Criminal Justice Forum

Corporate Profits Aren’t Translating into Florida Jobs

Orlando Sentinel:

It
seems like just the thing Florida’s coughing, wheezing job market
needs: With corporate profits rebounding nicely in the past year, the
nation’s biggest companies are sitting on almost $1.7 trillion in
earnings.

Flush with cash, those businesses
must be ready to hire, right? Their strong financial position must mean
that stubbornly high jobless rates – 12 percent statewide, 11.9 percent
in Central Florida – will soon march downward?

Not necessarily.

The usual relationship between
profits and employment has been wrenched out of shape by the worst
economic downturn since the Great Depression. In part, that’s because
the jump in earnings is a function of lower operating costs and stronger
overseas results – not surging domestic demand.

Heading into the recession, many companies slashed employment and
shuttered marginally profitable ventures. Shedding those costs has
allowed them to post healthy profits this year – up almost 30 percent
collectively from a year ago – even though demand for goods and services
is just now emerging from economic hibernation.

"There’s still an enormous lack of
demand," said Heidi Shierholz, an economist with the Economic Policy
Institute in Washington. "Companies are saying they just don’t have the
sales to justify hiring yet."

So those companies are sitting
back, stashing money under the corporate mattress until American
consumers get their mojo back. Of course, in a classic bit of
chicken-or-the-egg economics, that’s not likely to happen until
consumers feel better about the labor market.

"I don’t think this recession was seen as a temporary hiccup," said Mark Vitner, a senior economist with Wells Fargo. "So everyone is being very cautious."

Consider Orlando-based Darden
Restaurants. Although profits have improved this year – up 26 percent in
the most recent quarter – filings with the U.S. Securities and Exchange
Commission in July showed the company had about 5,000 fewer employees
than a year ago.

Vitner said executives he has
talked to are recalibrating – assessing whether the consumer demand of a
few years ago will ever return.

"So much of it was financed by
easy credit," he said of those pre-recession days. "What we thought was
demand may not have been real."

While the nation’s biggest
employers hoard cash and delay hiring, small businesses are still
focused on just staying afloat. Unable to lean on overseas earnings, and
with fewer places to cut, they have not experienced the same rebound in
their bottom line.

That’s painfully true in Florida, where so much rides on the construction industry.

(Read the story online here.)

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Researcher Says Scott Advisors Misused His Study on Unemployed Workers

Orlando Sentinel:

The transition team for
Gov.-elect Rick Scott wants to overhaul Florida’s unemployment system,
but an economist cited in the team’s just-released report says his work
has been misused and misinterpreted.

Princeton
University Prof. Alan Krueger, a former U.S. Treasury Department
official, said Thursday the report prepared by Scott’s team suggests
that laid-off workers "put little effort into finding a job." But the
real problem faced by the unemployed today, he said, "is lack of jobs,
not overly generous benefits."

"The
unemployed in the U.S. devote more time searching for a job than
unemployed workers in other countries," Krueger wrote in an e-mail, "yet
they [Scott’s team] make it seem that the unemployed put little effort
into finding a job."

The team, he said, "misspelled my name and misused my study!" Reached
via e-mail, a Scott spokeswoman did not address Krueger’s comments,
saying only that "the transition teams’ recommendations are only
recommendations. Gov.-elect Scott and his team will be reviewing all of
the suggestions and conducting their own research as well."

Krueger,
a former assistant secretary for economic policy in the Obama
administration, was responding to a 109-page economic-development report
issued Wednesday by Scott’s transition team.

In
a six-page section on unemployment, the team said Florida should reduce
the cost of unemployment by: helping people find jobs more quickly;
requiring community service for people on unemployment longer than 13
weeks; tightening the rules that require recipients to look for work;
and making people conduct a job search before receiving their first
check.

Citing Krueger, the report indicated that many laid-off workers spend little time looking for a new job.

"According
to Krueger’s research, the amount of time people on UC  [unemployment
compensation] spent looking for a job averaged only 20 minutes a day!"
the report states. "Within two weeks of UC ending, that increased, but
to only 70 minutes a day!"

But
Krueger said the research noted by Scott’s team actually found that, on
average, unemployed people spent about 40 minutes a day looking for a
job. The 20-minute figure, he said, represented the "low end" of the
spectrum.

Moreover,
that study was conducted several years ago, during a "more normal job
market," he said – not in a market where laid-off workers outnumber job
openings by about five to one. Research done last year found that people
spent about an hour a day looking for work.

The primary problem today, Krueger said, "is a lack of demand for workers, not lack of search effort."

(Read the story online here.)

_______________________
Scott’s Environment Team Says Goal is to Help Make Development Happen

St. Petersburg Times:

They
were told to be bold. They were told to come up with something dramatic
to shrink state government and create jobs. They were given 20 days to
do it.

So
the team that Gov.-elect Rick Scott asked to advise him on how to
reform the state’s growth and environmental regulations proposed
something bold: Merge the state’s environmental, growth management and
transportation departments into a single agency called the Department of
Growth Leadership. And
permitting decisions from any state agency should consider "job
creation and economic development" as being just as important as having
clean water and air, the regulatory reform committee told Scott this
week in a 79-slide report. Those
recommendations spell out a dim future for Floridians who aren’t fond
of pavement, predicted environmental activist Linda Young of the Clean
Water Network. "The
message is, ‘We are going to have a feeding frenzy on your natural
resources and tax dollars, and you are going to have jack … to say
about it, so get used to it,’ " Young said. Getting
the Legislature to approve merging the Department of Environmental
Protection, the Department of Transportation and the Department of
Community Affairs next year would improve how the state deals with the
pressures of development, according to the report from the committee,
which is chaired by a former developer. Instead
of regulations aimed at stopping bad development, the committee said,
the "regulatory policy objective (would be) to help make good
development happen…

The state’s environmental and growth management agencies are mired in
"regulatory mistrust, competition, duplication and conflict," the
committee warned in its slide show. One
slide says the state’s environmental regulators had gone from a mission
of "protection" in the 1970s to one of "suppression" in the 2000s –
even though that was during the two terms of business-friendly
Republican Gov. Jeb Bush. "You
go into the agencies and it’s almost like you’re the enemy," complained
Doug Manson, a Tampa lawyer who has represented utilities and bottled
water companies, and who chaired the environmental subcommittee of the
regulatory reform group. He said the regulators’ attitude is, "How do we
suppress or stop development?" 

