up 35 percent of our workforce.
A closer look reveals that of the 11,000 jobs lost, two categories make up 70 percent of the job losses – construction and government. These findings indicate that even if we recover all the jobs in the non-construction and non-government categories, our unemployment rate will fall to approximately 7 percent, still over twice the level before the recession.
Where Will the Jobs Be Created?
Given the current climate of limited resources at all levels of government and the dismal status of the real estate industry, it seems naïve to expect we will recover jobs in the areas of government and construction – the two job categories hit hardest by the recession.
The challenge for policymakers is to understand this dynamic and to develop a strategy to address the issue. The answer may lie in promoting job creation in the areas that have best weathered the recession, which include healthcare and education. According to Florida’s Agency for Workforce Innovation, these categories actually added jobs during the recession.
Strong, visionary leaders will view this recession as an opportunity to chart a new course for developing the local economy. That new course must augment and/or transcend traditional economic development policy, and will require out-of-box thinking and original ideas.
Based on this analysis, it appears that waiting and hoping for a “traditional” recovery to materialize is a recipe for disappointment and continued struggles for our community.