Red flags dot a bright 2019 economic horizon for Miami
Written by Michael Lewis on January 22, 2019
An economic program of the Greater Miami Chamber of Commerce last week pinpointed glowing pluses in Miami’s future but also raised five red flags that we shouldn’t ignore.
Speakers at the 10th annual Economic Summit pointed to strong momentum here with job growth far outpacing a solid national gain, a good push from sports and entertainment, a thriving visitor industry, and the advantages of our trade hub.
Yet five warnings lurk: the trade sector depends on unsettled global dealings shaken by economic saber rattling; our filming and entertainment sectors lack vital incentives; global woes could rain on our tourism, trade and investment parades; we rely on local immigration to grow Miami population just as rules face tightening; and we are woefully short of required tech talent as low-tech jobs vanish.
In a national outlook, Charles Dougherty, Wells Fargo vice president and economist, looked to tourism and trade as Miami’s drivers this year. “South Florida, to me, is trade and tourism,” he said.
Yet while forecasting a trade accord with China, Mr. Dougherty noted difficulties. The pressure is on China because the US buys 20% of its exports while US exports to China are a far lower percentage of our total. Still, he said. “there is so much to lose on both sides.”
He noted that the economies of trade partners Brazil and Mexico are starting to slide. The upside, he said, is that much of the US economy is holding back waiting for that trade agreement. As a trade hub, Miami will suffer from that uncertainty. “That might be a headwind for this area,” he said.
Summit panelists cited a need for incentives to two competitive industries.
The film industry had the props kicked out from under it when Florida ended crucial incentives to filmmakers, who quickly decamped to incentive-heavy states. Focusing on those incentives, Miami Mayor Francis Suarez told the summit “I just want an equal playing field. If we have an equal playing field, we will win.”
Summit participants also called for a state nudge to the music industry via tax credits. Said Alex Hernandez, Iberriabank’s director of sports and entertainment banking, “That’s what brings the business.” Atlanta and Puerto Rico, he said, have direct investment that Florida doesn’t provide.
The chamber is to advocate for that help in a mission to Tallahassee this week, said CEO Alfred Sanchez.
Population influx is crucial to Miami-Dade, whose existing residents dwindle yearly. We depend on newcomers to expand. Mr. Dougherty noted that “employment growth is incredibly strong in this area,” with the talent need met by an international influx here of 80,000 persons in 2017 alone. Tightening of US borders could threaten growth.
That factors into the most alarming warning flag: we lack enough seasoned technically skilled professionals to fill the kinds of higher-paying jobs that are just beginning to surface in large numbers.
If we don’t add high-level tech workers in large numbers we’ll never be able to lure to Miami-Dade an Amazon 3 or its equivalent when a large company looks to move or expand.
That gap became clear when Jason Liberty, executive vice president and chief financial officer of Miami-based Royal Caribbean Cruises Ltd., told the summit breakfast of his company’s rapid additions to digital workers dealing with artificial intelligence and analytics. In just a few years, he said, Royal Caribbean expanded that sector to more than 600 workers here – but the area is so short of talent that the company must fly 500 members of that team into and out of Miami weekly.
“The actual talent that we need to support our effort is not here in South Florida,” Mr. Liberty said, and training is needed here for job growth.
A panel discussion entitled “Are the Robots Really Coming for Our Jobs?” backed up his concerns. The panelists agreed that technology will displace today’s low-tech workforce but that high-tech workers are being trained here – which was the good news. The bad news is that those being trained are still near the bottom of the tech ladder, and the mid- and upper-level workers – the kind Royal Caribbean is flying in – aren’t yet here in large numbers.
As Susan Amat, founder and CEO of Venture Hive, told the group, “80% of the jobs of the current kindergarten class have not been created,” and the percentage is fast increasing.
While companies seek more senior talent, said Romi Bhatia, executive director of the Idea Center at Miami Dade College, our talent is nearer the starting line.
For that reason, said Greg Hanifee, associate dean of the executive MBA programs at Kellogg Northwestern University in Coral Gables, we must support immigration into the US to bring the people we need – the kind Royal Caribbean must fly into South Florida.
Miami alone can’t change the global economy, but clearly some of the state incentives and support for highly skilled immigration efforts deserve backing as we build economic underpinnings for our future.