From the Bench: October 2011
Conversations about the economy are increasingly speaking about structural problems versus cyclical problems. In short, this equates to the difference between hearing your pest-control representative tell you that the cross-beams in your floor need to be replaced (structural) as opposed to just needing the more routine application of more termite retardant (cyclical). As you can imagine, the former requires far more of our attention and financial pain than the latter.
Consider four areas that make the case for structural issues. First, in cyclical unemployment, workers in need of jobs eventually transition from one type of job to another with no or little need for retraining or self re-invention. However, a larger percentage of the unemployed have been out of work for the longest-time in history. Software upgrades and new technologies, even those as seemingly basic as word processing, have come and gone creating a gap between the skills offered at the time of employment and the abilities needed for re-entry. This means that those returning to work can expect to be underemployed — taking jobs for which they would have been overqualified for at the time they left the job market — while they or their employer take on the expense (i.e., time and money to get back up to speed).
To put a finer point on it, The Florida Scorecard (www.TheFloridaScorecard.com) illustrates that, in April 2011, there were 33,600 jobs available to be filled in STEM-related fields requiring skills sets currently beyond the nearly million Floridian’s seeking work. Florida is projected to grow demand for these skilled workers by 20 percent by 2018 (using 2010 as the base year). Meanwhile, only 25% of 8th-grade students scored “proficient or above” for math—a critical knowledge base needed in this job creating industrial cluster.
Other structural issues have emerged, as well. The U.S. government’s debt burden and the budget challenges facing local and state governments means the ability of tax-based funding to serve as a source of growth is, at best, challenged. Access to capital — the credit crunch — seems no closer to resolution as bank profitability, foreclosure loads, new regulations and contractions in interbank lending loom. We also do not have the supplies of energy and water to satisfy the projected growth needs within the Sunshine State.
What can be done to find solutions to these and related structural issues we face? The first path to prosperity requires understanding the reality of the situation. Abusing the termite analogy offered earlier: we can’t fix the problem of years of infestation with a dose of Ortho® brand pesticide. Getting to and understanding the core issues are critical to assessing alternatives that provide workable solutions. This is tough work. Although entomology springs from the hard sciences (e.g., physiology) and makes eradicating termites a matter of science, economics is a mix of science and art, just malleable enough to make impossible the control necessary in experimental design to ever fully test the competing theories.
Rather than turning the concluding paragraphs here to convince you of any particular set of solutions or invoke an epistemological debate, perhaps we can agree that a great place for finding solutions is in asking the right questions. The Florida Chamber Foundation’s work, culminating in the Six Pillars framework, helps with the critical work up front of focusing those questions on the structural issues rather than the cyclical symptoms.
Our Talent Supply & Education and Innovation & Economic Development pillars take on the mismatch between workers and jobs. Government funding (and the corresponding expense side) is included in Civic and Governance Systems. Access to capital solutions will come from examining Business Climate & Competitiveness. Energy, water policy and a dozen others are discussed within the dialogue taking place within the Infrastructure & Growth Leadership and Quality of Life & Quality Places pillars.
If you’re a member of the Six Pillars Caucus System or your community is engaged in strategic planning using the Six Pillars framework toward becoming a Six Pillars Community, then you already know this. Where conversations are still locked in the short-term arguments about cyclical symptoms, then you’re missing the opportunity to develop long-term action plans that get at the root cause of the issues we face.
Join us in the pursuit of solutions necessary to secure Florida’s future. For more information about how you can contribute to our discovery and action plans, send me an e-mail at dbrill@FLFoundation.org.
