Change In Reporting Method Boosts Countys Jobs Report
Written by Claudio Mendonca on September 8, 2005
By Claudio Mendonca
A change to a more realistic way to calculate Miami-Dade County’s employment levels is helping to entice out-of-town companies to move here, according to the Beacon Council, the county’s economic development agency.
That simple change vaulted Miami from the bottom of the state in annual job creation to near the top.
"Companies in Europe, Asia and in other states want a strong economy, and it is important to show the world how Miami is a vibrant community," said Jaap Donath, the agency’s vice president of research.
For years, the Beacon Council and local economists disagreed with area employment numbers posted by the Florida Agency for Workforce Innovation in Tallahassee.
But since changes were made in January, numbers have been looking more favorable. Those shifts include using data from the 2000 census instead of the 1990 census.
The methodology needed changing, Mr. Donath said, because so many of Miami’s goods and services are exported and large amounts of money flow in from abroad, the economy is different from that in the rest of the state.
The Florida Agency for Workforce Innovation "used a methodology that did not show the true economic activity of Miami – which are trade and services provided by outsiders," Mr. Donath said.
In the past year, agency figures show, Miami-Dade added 16,200 jobs. At the same time, Broward County generated 21,400 new positions and Palm Beach County added 14,200.
Outside the tri-county area, the Jacksonville area has the greatest job creation in the state, 16,400.
Prior to changing the methodology, Miami-Dade’s unemployment rate lingered around 6.5%. Currently, it hovers around 4.5% to 5%.
The top sectors for job growth, according to the Beacon Council, are the hospitality and professional sectors at 5,800 and 7,000 new jobs respectively in the past year, followed by wholesale adding 1,900 and construction 300.
In contrast, manufacturing in the county has been sliding, with a year-to-year loss of 900 jobs.
"The changes in methodology have made the Miami Metropolitan Statistical Area the number-one creator of jobs in the state," said Warren May, a spokesperson for the state agency. "The overall objective is to give accurate data so economic developers can do their job more easily."
The Miami Metropolitan Statistical Area, with 5.2 million people, encompasses Miami-Dade and Fort Lauderdale and is the fifth-largest metropolitan statistical area in the US behind New York, Los Angeles, Chicago and Philadelphia.
Mr. May said that by using the 2000 census, the US Bureau of Labor Statistics incorporated new population data that gave the county a new geographic definition. These new findings, he said, also used a time-series economic model that takes into consideration past data from all industries.
"The new methodology for labor statistics is a major development for companies evaluating new areas for relocation," said Beacon Council President and CEO Frank Nero.
"Since 2003, numbers [from the state] were showing that Miami-Dade County went from being the number-one community in job creation in 2002 in to being one of the last in 2003," he said.
In contrast, Mr. Nero said, data from the US Labor Department had Miami as one of the top cities in job growth in the US. Mr. Nero said data the state agency was providing weren’t matching the economic activity seen in Miami-Dade during these years.
Miami-Dade is one of six US metropolitan areas already using its own methodology to calculate labor numbers. The other five are Chicago, Seattle, New Orleans, Detroit and Cleveland.
By using this new method, Mr. Nero said, statistics more accurately reflect the economic growth during the past three years.
"We were pleased that starting with January 2005 labor statistics, the methodology changed based on new mandates from the US Department of Labor," he said.
Mr. Nero said the state has begun using new procedures to produce workforce estimates for cities based on unemployment claims and population. In fact, the state agency has been including 2000 Census numbers to more accurately reflect the number of people in Miami.
"The federal government has realized that Miami-Dade County’s large economy is different from other large and medium-size communities in Florida," Mr. Nero said.
Economist J. Antonio Villamil, head of the Governor’s Council of Economic Advisors, agreed that the changes were vital.
"In Miami, we need to look at airport arrivals, taxable sales, business permits issued by municipalities rather than traditional statistics, which measure factors such as payroll-based employment growth and personal income," said Mr. Villamil, who runs the Washington Economics Group in Coral Gables. "Those measurements work in a closed economy but don’t reflect what is happening in Miami."