Two of those economic forces seem particularly germane to Florida as the state's business climate evolves over the next decade. One is the much-discussed emergence of a global economy, where "because of transportation and communication technologies, for the first time in history you can make anything anywhere on the face of the globe and sell it everywhere else on the face of the globe,'' in Thurow's words.
The tiny size of Florida's manufacturing sector has insulated the state to some degree from the initial shocks as the global economy emerged. But the state's massive service industry sector is no safe harbor, as recent events show. Florida Trend's Barbara Miracle wrote more than a year ago about companies in Florida transferring their call center operations to India, buying the labor of college-educated workers there for a fraction of what they'd have to pay for less-skilled U.S. workers.
That trend is picking up steam: Most recently, as part of their merger, Hewlett-Packard and Compaq will shift up to 1,500 customer service jobs from a company called The Answer Group in North Lauderdale to lower-paid workers at a call center in India. Broward County commissioners squawked, but there's not much recourse.
The trend also has played out recently in Jacksonville, with an interesting and disturbing wrinkle. Convergys shifted 40 jobs from its 3,000-employee call center in Jacksonville to India, but the jobs weren't basic-level phone answerers, according to a report in that city's Business Journal. Convergys kept its lower-skilled workers in place but moved jobs that involved more sophisticated technical support for Cisco switchers, routers and firewalls. The U.S. employees had been paid an average of around $40,000 a year.
Convergys' move is not the smoothest public relations move imaginable, given that the state of Florida will pay the company $280 million over seven years as it outsources a chunk of state government's personnel services administration -- benefits and payroll work and the like. You'd like to think that having received such a nice chunk of business from Florida, Convergys might avoid relocating exactly the kind of tech-related jobs that the state prizes and has a tough time developing.
But the tough truth, of course, is that the same economic logic holds true for skilled tech jobs as for less skilled jobs. In today's world, if a company can get an English-speaking employee with a good work ethic and advanced technical and mathematical skills for a third of what it costs to hire a U.S. worker and there are no logistical reasons to keep the job onshore, the company is likely to take the savings. With the decline of unions, there's no political recourse for the workers and not even much friction for companies that outsource overseas. (In addition, the process of moving jobs around the globe is getting easier and more organized: Check out a website called www.outsource2india.com.)
The second of Thurow's tectonic economic plates is demography -- specifically, the domination of society by the elderly. By 2010, more than 40% of Florida's population will be over 50. By 2025, one in four residents in Florida will be over 65; nationally, the elderly will make up a majority of all those who vote.
Some in the state see retiring Baby Boomers, flush with savings and inheritances, as a collective gold mine; there's even a government-appointed commission called Destination Florida that aims to make sure Florida continues to attract its share of the New Elderly.
Aside from seeming like a coals-to-Newcastle strategy, that approach is based on some potentially dangerous assumptions: One, that the present pattern will continue in which substantial numbers of the elderly move to Florida, spend freely and then "re-retire'' back to the Northeast or Midwest as their health and finances decline. Another assumption is that the elderly will continue to provide the state with a huge net economic benefit: One study indicates that "mature residents" generate $2.7 billion in sales taxes while costing the state about $1.28 billion in health and human services expenditures.
Any significant change in the first pattern would likely shrink the net positive impact substantially. Also, as we know, "mature residents" vote -- and may decide over time that they want or need a bigger slice of the state's health and human services expenditures. The numbers also ignore the portion of the federal tax dollar spent on the elderly. Florida needs to be extremely careful about building too much of our economy around expectations about the leisure and consumption habits of seniors.
In any event, with or without the commission, Florida will be particularly sensitive to the movement of the tectonic plates of demography and globalization. As with the geological plates, we can't do anything to stop them, and we can't predict the timing of the earthquakes -- only that they will happen. The best we can do is invest in a state economic and social infrastructure that will be sturdy. Earthquakes can uncover new possibilities -- new veins of gold. They can also bury you in your own house if it's not built well.