>> Orlando will surpass Miami as Florida’s fastest growing metropolis, spurred by a booming health sciences complex, cheap housing prices and above average job growth. Orlando will be one of the most rapidly growing cities in the country over the next 25 years, predicts Well Fargo economist Mark Vitner. Starting in the early 2000s, Orlando’s economy has grown while Miami’s has declined. “There is a shift slowly under way as far as jobs go” , observed a Brookings Institute economist. With the rapid expansion of the Lake Nona medical cluster, Orlando’s economy is becoming more diverse than Miami’s. It has growing ties to the global economy compared to Miami, which is primarily a conduit to business in Latin America. -- Institute for Economic Competitiveness/UCF: Orlando poised to grow faster than Miami (Barbara Liston, Orlando Sentinel), 27April2011 >> Allowing insurance rates to be determined by market forces will effectively control growth and steer development away from vulnerable coastal areas. Actuarially sound insurance rates will encourage large carriers to return to the state and end the use of cheap insurance to promote growth -- a de facto policy that has impeded the development of a functioning market. Rates that are market-based will also attract companies to Florida by reducing uncertainty about the cost of insurance from year to year. -- Florida Trend: Citizens needs to be put on a steep glide path to extinction. (Mark R. Howard), June 2011 >> Florida will have a more diverse employment base than in the past as it becomes regionally competitive in 22 industries -- the broadest range of any state in the country, according to Wells Fargo economists. But this diversity will not necessarily translate into widespread gains in employment. High rates of job creation will occur in those industries that are the fastest growing, and some -- especially in high tech fields -- will usually not hire in large numbers. Wells Fargo identified several sectors likely to see the most rapid expansion: health care and social services, hospitality, state and local government, finance and insurance, business and consumer services. Projections of accelerating growth will be scaled back following public sector layoffs and reduced government spending in health care, medical research and education. These job losses will not likely be balanced by new hiring in real estate, construction and retail trade which will remain sluggish. -- St. Petersburg Times: Florida is best positioned state for growing jobs long-term, Wells Fargo says. (Jeff Harrington), 14April2011. New York Times: Just because a field is fast growing doesn’t mean you can get a job in it. Most of these occupations require advanced training and graduate degrees. (Cecilia Capuzzi Simon), 13April2011 > > Florida’s middle-aged unemployed will need jobs to support themselves but the few available will be low-paying, unsteady and lacking health insurance and other benefits. Prolonged periods of unemployment force those laid off in mid-career to dip into their savings and take on debt in order to survive. Many are already carrying a heavy debt burden with mortgages and car payments. With high-paying jobs in short supply, those lucky enough to find work will rarely be paid as much as they were before, making it harder to pay off past debts. Competition for entry-level jobs will be severe because younger people may have more up-to-date skills and will work for lower pay. Paying for medical care and prescription drugs will be an ongoing struggle at the time of life when health care costs will increase. Those in poor health will find it difficult to get and keep any kind of employment. Unprepared financially for retirement, many in middle-age who are now jobless will be coping with impoverished old age. >> Florida will be trapped in a vicious circle in which a moribund market for real estate, high levels of joblessness, and weak consumer spending all reinforce each other. Florida is continuing to lose jobs in construction, government and financial services while regaining some jobs in retail, tourism and health care -- primarily lower- paid home health aides and clinical workers. Many of the newly created jobs pay less than the ones lost, and lower average wages means less disposable income to spend in retail stores and restaurants. Without enough customers, business will close or lay off employees, adding to the jobless rolls. Other states have seen new job growth in the manufacturing sector, but Florida’s factories make products related to housing, for the most part. Raising the minimum wage is being considered elsewhere in the U.S. as a means of stimulating the economy, but Florida is not among them. However, Florida is among the five states offering the stingiest unemployment benefits. Unable break out of the cycle, Florida’s recovery from the economic recession will lag behind all but Nevada, according to Wells Fargo economists. -- St. Petersburg Times: Why Florida’s unemployment rate is so much higher than the national average. (Jeff Harrington), 27March2011 ; Sarasota Herald Tribune: Sunshine state in shadows (John Hielscher), 28March2011 >> Slashing state and local public payrolls will weaken Florida’s feeble economic recovery. Dismissed workers will add to the the already high unemployment rate and many will remain jobless for many months. Those public employees who escape the downsizing will see cuts in discretionary income as wages are frozen and benefit costs are passed on to them. The cumulative impact will be lower demand and consumption that will be felt by struggling merchants in the state, predicts Chris McCarty of UF’s Bureau of Economic and Business Research. -- University of Florida News: Floridians grow suddenly optimistic about economy, UF research finds. 