The damage inflicted by Hurricane Ian was massive, with its effects felt by several regions in the United States for weeks and months. Florida will most likely be affected since the state sustained much of the damage from the hurricane.
According to economists, employees might be forced to quit their jobs, especially those who would file unemployment benefits. If this happens, it will have adverse impacts on the local economy and will cause it to make a slow rebound.
The extent of Ian’s damage has not been finalized yet, with estimates overwhelming that of older records in Florida. However, if the current projections are correct and will increase, it will be the costliest damage made by a hurricane in Florida’s history.
According to RMS, a disaster-modeling firm, the damage could be around $53 billion to $74 billion.
Minke Englund, a chief economist from Action Economics, said joblessness is inevitable in Florida, comparing what happened in the wake of Hurricane Harvey in Texas, where around 50,000 Texans quit their jobs.
“Certainly, there’s going to be some short-term displacement, but it’s hard to predict exactly what that will look like in the Florida context or in the Southeast more generally. Particularly in coastal communities and within tourism, how long those effects persist depends on the sector’s ability to rebuild,” said Lynn Karoly from the RAND Corporation.
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Low-income workers are highly affected
In terms of bouncing back after a disaster, bigger companies will comparably have a better situation due to access to insurance, disaster funds, cash flows, and incurring debt to repair their facilities and restart their operations. However, workers will be struggling more, especially low-income workers.
“The resilience factor could be lower among the lower-wage workforce, and even their employers may also be rethinking about how they staff the positions that they need to fill,” Karoly added.
Florida already had a tight market even before Ian hit. However, with the new conditions, workers will have more difficulty dealing with the market conditions.
According to the vice president of technological company UKG, Dave Gilbertson, areas in Florida that have been hard hit already see around a 50% cut in its workforce activities, meaning loss of economic activity and income for workers.
“It’s pretty uncommon to see a nearly 50% decline. This is a deeper disaster than we’ve seen over the past couple of years. They’re losing so much personally, but they’re also losing the ability to work and support their family. A lot of hourly workers are living paycheck-to-paycheck [and] dealing with rising inflation by pulling down their savings and utilizing more credit cards. The ability to withstand any kind of disruption is minimal,” Gilbertson said.
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Compared to Hurricane Katrina
Economists are comparing the events following Hurricane Katrina with what is currently happening. And they have assessed that there might be a similarity between the subsequent problems posed by Hurricane Katrina and the ones presented by Ian.
“There will be a significant slowdown in the job openings in the state, [but] it’s a very strong economy, and hurricanes are not new to them,” said an economist at ZipRecruiter.
“Hurricanes have differing economic effects, depending on whether the area is one that people are moving into or out of. Hurricane recoveries tend to accelerate whatever economic transitions might have been underway when the storm hit, leaving a building surge in growing areas but economic blight in contracting areas,” added Englund.
Photo Credit: Giorgio Viera
Source: CNN
