PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

STATE SPOTLIGHT: New York vs. Florida – A Different Direction on Jobs

By at 22 October, 2019, 9:16 pm

by Raymond J. Keating-

Small Business Policy Index 2019

New York ranked 47th – or the fourth worst – among the 50 states.

Florida ranked 3rd – or third best – among the 50 states.

SBE Council’s “Small Business Policy Index 2019” ranks the 50 states according to 62 different policy measures, including a wide array of tax, regulatory and government spending and performance measurements.

Small Business Tax Index 2019

New York ranked 44th – or seventh worst – among the 50 states

Florida ranked 5th – or fifth best – among the 50 states.

SBE Council’s “Small Business Tax Index 2019” is a subset of the “Small Business Policy Index” report, ranking the states according to a wide array of tax measures, including income, capital gains, property, death, unemployment, and various consumption-based taxes like state gas and diesel levies.

Job Creation Varies Among the States

The latest state employment report from the U.S. Bureau of Labor Statistics continues to tell a story of a nation split in terms of job creation. As noted by the BLS: “Over the year, 27 states added nonfarm payroll jobs and 23 states and the District were essentially unchanged.”

But let’s look at key trends in two states that couldn’t be more different – exhibiting a striking split – New York and Florida. In 2014, by the way, Florida passed New York to become the fourth most populous state in the nation.

The two states sit at opposite end of SBE Council’s “Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth.” The Index ranks the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures.

New York ranked fourth worst among the 50 states, while Florida ranked third best.

On the “Small Business Tax Index 2019,” which is a subset of the larger “Small Business Policy Index,” whereby the states are ranked just on tax measures, New York registered seventh worst and Florida fifth best.

We recently examined each state independently based on the Index – New York can be read here and Florida here.

But take note of two important employment data trends for each state. If you consider the unemployment rate, one might think that there’s not all that much difference between the two states, with the September unemployment rates coming in at 3.2 percent in Florida and 3.9 percent in New York.

Sure, Florida’s is better, but heck, they’re both under 4 percent, right?

This serves as another example of why the unemployment rate is a rather empty measure. Let’s take a look at what’s been happening in each state in terms of the labor force and employment.

Empire State on the Decline

In New York, throughout 2019 so far, the labor force has declined, from 9.63 million in January to 9.52 million in September. Over the same period, employment declined from 9.25 million to 9.14 million. So, labor force and employment levels in New York have declined, yet the unemployment rate remained steady at 3.9 percent.

For good measure, New York has failed to get back to its labor force high of 9.72 million hit in November 2008 (according to data going back to January 1976). Meanwhile, in June 2018, the state finally beat the previous employment high of 9.16 million set in July 2008. However, the September employment number has shrunk so that it once again is below the July 2008 level.

Sunshine State Getting Brighter

As for Florida, the labor force has been on the rise since November 2009, and employment has been growing since November 2009 as well. The labor force stood at 9.04 million in November 2009, 10.32 million in January 2019, and hitting 10.42 million in September 2019.

As for employment, it went from 8.03 million in November 2009 to 9.97 million in January 2019 and registered 10.08 million in September 2019.

These are two striking different economic stories – one of a state in economic decline, i.e., New York, versus a state that is growing, i.e., Florida. One would not grasp any of this if looking simply at the unemployment rate.

Yes, the dramatically different policy environments between New York and Florida matter a great deal. And it’s not just “the weather.”

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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