Thursday, June 21, 2018
Business

Five Florida-style economic questions that Obama, Romney should ponder

Without a doubt, high unemployment, the federal deficit and Medicare will dominate the presidential debate over the next seven weeks.

But it's time to drill a little deeper.

Here are five economic issues particularly relevant to Florida that President Barack Obama and Republican challenger Mitt Romney should address if they want to successfully woo this crucial swing state.

1

The jobs quandary: Quantity versus quality

The raw unemployment number dominates headlines, but the quality of jobs created could play an even bigger role in jump-starting the economy.

A recent study by the National Employment Law Project found that low-wage occupations accounted for 21 percent of the jobs lost during the Great Recession and a commanding 58 percent of jobs gained during the feeble recovery. Mid-wage occupations totaled 60 percent of jobs lost during the downturn but only 22 percent of the growth since then.

It's been the same story in Florida. In fact, with the number of higher-paying jobs in the state's construction industry more than halved during the recession, the hit on income here may be more acute.

Lower-wage jobs mean less disposable income, which doesn't bode well in an economy where consumer spending is by far the biggest economic driver.

Romney says that overhauling the country's tax, trade and energy policies will create conditions that allow the private sector and entrepreneurs to create jobs and grow the economy. He wants states to create "personal re-employment accounts" for the unemployed to help place individuals directly into companies that provide on-the-job training. Obama wants to spend more on infrastructure, hire more state and local workers, increase the payroll tax cut and add a new set of tax cuts for small businesses.

2

Charting an energy policy that works

Will Obama push policies that let the Sunshine State morph into the Solar Energy State? Will Romney push to restart idled nuclear power construction or clear the way for more offshore drilling? Will either candidate allow ''fracking'' for natural gas to continue largely unabated, driving down prices and postponing the need to tap other energy sources?

Florida's future depends on the answers in many ways.

The next president's energy policy could have a huge impact on Florida's tourism industry, which is heavily dependent on affordable gas and jet fuel to attract visitors.

It could affect Progress Energy Florida's plan to build a new nuclear power plant as well as whether it opts to spend millions to fix its broken Crystal River nuclear plant.

If drilling is allowed off Florida's coastline, the state's economic and environmental fortunes could be profoundly affected. Both Obama and Romney have supported increased offshore drilling, but Romney endorses being more aggressive in drilling in the Gulf of Mexico and the Arctic as well as off the Atlantic coast.

3

Fixing the safety net

As an epicenter of the Great Recession's housing bust, Florida has more than its share of the poorest of the poor nationwide. But some programs geared toward helping the hardest hit are being targeted for cutbacks.

More than one out of six Floridians, or roughly 3.5 million people, are on food stamps, compared to the U.S. average of about one out of seven. The state has gotten singled out by national organizations for having one of the stingiest unemployment insurance payouts for jobless along with new, strict requirements making it tougher to qualify in the first place.

A study this summer reported that the number of Florida's children living in poverty jumped 35 percent from 2006 to 2010. Nearly one in every four Florida children, or about 924,000, live below the federal poverty line, according to the report from the nonpartisan Voices for Florida. The statistics were particularly harsh for minorities, with about two-thirds of black children statewide living in low-income families.

Both presidential candidates have talked frequently about Americans devastated by the recession, but piecing together a strategy to salvage America's social safety net is a harder conversation. Romney has proposed capping Medicaid spending (with future increases tied to the consumer price index) and saving $60 billion by eliminating fraud and waste; Obama, whose signature legislation thus far has been the health care overhaul that is still unfolding, charges that Romney's plans would force 200,000 Floridians to pay more for prescription drugs.

4

Propping up Florida's shaky property insurance market

Property insurance is not a big topic on the presidential campaign trail.

But for Floridians, it's a pivotal pocketbook issue that just won't go away even after a string of seasons in which the hurricanes largely stayed away.

Despite signs of a housing rebirth with mortgage rates remaining near record lows, fixed-income homeowners are hard-pressed to keep up with double- or triple-digit increases in their insurance premiums.

Citizens Property Insurance, the state-run insurer of last resort, is on a mission purposely designed to disenfranchise its customers. The company wants to raise rates and cut coverage as much as possible to try to force policyholders into the open market.

Ever since Hurricane Andrew in 1992, the state has been grappling with ways to keep property insurers writing new policies without approving huge rate increases. Florida regulators still have not been able to convince insurers that the state is a safe bet against catastrophic payouts. The shrinking of options on the private market has pushed Citizens' policy count past 1.4 million.

Here's where the presidential candidates come in. Florida politicians of different political persuasions have urged the federal government to step in by creating a national catastrophe insurance fund to alleviate some of Florida's risk. Romney supports creating a national catastrophe fund. Obama signed legislation in July that mandates the Federal Insurance Office to prepare a report for Congress discussing natural catastrophe risk coverage.

5

Finding palatable ways to boost international trade

No one wants America to be isolationist. But the choices that the U.S. makes in promoting trade with other countries have huge ramifications for Florida.

Enterprise Florida estimates that 1.1 million Florida jobs are related to international business, and international trade has been one of the bright spots during this tepid economic recovery. Florida exports rose more than 11 percent over the past year while imports have risen nearly as much.

A long-delayed free trade agreement between the U.S. and Colombia went into effect in May, creating more Latin America opportunities for Florida traders.

Gov. Rick Scott has seized on international trade as an important economic linchpin, making expansion of Florida's ports one of his key initiatives. And the state's Cuban-American community — particularly in South Florida and Tampa Bay — is watching closely to seek if the 50-year-old Cuba trade embargo is ended or eased. The relaunch of direct flights between Tampa and Cuba in 2011 could set the stage for further easing. Romney has been critical of Obama for relaxing sanctions unilaterally without making human rights demands of the Castro regime.

Jeff Harrington can be reached at (727) 893-8242 or [email protected]

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