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Bay area's unemployment question shifts from how high to how long

Only days into a new year and decade, our economic message is shifting from "how high" will the unemployment rate go to "how long" will the Florida recovery take?

I wish I had better news. I'd counsel patience, but we're not a patient state. And the more than 1 million Floridians already out of work don't want to hear it.

New economic forecasts for Tampa Bay and Florida continue to predict tough times ahead. Those times clearly will last longer here than for the nation as a whole.

Most economists expect Florida's unemployment rate to head higher over the next six months. That means the statewide jobless rate — yes, such predictions have proved too optimistic before — should top out at around 12 percent by the middle of 2010 before it starts to decline.

Since the statewide jobless rate is now 11.5 percent and Tampa Bay's is higher at 12.3 percent, our metro-wide unemployment rate could hit close to 13 percent before peaking. That would mean more than 170,000 folks without a job in this metro area alone.

As Wells Fargo economist Mark Vitner notes, only 15 of Florida's 67 counties now have unemployment rates below the national average of 10 percent. None of those 15 counties are near Tampa Bay.

But it is the length of our slow recovery, measured in years, that may be more daunting than jobless rates.

Here's a likely scenario, posed by Vitner and others, that could create a drag on our economic bounceback:

1. While area housing prices continue to decline, increasing insurance costs and property taxes mean the overall costs of buying a Florida house may not prove as appealing to potential buyers.

2. The long-held myth may finally be fading that Florida can return to the 1980s and 1990s as a warm weather place that is less expensive to live and conduct business.

3. If Florida can no longer pitch itself as cheaper, then it must become better prepared to compete against nearby Georgia, Alabama, the Carolinas, Tennessee and Texas to attract new industries.

4. Private investment in Florida businesses and capital backing entrepreneurs still are sorely lacking here compared to many other states. It remains Florida's financial Achilles heel.

5. Florida's public finances situation remains precarious, with sales tax receipts accounting for 60 percent of state revenues and property taxes providing the bulk of local revenues. Such a mix, Vitner notes, has "proven toxic" in past recessions and left the state with a serious budget shortfall. That has forced cuts in services, as well as tax hikes and increased user fees.

Bottom line? Consider 2010, 2011 and maybe even 2012 as years when Florida must learn to solve its shortcomings.

Eventually, Vitner argues, the same Florida that drew earlier generations of Americans will overcome today's challenges. "The recovery will just take longer than most Floridians would like," he says.

How long can we wait? Must it be more than 5 minutes?

We're not a patient state. We grab quick fixes that look good for now but do little in the long run.

Maybe it's time for a new New Year's resolution.

Robert Trigaux can be reached at trigaux@sptimes.com.

Bay area's unemployment question shifts from how high to how long 01/04/10 [Last modified: Tuesday, January 5, 2010 7:00am]
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