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Trigaux: Key economic statistic shows Florida's economy is lagging

 
Published June 12, 2015

It's the wrong season to say so, but Floridians are getting a snow job about the state of our economy.

We're not faring well compared with many other states. And when stacked against the other big population states (California, Texas, New York and Illinois), the recent numbers are humiliating.

Of course, we do not hear such things from our Tallahassee elected. To them, our economy is a red-meat-rippin', pedal-to-the-metal powerhouse just aching to bust loose as the envy of the global market.

Yet anyone who examines the state's "per capita gross domestic product" — nerdspeak for the amount of Florida's economic output divided by the number of people in this state — may want to quit sipping any more of the Tally Kool-Aid.

In 1997, for example, the Florida's per capita GDP was $36,127. In 2013, it was $38,384. In other words, 16 years later, one Floridian produces on average a mere $2,257 more in GDP. That's a microscopic 6 percent gain.

In that same time, California's per capita GDP rose 29 percent to $53,497, New York's increased 30 percent to $62,420 and Texas was up 27 percent to $52,465. Nationally, per capita GDP increased 20 percent in those 16 years.

Face it, folks, we're not keeping up with the economic big boys — or the country as a whole — no matter how much happy talk we hear from the state.

To be fair, the recession smacked Florida a lot harder than many other states. It has taken longer after the recession technically ended in 2009 for this state to start getting its economic house repaired.

So part of the question is: Is the stagnation in Florida's per-person GDP a long-term problem or is a rebound merely being delayed?

Economist Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, acknowledges the state is behind. But he sees some daylight ahead.

"With every new jobs report and economic data release, Florida puts greater distance between its economy today and the economy that was crippled by recession, housing and financial crises," he said.

This past week, we learned Florida's overall GDP rose 2.7 percent in 2014, faster than any other state in the Southeast. Snaith sees that growth advantage continuing, which means Florida's per capita GDP will start to play catchup with other states.

"I do see the gap closing as we go forward," Snaith said Friday in an interview from Jackson, Wyo., where he spoke to bankers before some R&R trout fishing.

His prediction: Florida's economy will expand over the next four years at an average annual rate of 3.1 percent.

The trick, of course, is whether Florida's real progress will require a few years — or a few decades — to make up for lost GDP growth.

Yes, Florida is attracting more jobs, or at least jobs promised to come in the future, from expansions by bigger-name companies based elsewhere (like Texas and New York). But those jobs apparently remain a drop in the bucket as contributors to our state GDP.

Remember, the dollar figures in this column do not represent wages, but individual slices of our state GDP.

A few things are driving this lack of momentum.

As Snaith noted, Florida's GDP suffered longer than other states'. Then it failed to keep up with the recent gains in state population, increases that pushed Florida ahead of New York to No. 3 nationally. That combined to shrink Florida's per capita GDP.

Second, the type of economic output making up Florida's GDP is of lesser value than that generated in some other states. When a Floridian, on average, generates $38,314 while one Californian averages $53,497 of economic output, that's a difference of more than $15,000 of GDP per person.

That kind of GDP deficit does not sound like a state on the cutting edge of a 21st century economy. In fact, a Floridian in 2000 produced just about the same economic output as a Floridian in 2013. That's treading water.

Florida leaders, especially Gov. Rick Scott, have gone gaga in recent years over the years of record tourism in the state. No question, it's a prosperous piece of the Florida economy. I'd send a personal thank-you note to Harry Potter, whose theme park attraction at Universal Orlando is a powerful people magnet — if I knew his Hogwarts' email address.

But tourism jobs pay on the lower end of the wage scale. That's one more reason the value of Florida's per capita GDP output is making such modest headway.

Snaith agrees, to a point.

He said Florida's booming tourism industry just keeps getting bigger, which dampens the effect of Florida's attempt to diversify its economy.

"You have this big muscle that keeps getting larger," Snaith said of tourism. That, he reminds us, is not necessarily a bad thing.

"I know a lot of 90-pound-weakling states that would like to have that muscle," he said.

No argument there. But tourism can't hold a candle to more sophisticated, higher-skill jobs that are starting to drive other states.

This past week, the Brookings Institution identified the hottest 15 metro areas for advanced industries. That means industries characterized by their "deep engagement with research and development (R&D) and science, technology, engineering, and math (STEM) workers," said Brookings. The kind that "drive regional and national prosperity."

Of those 15 metro areas, Utah and California each have three. Texas has two. The rest are spread one apiece among North Carolina, Washington, D.C., Massachusetts, Washington (state), Michigan, Kansas and — yes — Florida.

The Palm Bay area, better known as Florida's Space Coast, was singled out for its "small but potent portfolio of advanced industries primarily engaged in aerospace and defense."

Well, Florida, that's a start. Even with renewed energy to diversify the state economy, this per capita GDP comeback may take quite some time.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.