Philip Porter, professor of economics at University of South Florida
Photo by JULIANA A. TORRES
Ed Peachey, president of WorkNet Pinellas
Photo by JULIANA A. TORRES
Carl Patten, director of health care policy at Florida Blue
Photo by JULIANA A. TORRES
Alex Glenn, president of Duke Energy Florida
CLEARWATER – Four experts in their field shared their perspectives on the upcoming year to members of the Central Pinellas Chamber of Commerce Jan. 21.
The breakfast program, this year dubbed Focus on 2014: A Tampa Bay Economic Forecast, is an annual event for the Largo-based chamber, held at the Sheraton Sand Key Resort in Clearwater Beach.
Ed Peachey, president and CEO of WorkNet Pinellas and the Tampa Bay Workforce Alliance, spoke first, sharing current statistics on the local work force. The slow but steady growth likely would continue in the upcoming year, he said.
“I think it’s pretty much going to be more of the same. I think unemployment is going to continue to go down. I think we’re going to have job growth in all industry sectors except maybe government, being that it’s an election year,” he explained.
Peachey called for the employers in the room to not leave the task of training tomorrow’s work force to colleges and universities.
“We need the employer community to step up and help train that next generation of workers,” he said. “We have to create more opportunities for internships and apprenticeships if we’re going to build a work force here in Tampa Bay.”
Carl Patten, director of health care policy for Florida Blue in Jacksonville, discussed the future of health care, much of which hinges on the implementation of the Affordable Care Act.
In general, spending on health care has slowed in recent years, even falling behind the rate of inflation one year, he explained. But that was a result of the recession, and the coming year is sure to see an increase in health care spending.
“The question is, to what extent?” Patten said.
That would depend on how the continual implementation of the Affordable Care Act plays out and how both advocates and opponents of different aspects of the federal law will fight for, or against, its implementation.
“There are a lot of strange bedfellows and strange enemies that are going to pop up as a result of this,” he said.
The Affordable Care Act isn’t the end solution to the problem of “the immovable object versus irresistible force,” Patten explained. Rising health care costs, particularly Medicare, are up against the immovable fact that “the country typically doesn’t want to pay more than 18 percent of GDP in taxes,” he said. The obvious solutions – growing the economy or cutting health care services or raising taxes – haven’t been working out.
“We’re going to have to figure out how to get more value out of the money we spend,” Patten said. “We spend $2.8 trillion a year in health care, far more than any country.”
Alex Glenn, president of Duke Energy Florida, reviewed the state of energy resources. Overall electricity usage per customer is down, despite the company serving more customers overall, thanks to increasing energy efficiencies, he said.
Glenn discussed the merits and drawbacks of various energy sources Duke Energy continues to pursue. The company currently relies on natural gas – for now a cheap source of energy, but historically the most volatile in cost – for 60 percent of its energy. Projections place shale gas, obtained within the United States through hydraulic fracturing or fracking, as the future source of reliable energy, he said.
Renewable solar energy continues to be an expensive and less effective source – specifically twice as expensive as natural gas, even factoring in reimbursements from government incentives, while only being a fifth as effective, Glenn said.
“The key to success in solar is storage,” he added.
Duke Energy will continue to invest in ways to store the energy during peak sunshine for use when Tampa Bay customers need the most power, particularly between 6 to 9 a.m. and 4 to 7 p.m., he said.
Glenn also said addressing the area’s transportation needs played a part in energy efficiencies, making a plug for the Greenlight Pinellas Plan.
“We’ve got to address our transportation issues. If we don’t, we’re going to get left behind,” he said.
Philip Porter, economics professor at the University of South Florida, was charged with concluding the event with an economic forecast. He focused almost entirely on the problem of income inequality.
A variety of factors led to the giant gap between the top 1 percent – those who make $400,000 a year or more – and everyone else, he explained. While globalization had the unforeseen consequence of creating more demand for the county’s highly skilled talent and less demand for unskilled workers at home, factors such as tax law changes and the shift to paying CEOs based on the stock of the company rather than its overall success unnecessarily increased the pay of those at the top, Porter said.
The problem now is the top 1 percent includes the members of Congress, who work to create, for example, agricultural subsidies for their income peers – larger companies rather than small farmers who compete directly against them, he said.
Even Social Security is a plan that takes from the majority and gives to the richest age demographic: those 65 or older, Porter said. Even local tax dollars often are used to incentive high earners – like larger businesses or professional sports teams, well stocked with earners in the top 1 percent – to stay or move into the area.
Some income inequality is necessary to incentive those working their way up the ladder with rewards for their hard work, Porter said. But today’s inequality is not the result of normal market forces, but rather the 1 percent supporting their own.
“My sense is you make income equality by letting the market take its place,” Porter concluded. “You interfere with the market, you get disruptions that look like 11 people vs. 3.5 billion, and that’s unsustainable.”