The economy, like roller coasters and action movies, has its ups and downs. But some say Florida, with its influx of wealthy baby boomers, is recession-proof.
Former editor, Wall Street Journal columnist and demographer Brad Edmundson doesn't think we should count on it. Edmundson is the vice president of epodunk.com, a Web site that provides in-depth information on 42,000 places in the United States. Crunching numbers, especially those that deal with baby boomers, is his specialty. He suggests that Sarasota and Manatee counties should be making long-term plans that don't depend solely on the demand for land and physical structures generated by a tourism- and retirement-based economy. It's not that he has a problem with an economy that caters to retirees, specifically baby boomer retirees. Edmundson, who was born in 1959 in Sarasota County, will be one soon. He's saying that, paradoxically, a regional economy that puts all of its eggs in the basket of wealthy retirees won't be all that attractive to boomer-age retirees. And, if our economy doesn't attract that demographic in the next few years, it could be downhill from here.
This area is touted as a retirement paradise. Can we bet on that for the future? That depends on whether you diversify your economic base and plan for a sustainable future. Right now your economy is vulnerable because of your dependence on in-migration from retirees and tourists. That influx brings in added revenue. It also brings in sprawl, congestion and increased pressure on natural resources, which ultimately erode the value of what attracted people to retire here in the first place.
But growth pays the bills. It's good for us, right? It can also be self-destructive. Construction, an adjunct of the tourism and retirement industries, is closely affected by interest rates. Tourism and retirement are vulnerable to recession, more so than most industries. When incomes go down, travel is the first thing people cut back on. What would happen if you took tourism and construction out of this economy? You'd shrink it by at least one-half. I'm advocating smart, controlled growth that pays for itself.
What will happen if Florida's boom goes bust? One of the interesting things about history is that whenever Florida is in a boom cycle, people forget that it was ever any other way. Look at what happened in Los Angeles in the early 1990s. The aerospace industry took a substantial hit and laid off workers, which produced a massive out-migration of native Californians who were replaced by people from Asia and Central America. This isn't necessarily a bad thing, but it does cause rapid cultural change. If Sarasota goes bust, middle-class and affluent people will move out, and people from the Caribbean and South America will move in. This will cause home prices to go down, and you'll experience an out-migration of people who can afford to find jobs elsewhere and in-migration from people for whom the prospects of a depressed economy are inviting.
What steps can we take to avoid this cycle? Well, this isn't anything new, but developing a diverse economic base is a necessity. Attract industries that include research, development and manufacturing-jobs that don't feed off tourism. This region has a manufacturing sector that's growing; it needs to grow further. Plan for the long term and place your energy and effort on non-tourism sectors.
Any particular industry we should be looking to attract? One of the most effective things to do is invest in education-in colleges and universities. The economic power a university creates is significant. One of the most desirable qualities baby boomers look for when they consider retirement communities is the presence of a university.
How do we entice industries here? Tax breaks? No. You entice industries here by maintaining a high quality of life. Florida is in the habit of setting the bar too low by offering industries tax breaks. Growth isn't cheap; business should pay its own way. Roads, sewers, street lights-these things cost money and we shouldn't subsidize the businesses that create the need for them. I'm talking about making long-term decisions now that won't pay off immediately.
What's most important for us to protect? Protect the stuff that brings affluent people and businesses to your area. Protect your open spaces with land trusts, develop and market your cultural amenities, put money into historic preservation, invest in education. It's the intangible factors of life that can be very powerful destination drivers. It all comes down to what you want this area to look like in 50 years.
Brad Edmondson's previous experience includes six years as editor-in-chief of American Demographics magazine, five years as a newspaper editor, and two years as a columnist for the Wall Street Journal. His freelance articles have appeared in the Atlantic Monthly, AARP Bulletin and other publications. His articles and speeches cover the aging of the baby boom generation, the future of higher education, changes in health and fitness behavior, and how America is being transformed by immigration. Recent clients have included Honda of America, The Aspen Institute and The College Board. A native of Florida, Brad is a graduate of Cornell University currently living in Ithaca, New York.