Florida's economic future lies somewhere between today's doomsayers and the Pollyanna praisers of the state's "extraordinary" turnaround.
The Sunshine State continues to face powerful drags. The latest culprit: a startlingly deep 14 percent, or $7,000, drop in median household income from 2007 to 2011. That's much greater than the nation's decline. And while income since then increased briefly, it has stagnated again.
Aggravating that loss in spending power are fast-rising costs. They range from escalating interest rates on loans and higher housing prices to looming hikes in both property insurance and draconian leaps in flood insurance premiums.
Add to that the nasty increases slated for 2014 in electricity rates. Duke Energy Florida wants to raise rates 7 percent and charge $124.30 for 1,000 kilowatts, about the amount an average home uses per month. Tampa Electric and Florida Power & Light are raising rates but still will manage to offer their customers the same amount of power next year for much less than Duke.
Thinner wallets. Higher prices. It's not a recipe for a rebounding Florida economy.
Dig deeper and the financial picture is still grim. More than 40 percent of Tampa Bay area home mortgages remain "seriously underwater," with mortgage balances that exceed the home's value by at least 25 percent, according to RealtyTrac. That means tens of thousands of area homeowners still have not regained any equity value in their houses and feel stuck where they are. Statewide, poverty increased nearly 50 percent from 2007 to 2011.
Florida's median household income peaked in 2007 at $51,854 only to plummet to $44,299 in 2011, a loss of more than $7,000 in just four years. The state's household income figure for 2012 is not out yet. Based on national income trends, Florida household income probably rose last year. But not by much.
Sure, more jobs are being added to the regional and state economies. Some pay well. But many tend to be lower-wage or part-time positions in the tourism industry — one of the sectors state leaders says is a hiring bright spot. Lower-wage employment is one reason household incomes are down. Many workers who lost jobs in the recession found they could replace them only with opportunities that pay less.
Since the end of the recession, U.S. household income has declined for most population groups in the country. So says Sentier Research, a Maryland firm that tracks income and demographic trends. The sharpest income drops hit lower-income households — those more vulnerable as technology continues to cut the pay for low-skilled labor. That includes blacks, Southerners, people who did not attend college and households headed by folks under the age of 25, Sentier said.
"Since December 2011, we have been in a period of income stagnation without any clear trend or direction," says Sentier researcher Gordon Green.
The former Census Bureau official says the failure of an improved labor market to produce higher levels of household income "raises troubling questions about the types of jobs created over the past year and a half, the level of pay that they generate, and the effect on household income levels from people who have dropped out of the labor force altogether."
Time may not solve this problem.
Tougher times may lie ahead for two reasons, warn economists Richard Burkhauser of Cornell University and Jeff Larrimore of Congress' Joint Committee on Taxation. Retiring baby boomers will increase the number of lower-income older individuals. And over time, relatively high-earning whites will be replaced by minority workers, especially Hispanics, who tend to make less money and who may not attain the same level of education and skills of the people they succeed.
The economists' conclusion? Americans' overall income growth in the next few decades could be weaker than it was in the 1980s and 1990s. That would result in a slower economy going forward.
Floridians' shrunken wallets may take years to fatten up.
Robert Trigaux can be reached at [email protected]