That’s
news to environmental advocates like Young, who has spent years
battling agencies she viewed as accommodating developers instead of
protecting the environment. Once the real estate boom that occurred
during Bush’s term turned to bust, state officials calculated that
Florida had a backlog of more than 300,000 vacant homes, she pointed
out….

The Regulatory Reform Transition Team was chaired by Chris Corr, vice
president for planning, design and development for the global builder
and designer AECOM. In the 1990s, Corr helped develop the 5,000-acre
town of Celebration for the Walt Disney Corp. He then served until 2008
as vice president of the St. Joe Co., which spent the past decade
transforming its Panhandle pine forests into residential and commercial
developments. He could not be reached for comment. Two
other former St. Joe executives, Peter Rummell and Billy Buzzett, also
served on the 29-member committee, along with a sugar company executive
and the president of a Sarasota home building company.

(Read the story online here.)

_________________________
Scott Must Sell, Not Order, Many of His Proposals

St. Petersburg Times:

Gov.-elect Rick
Scott says it won’t be business as usual when he takes the reins of the
state’s highest office on Jan. 4, and if he adopts the giant to-do list
from the six groups on his transition team, there may be no doubt he has
kept his promise.The wide-ranging list of recommendations covers
everything from considering the sale of Jackson Memorial Hospital in
Miami to giving universal vouchers to all parents to send their children
to private schools. The
ideas contemplate merging more than a dozen state agencies into two or
three departments, raising residential electricity rates in exchange for
lower commercial rates, privatizing the state’s mental health
facilities, punishing the unemployed for spending too little time
hunting for jobs, and even identifying a private-sector employee to run
the Department of Juvenile Justice. Depending
on the suggestions, Scott may adopt many of the proposals himself after
he takes office, such as creating a ”chief reform officer” inside the
executive office of the governor. But most of the ideas will require
legislative or federal approval, budget changes and, in the case of
universal vouchers, a possible amendment to the state Constitution. As a
result, Scott supporters are urging the new governor to read the
recommendations carefully and move methodically before asking lawmakers
for approval and support. Scott
is being advised by six transition groups, covering rules and
regulations, prisons and legal affairs, economic development, job
creation, education and administrative changes. ”Some
of these sound like common-sense ideas and others are going back to the
past where things didn’t work,” said Sen. Paula Dockery, a Lakeland
Republican and one of two legislators on Scott’s transition team.
”After a thorough debate, the Legislature will view some of them
positively but will view some of them with great caution.”

(Read the story online here.)
______________________________

Taxpayer Bill of Rights is Not for Florida

Orlando Sentinel editorial:

Florida’s legislators want voters to judge them on how they manage to
create jobs. But if legislators also hand voters a proposal to broadly
limit revenue growth, they’ll deservedly be judged hypocrites of the
highest order.

TABOR, we’re sorry to say, has come slinking back. The so-called Taxpayers Bill of Rights.

Thanks
to people like Senate President Mike Haridopolis and Senate Finance and
Tax Council chair Ellen Bogdanoff, who couldn’t leave bad enough alone.

The bill, which Ms. Bogdanoff is drafting, is expected to do what bills
championed by Mr. Haridopolos in 2008 and 2009 tried to do: set a cap
that ties revenue growth to population and inflation, and require a
referendum for any new tax, fee or assessment.

Tried
to do, but failed. The Legislature wisely didn’t send the bills to the
electorate, which would have had to pass them as amendments to the state
constitution.

But
make no mistake: This push to supposedly make government more efficient
and productive by limiting its revenue, but which would hamper its
ability to provide necessary services, is Mr. Haridopolos’ handiwork. He
cutely dubs the spending limit a "smart cap."

It’s
anything but. Colorado’s the only state that passed a similar cap on
state and local government collections, in 1992. By 2005, residents had
voted to suspend it for five years. The cap had dropped Colorado from
35th to 49th in the nation in K-12 spending, and from 23rd to 48th in
the nation in access to prenatal care. That’s hardly a success.

In
Florida, the "smart cap" would reduce funding for schools and social
services. Florida Chief Financial Officer Alex Sink also warns a tax cap
would make it more costly to sell bonds for public-works projects – and
to pay claims against state-run Citizens Insurance after a major
hurricane.

The
adjustment for inflation would satisfy needed increases in funding? No
way. The Florida Association of Counties notes that cost increases in
education and health care far exceed the general rate of inflation.
"Within the Consumer Price Index (CPI) itself, medical care and
education have been growing at twice the rate of the overall CPI," it
reports.

But
that’s a detail TABOR’s supporters avoid. Instead, Mr. Haridopolos says
that TABOR will "give voters the ultimate veto power" on local
officials’ penchants for taxing and spending.

What
blinding hypocrisy. Mr. Haridopolos and the Legislature fought the
Hometown Democracy amendment like it was Mad Cow disease. Why? One of
their key arguments against letting residents vote directly on land-use
changes was that it usurped the representative form of government. If
people don’t like local governments’ land-use decisions, then vote the
bums out.

(Read the editorial online here.)