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Business Observer Thursday, Dec. 19, 2013 4 years ago

Those 700,000 jobs and how we compare

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When Jim Michaels was editor of Forbes magazine, he instilled in his editors and writers that this incisive, imperative question be answered in every story: “Compared to what?”
by: Matt Walsh Editor

When Jim Michaels was editor of Forbes magazine, he instilled in his editors and writers that this incisive, imperative question be answered in every story: “Compared to what?”

It did little good to report to readers, for instance, that a company's profits may have increased 10% in a year. It did much more good to show how that increase compared to that company's peers. Context.

That Jim Michaels admonition came to mind recently after digesting the three-part series produced by a joint effort of the Tampa Bay Times and Miami Herald on Florida Gov. Rick's Scott job-creation efforts.

Surely you remember that when Scott ran for office in 2010, he made his 7-7-7 campaign promise: 700,000 new jobs in seven years via a seven-step plan.

If you think about it, that was a gutsy promise — 700,000 new jobs in seven years. By doing so, Scott immediately painted a huge target on his back.

Scott was even gutsier when he later clarified that his promise was to create 700,000 new jobs over and above the one million jobs that Florida's Bureau of Business and Economic Research already was forecasting for the next seven years.

Ever since, the Tampa Bay Times and Miami Herald's Capitol press reporters have been sitting in their Tallahassee blinds just waiting with their shotguns full of buckshot, ready to unload. In early December, they did.

No surprise, here is the lead from the first installment of the three-part series:
“Gov. Scott has staked his political future on his ability to bring jobs to Florida, but the first comprehensive review of his efforts shows few successes and hundreds of unfilled promises.”

And here is the conclusion:
“The state has added jobs, a good sign after years of recession-driven losses. But Scott needs more job growth than ever to have a chance of fulfilling the promise he made ... Economists doubt he will reach his original goal ... For Scott to deliver, Florida needs to create 26,000 jobs a month, every month, for 50 straight months ... We rate this promise 'In the Works.'”

You cannot quarrel with the Times and Herald trying to hold the governor accountable. That's what taxpayers expect of the Fourth Estate. But it also certainly was predictable that the Tampa Bay Times and Miami Herald's reports would carry pretty much a “gotcha, you failed” tone; they detest the guy. Always have.

Equally predictable, Scott responded with three “Setting the record straight” news releases consisting of nine pages of “myth-and-fact” refutations of the series and defenses of his performance.

He'll never win that media battle. He knows it, and he knows he brought it on himself when he made the promise.

He also brought on this kind of scrutiny when, unfortunately, Scott jumped into the economic-development cesspool of corporate welfare: using taxpayer dollars to provide tax breaks and subsidies in exchange for jobs, mostly to companies that move into the state.

While Scott's approach uses a strict pay-for-performance contract with each recipient company — i.e., no money until the jobs are confirmed — this practice nonetheless is another example of government officials intervening into the market and picking winners and losers.

It's galling to see some company like Hertz obtain up to $19 million in subsidies while there are hundreds, thousands of small Florida businesses, which combined have created more than the 700 jobs Hertz will bring and for decades have been paying Florida taxes and not received one dime in government subsidies.

We wish Scott never would have sold his soul on subsidies.

But all that aside, let's get back to Forbes editor Jim Michaels' admonition of “compared to what?”

It's one thing to focus on whether Gov. Scott's new-job numbers are on track to reach 1.7 million new jobs in seven years. But also put what has occurred so far in comparative context.

Take a look at the table on this page. We've combined the total number of new non-farm jobs in each state from October 2010 (before Scott's election) to October 2013 with the increase (or decrease) in population in each state from 2011 to 2012, the most recent state population figures available from the U.S. Census Bureau.

With these combined measurements, you see which states are growing and thriving and which aren't. Indeed, talk to economists who track states' economic performance, and they will tell you population and job growth are critical to a state's economic dynamism. This has been true historically in Florida.

So by these two measures, Florida looks awesome. A great place to be, and a remarkable rebound from 2010.

No state these days can touch the economic dynamism of Texas. And based on the aggregate numbers, California looks like it has a robust economy again. But consider context. California's population is twice as large as Florida's, and its gross domestic product is almost three times greater than Florida's. These two factors virtually assure California's economy always will look better — even though we know its tax and regulatory climates are among the worst in the world.

Now compare Florida to New York, two states of almost equal population. When you look at the two tables on this page, you can see they each added about the same number of jobs from 2010 to 2013, yet Florida's population increased almost three times as much as New York's population.

That alone indicates how people are voting with their feet. They go where the taxes are lower and jobs plentiful. Indeed, it's no accident that Florida is ranking as high as it does.

While everyone knows Gov. Rick Scott nor the government, can create jobs, Scott can influence the economic climate with his policies and actions.

And on those two scores, Scott has proven quite a contrast to his predecessor — and appears to be outdistancing the vast majority of his fellow governors. The numbers tell the story.

So while the Times and Herald may criticize Scott for spending so much time at ribbon cuttings and recruiting businesses, we'll hail him for these efforts. Indeed, every business owners knows the cliche: Nothing happens until you make a sale. Someone needs to be on the street every day making calls. Who better for Florida than the governor?

To have a great state, governors know it's essential to have a robust, growing economy. And to have that kind of economy, you need the regulatory and tax frameworks that create the right climate. Once you have all that, you need someone to sell it.

Compared to other states, you can say of Scott's approach: It's working.

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