3rd Annual Florida College Access and Success Summit Tougher Choices Jim Dewey 3rd Annual Florida College Access and Success Summit Tampa, Florida October 16, 2014

1980s Apparent Potential Fading By mid 1980s Income per capita ≈ US K-12 $/student near US Universities rising Future with high-skill jobs seemed in reach Falling income per capita in the 1990s and 2000s fluctuation around parity or decline masked by the housing bubble? Data from the U.S. Bureau of Economic Analysis

Relative productivity falling Data from the U.S. Bureau of Economic Analysis

Tougher Choices (2014) downward trend extremely hard to change Low skill starting point plus feedback effects Skilled jobs go to cities with lots of skilled jobs Labor market polarization Baby boom retirees No room to invest at current tax rates No support to raise tax rates Report at collinsinstitute.fsu.edu

Labor Market Polarization Routine Jobs Mid-skill Replaced by automation and info tech Non Routine Jobs Cognitive: High-skill Manual: Low-skill Wage gains concentrated in advanced degrees, certain STEM fields

Accounting for Florida’s Low Job Skill

Growing Retiree Influence Age 65+ in 2010 FL 17% US 13% Age 65+ in FL in 2030 1 in 3 Adults 2 in 5 voters Crowd out other export industries Change the nature of cities Less supportive of investment? Shift taxes to business

Lagging Human Capital Investment State Appropriation plus Net Tuition per FTE by Fiscal Year (FY 2013 Dollars)   2010 2011 2012 2013 Florida 8,768 8,447 7,867 7,416 US 11,331 11,419 11,226 11,523 FL/US 77% 74% 70% 64% FL Rank 49 50 Prior to the recession, state funding average, tuition low During recession, state fuinding fell sharply 50% increase in BOTH to catch US in FY 2013 Real K-12 teacher salaries falling, 84% of US average in FY 2014. Revenue data from State Higher Education Executive Officers (SHEEO). Deflated using the GDP deflator from the US Bureau of Economic Analysis. State appropriation recovered some in FYs 2014, 2015, but comparative data is not yet available for those years.

Summary Relative to US: income per capita ↓, output per worker ↓, high-skill job share ↓ , low-skill job share ↑ Trend hard to change due to five mutually reinforcing factors Low starting point plus feedback effects Labor market polarization Baby boom retirees No room to invest at current tax rates No support to raise tax rates Florida will likely be the subtropical corner of a safe, rich country, highly specialized in retirees and tourists There are worse things to be, but we could have been better Maybe we still can be better, but it will cost a lot more