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VHS Economics in Florida

Tuesday, October 11, 2016 15:01
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Last week tech policy guru Adam Therier spoke at the State Policy Network Annual Conference on the state of innovation in the states, and what he said highlighted a steep contrast between reality of the dynamism in the labor market and Florida’s economic development focus. Technology and the economy are changing quickly but Florida’s policies have not kept pace.

Take for example driverless automobiles. The tech is not perfected yet, but driverless trucks already operate in Europe and they are soon coming to the United States. Awesome for car drivers, as the roads will be safer. Awesome for consumers, as drastically decreased supply chain costs will inevitably result in lower prices for consumer goods the trucks deliver.

But what about the actual truck drivers and their jobs?

Just like many other jobs in a dynamic, global, robotic, and internet connected global economy, they are going to be automated and never come back, despite BLS projections, which have been shown to underestimate skilled job growth. The White House estimated an 83% chance that jobs under $20/hr will eventually be automated. 

Florida has approximately 72,000 truck drivers with annual wages averaging about $37,00 per year – $18/hour. Uh-oh.

But in when it comes to economic development in Florida, the discussion around “losing” jobs is never really about true job destruction but about the lack of business incentives- a bureaucratically administered government program distributing financial benefits to out-of-state firms that was developed in the early 90s.

THE EARLY 1990s!!!!!!!!!

 Think about that – you were watching movies on a VHS tape when this program was created in Florida. Some young people reading this won’t even know what VHS is, that’s how old it is. Technology moved on, government did not.

 Yet they still tell us we’re losing jobs because we aren’t offering incentives, and that to fill employment gaps we need more incentives.


 The dynamic, global, and interconnected economy is why we’re losing jobs. And there simply is no logically consistent economic argument (or any empirical evidence) which proves that incentives will reverse or prevent impending job destruction.

 Is Enterprise Florida prepared to pay for each and every of the 72,000 jobs about to go away? Absolutely not. No reasonable economist would say that is an efficient way to approach job creation.  

 So how will those truck drivers get their jobs replaced? Gaining jobs to offset and overcome those losses requires embracing the dynamic, global and interconnected economy.

 A promising answer, the one provided by Thierer, is permissionless innovation. The only answer to jobs being destroyed is for new jobs to be created by the private sector and entrepreneurs – not bought with public money. It’s about fostering an environment that is neutral to existing firms and new firms so that rapid iteration can occur, as opposed to trying to incentivize older industries. It’s not about picking winners and losers, but about government being neutral to the entrance of firms and jobs into markets and equally neutral to outdated firms and jobs exiting the market. Instead of giving public benefits to industries deemed “qualified” – instead of spending its energy trying to fine tune incentives – Enterprise Florida could be building its entrepreneur support and examining polices that might be inhibiting entrepreneurs, like Florida’s egregiously restrictive occupational licensing regime. 

Truck drivers could conceivably be Uber drivers, a job provided by private sector investment and innovation like the kind developed in the environment of permissionless innovation. But that is just one idea among many already being created and many more not yet conceived. But that is only going to happen if Florida gets serious about the innovation economy and leaves behind the VHS economics development of yesteryear.


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