25Jan2011 >> Finding a job in the new Florida economy will often mean accepting a lower standard of living. Despite a modest upswing in hiring, the growth is at the low end of the wage scale. Few of the well-paying jobs have returned, either in Florida or across the country. The predominance of low-paying jobs will have a ripple effect. The newly hired will live in low rental housing, eat cheaper food, and spend less on nonessentials -- especially if gas prices continue to rise. Smaller household budgets will mean shrinking sales tax revenue for the state, prolonging the era of severe fiscal shortfalls. -- St. Petersburg Times: Lowered wages may be new reality for former big earners. (Robert Trigaux), 24Feb2011 >> Florida will be the epicenter of the fastest growing occupations in the next decade. The five categories that will add the largest number of workers, according to BLS, are personal and home care aides, food preparation and serving workers, customer service representatives, home health aides, and registered nurses. Most of these occupations pay relatively low wages and require little education beyond high school. By 2020, about 15 percent of the labor force could work in health care, reaching more than 25 percent by 2050 if current trends continue. -- Bureau of Labor Statistics Employment Projections, 2011. >> The Great Recession will depress wages long-term. Entering the job market during a recession will have a long-lasting, negative effect on wages.and many of the unemployed will be unable to re-enter the job market without taking significant wage cuts and a downgrading in job quality. Their pay will be very slow to return to pre-recession levels. The children of unemployed parents will also earn lower pay when they enter the workforce, compared with those who parents who did not lose jobs. Low-income families are especially vulnerable to long-term economic and social damage. But with lower wages, U.S. industries will become more competitive, allowing employers to hire more workers. -- Knowledge @Wharton: Not a lost generation, but a disappointed one -- the job market’s impact on Millennials. 27Oct2010; Wall Street Journal: Downturn’s ugly trademark -- steep, lasting drop in wages (Sudeep Reddy), 11Jan2011; Investors Insight: Global aging and the crisis of the 2020s (Neil Howe and Richard Jackson), 12Jan2011. >> Miami will do better in good times, and worse in bad times. Its economic mix of tourism, real estate, import trade from China and export trade to Brazil and the Latin zone will make it especially vulnerable to downturns. With the U.S. economy on the rebound, Miami should be among the top performing cities in 2012 and 2013, predicts Chris Lafakis, an economist for Moody's. The continuing inflow of people and investment from outside the country will help feed the next boom (just as the sovereign debt crisis in Europe caused a recent dip in condo sales and prices). -- Miami Herald: Some forecast a robust rebound in Miami-Dade (Douglas Hanks), 05Feb2011. >> Employment in Florida will sharply rebound during 2011, predicts Moody’s Economy.com, with construction hiring leading the way (up more than 25%), followed by natural resources and mining (an increase of 4.6%) The boom in global agricultural production will increase the demand for phosphate, and the state’s forestry industry will see benefits from increased building and the growing demand for biomass. Biofuel production is a commodity business and the big winners are more likely to be the owners of feedstock (biomass and waste) than the biofuel producers themselves. Employment in each of these sectors will grow significantly as grain production expands and the rising cost of energy speeds the transition to biofuels. -- St. Petersburg Times: Florida’s job growth to top other states in coming year. (Robert Trigaux), 10Nov2010 >> Florida will lag behind other states in reducing joblessness, and the U.S. as a whole will lag behind the other G-7 countries. Globalization and technology has caused unemployment to rise in every industrialized country, but the current economic recovery has failed to produce corresponding job gains only in the U.S. The reason may be traced to other differences. Compared to the rest of the G-7, the U.S. has higher levels of income inequality, does a poorer job of educating its workforce, has weaker labor unions, has a more fragile social welfare net, and a government more interested in protecting the financial sector than promoting the Main Street economy. -- Salon: Why is the U.S. so awful at job creation? (Andrew Leonard), 18Jan2011. >> Unemployment will remain high because many of the jobless were not contributing to the economy. Their productivity was lower than the cost of training, employing and insuring them and their elimination from the work force tended to improve the profitability of their former employers. Those whom companies found to be most expendable were often the poorly educated and unemployment rates for those with no more than high school educations will remain perilously high after the rest of the economy has recovered. Government efforts to lower long-term unemployment should emphasize retraining for more economically productive work and assistance in relocating to areas with better job prospects. -- Foreign Affairs: Ten percent unemployment forever? (Tyler Cowen and Jayme Lemke), 05Jan2011 >> The Gulf of Mexico oil spill will delay Florida’s recovery by a least a year. UCF economist Sean Snaith predicts the impact on tourism will eventually ripple through other areas of the economy – especially businesses in the supply-chain for tourism – companies not likely to receive compensation for their losses from BP. Florida’s leisure and hospitality sectors will not resume growth until 2012, he predicts. "The spill couldn't have happened at a worse time, when Florida's economy is extra susceptible because of the housing bust and fiscal crises in state and local governments," Snaith observed. -- Institute for Economic Competitiveness/UCF: Florida and Metro Forecast 2010-2040 (Sean Snaith and others) July 2010 >> Recovery will first occur in some of Florida’s larger metropolitan areas that are beginning to seeing a rebound in international trade and tourism, predicts Wells Fargo economist Mark Vitner. But commercial and residential construction will not see normal times while there is an oversupply of housing, a glut of foreclosures, and a large number of homeowners who are seriously delinquent and on the verge of foreclosure. -- South Florida Business Journal: Florida economic recovery will take time. 26July2010 >> The recession will inflict long-term damage on Florida’s economy. It will take time for workers to find jobs outside of construction, where most will never again be needed. As high unemployment persists, former employees will lose skills and contacts which are difficult to regain. Job loss will be aggravated by plant closures and the scrapping of equipment, while new capital projects are unable to get financing. The credit squeeze will also make it hard for small, innovative companies to get a start, throttling economic growth and job creation. “These are very traumatic events,” warns Harvard’s Kenneth Rogoff. “They have political consequences that you can see for decades. They have profound consequences on how the economy is structured. This is going to influence a whole generation that has been through this.” Shrinking the effective workforce will diminish the long-term economic potential of the economy. – Financial Times: Recession will leave permanent scars. (Chris Giles), 23Nov09; Financial Times: US long-term unemployment (Lex), 09July10 >> Florida’s economic recovery will stall as public sector jobs are victims of budget cutting. Less money for education, health care and social services will stifle the few areas of job growth in the state –increasing unemployment at a faster rate than the private sector can add workers at a time of slowed population growth, struggling property markets, and weak consumer spending. -- Florida Center for Fiscal and Economic Policy: Replacing 900,000 jobs lost in the recession could take years. (Alan Stonecipher). March 2010 >> People will be forced to save more for retirement and spend more for health care at a time when pay is poor and job insecurity high. The new economics of aging will entail frequent periods of joblessness and the likelihood of permanent unemployment past age 50. Expensive personal health insurance will be necessary to cover the inevitable scaling back of Medicare, and even current retirees should assume a 20 percent cut in Social Security benefits at some point. -- New York Times: Preparing for the inevitable bursting bubble (Ron Lieber), 27Feb10. >> The resumption of hiring will leave a huge number of the unemployed still without jobs as some occupational categories become obsolete. Over 50 percent of unemployed workers have no prospect of getting their old jobs back and many – mostly older workers – have failed to find new jobs after months or years of searching. The percentage of unemployed people looking for jobs for more than six months is at 45.9 percent – the highest in at least six decades. Job retraining will help some reenter the workforce but they will often be required to relocate, and moving can be difficult because of age, poor health, and family ties. --New York Times: In job market shift some workers are left behind (Catherine Rampell), 12May10 >> Near-term job growth will be in health care, education, temporary jobs, and the government sector, once state and local governments get their budgets under control. An important growth area for education will be job training programs for the long-term unemployed. Once the economy begins to improve, retail will be the next sector to begin hiring. But construction jobs will never come back to peak levels. –Morningstar: What can pull employment out of the rut? (Vishnu Lekraj) 07Aug2010 >> Florida will need more than 900,000 jobs to recover from the Great Recession, a gain that will take more than four years at the current rate of job growth. With unemployment, under-employment, long-term joblessness, and the wage gap between minorities and whites at historic highs, a perilously large percentage of Florida’s population face the prospect of prolonged poverty. -- RISP/FIU: State of working Florida (Emily Eisenhauer, Bernardo Oseguera, Carlos A. Sanchez), 06Sept2010 >> Demographic shift will be a “game changer” as Florida slowly recovers from the recession, predicts UCF economist Sean. M. Snaith. While Florida’s population will continue to grow, the rate will be lower than in the boom years. The growth once provided by retirees moving into the state will be a casualty of the recession, causing a demographic shift that may be permanent. Retirement will be delayed as older adults try to recoup losses from housing and investment accounts. The smaller numbers that do retire to the state may avoid areas (such as South Florida) where already steep property insurance rates are likely to climb even more, offsetting the drop in housing prices. Slower growth will keep unemployment levels relatively high until at least 2016. – South Florida Business Journal: Getting back to boom era job levels may take six years (Kevin Gale), 10Sept2010 |
Economic Outlook |
