Employment impacts and industry workforce shifts in the Florida Panhandle post-Hurricane Michael

Abstract

Disaster-impacted communities are expected to experience a brief economic disruption, but less resilient communities are at risk for prolonged economic decline, increased unemployment, and shifts in industries and workforces. Florida is historically susceptible to hurricanes, having experienced six major hurricanes (> 110 mph winds) from 2000 to 2021, including Hurricane Michael, a rare Category 5 (> 157 mph winds) in October 2018 that devastated the already economically vulnerable Florida Panhandle. The area experienced a stagnant recovery, and it wasn’t until 2021 that a state-funded economic revitalization program was implemented to aid business restoration. An analysis of unemployment and employment rate trends for all Florida counties that experienced a major hurricane between 2000 and 2021 was conducted to quantify Hurricane Michael's economic impact compared to the other major hurricanes. Using difference-in-differences analysis, results found that the coastal counties impacted by Hurricane Michael experienced up to 11 months of significantly increased unemployment compared to other major Florida storms, from which counties only experienced up to two months of increased unemployment. Additionally, to provide context to the results of Hurricane Michael, observations of the volume trend of employee counts by industry were used to show that during the post-storm year the area saw a reduction in the hospitality, retail, health care and social assistance, and educational services workforces, yet an increase in the construction sector. This study highlights the need for increased disaster resilience against economic disruptions, the anticipation of post-disaster workforce disruptions, as well as support services for workers in a longstanding disaster recovery area. Furthermore, while post-disaster revitalization programs can be beneficial, building economic resilience to support rapid adaptation and recovery is more sustainable.