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Hernando Today

Unemployment Will Continue To Rise

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By TONY HOLT

Hernando Today

Published: January 31, 2009

SPRING HILL - It began with high energy costs.

Soon thereafter, the housing industry - particularly in Hernando County - came to a screeching halt.

Then the stock market crashed and home equity disappeared.

All of it was exacerbated following the credit freeze late last year.

Until that is fixed - perhaps with help from another Congress-passed economic stimulus package - the unemployment rate could remain at woefully high levels, economists have said.

Those among the 7,000 or so who are out of work in Hernando County are unwilling to wait.

They show up en masse everyday at Career Central, applying for government assistance and searching and applying for jobs.

"It's very intimidating, but you just have to keep trying," said Sheryl Sooknanan, 27, of Spring Hill, who managed a local Verizon Wireless store until late last year.

She and her husband each ran a business. Now they are jobless, raising their two children and seeking help from relatives to pay the mortgage.

Sooknanan visited the Career Central offices for the first time Friday.

"I'd settle for anything," she said when asked what kind of job she was looking for, "but I'd like to stick with something I know."

Sales was at the top of Sooknanan's list.

Credit freeze is driving force behind the recession

The most recent prediction that came from the Florida Economic Estimation Conference was that Florida's unemployment rate would top out at 8.1 percent. It was held in October.

Merely two months later, that number was reached. Economists are reassessing. They know the ceiling is still a ways away.

"We did reach that peak earlier than expected," said Rebecca Rust, an economist with the Agency for Workforce Innovation out of Tallahassee. "The economy has slowed since (October)."

Retail researchers and others have predicted a "slower-than-normal" improvement by late 2009, but so much depends on the X-factor for the current recession - the credit freeze.

"That's the most complicated part of it," said Sean Smith, an economics professor at the University of Central Florida. "When lending stops happening, it has a detrimental effect on spending and output. It's a bigger concern right now than the slowdown in the economy itself."

As long as banks are saddled with bad assets, lending will not return to normal. That is why so much is riding on President Obama's stimulus package, Rust said.

If passed, the package would include a "bad bank" designed to absorb the bad assets weighing down the industry.

That would enable banks to clear out its pile of bad debts, making it safe for them to grant loans again.

History shows unemployment will get worse, even after the recession

Unemployment typically has bottomed out the year following a recession.
Hernando County reached 11.4 percent in June 1983, which followed the recession of 1981 and 1982.

Its highest-ever unemployment was in June 1976, which came after the recession of 1974 and 1975. It shot up to 20.7 percent.

Hernando County's current 10.9 percent is the worst since 1983. The recession is far from over.

Rust would not guess what unemployment could be this year, next year or in 2011.

Smith suggested unemployment would improve in the second half of 2010 at the earliest.

"The possibility is becoming more likely that we'll reach 10 percent unemployment in Florida," he said.
Hernando County has consistently remained more than two points higher than the state average.

Hiring freezes are the norm

"It's getting really serious, very frightening," said Holly Michaels, of Spring Hill.

The former hospice nursing assistant lost her job after undergoing surgery last year. Both she and her daughter - who has a 15-month-old daughter - are out of work. They both were at the Career Central office searching for jobs.

Michaels is 52 years old and does not receive medical or government assistance. Her daughter gets food stamps.

"The State of Florida is not doing enough to assist people like us as far as we can tell," she said. "You really have to fight tooth and nail."

Being out of work usually means there is no cash flow. With no cash flow, certain privileges must be cut - including transportation, Internet access and other job-seeking aids, she said.

Michaels wishes to become more marketable by updating her computer skills, but no night classes are available, she said.

Twice her daughter had walked out of interviews thinking she was about to be hired, only to be told later those companies were under a "freeze."

"It's exhausting because it's a full-time job to look for work," Michaels said.

She faces an expensive tax bill and pays a small mortgage. Before long, she might have to sell her car, she said.

"I'm running out of money," she said. "I've never had to do anything like (sell my car) before. I've always had good credit. I've always been OK."

She is thankful for the assistance provided by Career Central, but it is the only agency in her good graces these days. She blames the government, the job market and her former employer.

"They let us fall by the wayside," she said referring to herself and others who were laid off. "I'm really hurt by it."

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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