Local low unemployment rates could be a bad sign

JACKSONVILLE, Fla. — President Biden touted new unemployment numbers today, saying it shows America is coming back strong from the COVID-19 pandemic.

The Labor Department says the U.S. has stayed at an average of 4% unemployment, a far cry from the beginning of the pandemic when it rose almost overnight to 14.7%. But those lower numbers may not be good for everyone.

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The state of Florida is sitting at an unemployment rate of about 4.4%. Here in Jacksonville, it’s even lower at just 3.2%.

Even though that sounds like a good thing, economists like Don Wiggins say that hurts everyone in the long run.

“They are good. In fact, they are too good.”

Jacksonville’s unemployment rate sat at 3.2% in December of 2021 which is slightly up from 2020. But economists say a healthy unemployment rate is more like 4-5%.

“When you have unemployment less than that, it means you have a labor shortage.”

Job growth has not been a challenge for Jacksonville. Nearly 30,000 new private-sector jobs were added through 2021, increasing by nearly 4.4%.

The problem is getting those jobs filled.

“Everyone, almost across the board, has an issue with labor.”

Trade, transportation and utilities saw the largest increase with nearly 9,000 jobs added locally.

“Truck drivers, warehouse workers, construction workers, they are still facing a tremendous shortage in those fields as well,” Wiggins said.

The inability to fill those jobs has a ripple effect.

“And that causes supply shortages at the grocery store, it causes supply shortages at department stores, it just has a ripple effect throughout the economy, no question.”

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The labor force for the city rose 6.6% which is an increase of 51,191 people but there are still more jobs than people.

Fernando Meza manages a Jax Beach bar. He knows firsthand how hard it is to get employees.

“It’s been challenging ever since we opened back up,” he says.

That is where the issue comes in. More people, fewer jobs means employees can demand more money in every industry from transportation to hospitality.

“We’re all raising our wages but unfortunately we can’t raise it to the point where we can’t have a profit.”

Wiggins explains that specific combination means more money in the economy without an increase of goods or people.

This means one thing.

“The short answer is inflationary. You have a lot of demand, limited supply, prices gotta go up,” Wiggins said.

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