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Area's Jobless Rate Tops 10%

News Channel 8 photo by Peter Masa.

A year ago, the Bay area's unemployment rate was just 5.1 percent.

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By MICHAEL SASSO

msasso@tampatrib.com

Published: March 28, 2009

TAMPA - One in 10 Bay area residents are unemployed and, for now, most projections have the jobless rate going even higher until next year.

With unemployment soaring, lawmakers in Tallahassee are fretting over whether to accept more than $444 million from the federal government to help Florida pay the rising costs of unemployment compensation claims. The federal money comes with strings attached and the risk of higher taxes on business later to pay for the long term.

The Bay area's unemployment rate rose from 9.8 percent in January to 10.2 percent last month, according to data released Friday by the state Agency for Workforce Innovation. A year ago, the Bay area's unemployment rate was just 5.1 percent. The state defines the Bay area as Hillsborough, Pinellas, Pasco and Hernando counties.

The state of Florida saw its jobless rate shoot up, too. The unemployment rate hit 9.4 percent in February, the highest it has been since April 1976, when the rate also was 9.4 percent. The state's unemployment rate was 8.8 percent in January and 5.2 percent a year ago.

Both the Bay area and the state are faring significantly worse than the nation overall. The U.S. unemployment rate in February was 8.1 percent.

Florida's unemployment rate is expected to rise higher into double digits before the recession ends. Rebecca Rust, the Agency for Workforce Innovation's economist, said the unemployment rate should peak at 10.2 percent early next year. Chris Lafakis, an economist at Moody's Economy.com, projects it will rise to 11 percent in spring 2010.

There's no sign yet that businesses are adding even temporary workers, often the first workers hired when the economy starts to rebound, Rust and Lafakis said.

"We're still in an environment when the economy's contracting," Lafakis said.

According to the new state data, about 874,000 Floridians are out of work.

Among area counties, Hillsborough County's unemployment rate rose to 9.7 percent in February, which is up from 9.3 percent in January and from 4.9 percent a year ago. Unemployment in Pinellas County rose to 10 percent in February from 9.6 percent in January and 4.9 percent a year ago.

Pasco County saw its unemployment rate rise to 11.3 percent last month from 10.8 percent in January and 5.9 percent in February 2008.

Construction remains the industry hit hardest, with a 20.3 percent unemployment rate. Health continued to buck the trend, though. Employment in the broad health care and social assistance industry has risen 2 percent over the year.

At the moment, the trust fund the state uses to pay unemployment compensation claims holds about $740 million, but it may be used up by the fall, said Robby Cunningham of the Agency for Workforce Innovation. That is sparking a debate in Tallahassee over whether to accept the $444 million stimulus funding for unemployment benefits.

Helping drive the discussion is a proposal allowing people who voluntarily quit their jobs to receive unemployment benefits, according to the Florida branch of the National Federation of Independent Business.

Reporter Michael Sasso can be reached at (813) 259-7865.

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