The Sunshine Economy: Florida Priorities Summit And Diversifying State’s Job Market
Florida's economy is booming by most economic metrics. The unemployment rate is near a record low. Over 125 million tourists will visit the state this year. And property values are still growing, even though the pace has slowed.
Still, among the fastest growing jobs over the past year, many remain in the relatively low-paying industries. Jobs in casinos, amusement parks and retail stores were added at a faster pace than the overall market over the past year, according to state data.
Diversifying Florida’s job market and working to raise average pay were two of the topics during a conversation about the economy at the Miami Herald’s Florida Priority Summit held Nov. 19 at the University of Miami.
Three people from different backgrounds were part of the discussion:
• President of technology conference eMerge Americas Melissa Medina
• Richard Florida with the FIU Miami Urban Future Initiative
• Wells Fargo Senior Economist Mark Vitner
This is an edited transcript of the discussion.
VITNER: Most of the (economic) growth was highly concentrated in a handful of industries in a handful of cities across the country. About 70 percent of the growth that occurred since the last recession occurred in the top 20 metropolitan areas. Those cities were either anchored to the global economy, like South Florida, or were anchored to the energy sector, like Houston, or anchored to the tech sector. If you weren't in one of those three areas, you didn't see a whole lot of growth.
What is the outlook for the South Florida tech sector?
MEDINA: I am very optimistic about the tech, innovative and entrepreneurial ecosystem, especially here in South Florida. Do I think that we still need to make a lot of strides in order to create a thriving tech hub? Absolutely. But I could tell you that we as a community have really stepped up in the last six to seven years.
How does this compare to 20 years ago? Is there escape velocity to withstand any economic softness?
MEDINA: I think the foundation is here. I'm not worried about it going backwards. I am worried about us not really seizing this opportunity.
FLORIDA: (When) you take what's going on in Orlando, around Disney, and you have three or four pools of technological activity (in Florida). We're going through this big disruption from an older real estate, hospitality, retirement economy to a really interesting new economy built on technology and other stuff.
VITNER: The question is, are we a disruptor or are we just being disrupted? I think increasingly we're seeing that we're becoming a leader in a number of fields. It's easiest and has the most momentum behind you when you go with areas of strength. So areas of technology that are tied to areas of Florida that are already large are likely to do better because that's where your source of funding is likely to come from. That's health care. It's financial services. It's everything related to retirees. It's international trade and everything related to Latin America.
MEDINA: We are a state built by immigrants. Immigrants have this innate entrepreneurial spirit. Some people might think, 'Oh, that's a silly idea.' But I think it would be incredible for there to be in an office of entrepreneurship that reports directly to the governor. Why not? If you're able to nurture that from a young age, startups provide an incredible amount of economic impact. They provide a lot of jobs in different sectors. We need all of our government officials paying more attention to that.
FLORIDA: Transitioning a hospitality and tourism and real estate driven economy to a tech economy is hard. But try transitioning an old industrial economy. That's a lot harder because the constraints on you if you're not growing. We are developing technologies — a lot of them related to what we're good at. We're good at real estate and architecture and construction. We can be a leader in urban tech. We're good at healthcare and life sciences.
We're talking about (economic) diversification for many different reasons. One of them, of course, is to lift the standard of living and the average wage in this hospitality service driven economy. How do we do that?
VITNER: That's tough. It's always going to be tough in Florida because tourism and retirees are always going to be more important to our state than they are to the nation as a whole. They both have a lot of relatively low wage part-time jobs in them. But if you look at the growth outside of those industries, you see that we are seeing a lot of growth in high wage jobs. Florida has the largest manufacturing workforce in the south and the seventh or eighth largest in the nation.
What are we making?
VITNER: We make a make a lot of aerospace products. We still make a lot of food products. (We make) a lot of medical devices. Two-thirds of our manufacturing is in durable goods, which is the higher wage stuff. We're making satellites now. Florida is going to change the world as we launched 5,000 satellites into space in the next five years and double the number of people who are on the Internet from three-and-a-half billion to seven billion people. And all that's happening in the Space Coast.
FLORIDA: The one thing we have to watch for is that so much of our (economic) growth has been concentrated in a handful of major metropolitan areas. The term I invented for this is winner-take-all urbanism. What that does is create something we know very well in this country — an urban-rural divide. People in the rural communities say, 'What about me?' I think it's something that Florida has to really grapple with. We've seen what it's done to our country — the kind of cultural, political division we live with. More than half of all jobs are in these low wage (jobs) are done predominantly by women and immigrants and ethnic and racial minorities. We're not going to grow if people in those jobs are condemned to low wage work.
One of the challenges in South Florida is housing affordability.
MEDINA: What I'm hearing from many of the entrepreneurs that I come across is that it's not cheap by any means. But when you compare it to the thriving tech hubs like Boston, New York, Silicon Valley, we are much more affordable than those.
Housing is relative, right?
VITNER: If you look at the 50 largest cities, 20 of them now have housing prices that are at least two to three times higher than average income because of that concentration of growth. In the south, the areas that still have affordable housing that are growing are Atlanta, Nashville, Charlotte, Raleigh. If you look at LinkedIn data on the LinkedIn jobs report, you see that there's a migration away from the established tech hubs to those cities because housing is still reasonably affordable. But it's getting tougher and tougher for people that live in those markets to find affordable housing.
So are we risking future growth because of the constrained housing costs?
FLORIDA: The problem in Florida, particularly in the greater Miami area, is not housing for tech workers. It's housing for poor. The affordability problem here is because low wage workers don't make enough to afford housing.
Is it solving for the wage, or solving for housing?
FLORIDA: Both. But those wages have to come up. The bigger problem facing the state, I think is the talent problem. We still don't have the talent base. Maybe if we have the talent base, but it's in the wrong places. We've got to build up our talent base and build up an educational infrastructure and support the educational infrastructure that we have here so that we have the talent.
When you're talking about the talent issue, there's human capital already in place in neighborhoods all across south Florida. It is not necessarily part of the creative class per say. They are working in health care services, hospitality. The challenge is raising those incomes.
FLORIDA: We've got to give them a path to upward mobility. If they don't see a path to upward mobility, they don't have a future. Their kids don't have a future.