Along with California and Texas, Florida has positioned itself to be a national leader in economic growth in this century.
Spurred on by a massive population increase since 1970 (the Census now estimates the state’s population at 20.27 million, up from 6.8 million in 1970), Florida has built an economy that ranges broadly from construction, tourism and agriculture to IT, health care, banking and international trade. With a population that is as diverse as any in the nation, it has also built strong cultural, economic and banking ties to nations in the Caribbean and Central and South America.
Throughout much of its early history, Florida struggled to develop such a strong and diversified economic base. In the late 19th and early 20th centuries, political leaders doled out free land to anyone of wealth and to those who would start a business or locate a business into the state. It was a gamble that often boomeranged when these businesses collapsed, leaving the state with substantial debts.
After World War II, many Americans relocated to the state to retire or seek new opportunities. Air conditioning stimulated population growth, construction and tourism, resulting in dynamic economic growth. Florida also benefitted from an economic boom nationally in the late 1940s and 1950s. But when the nation’s economy slowed, Florida’s collapsed as population growth and tourism slowed to a halt.
While Florida is less susceptible to national economic crises today, the Great Recession of 2007-09 made clear that it is not immune. In this particular case, speculation in Florida real estate was widespread and the state was one of the nation’s leaders in making home loans to people who could ill afford to make such payments. Foreclosures in Florida ranked second nationally, and 42 banks closed after 2009. It took several years after 2009 to rebuild the state housing and banking industries.
Despite changes in banking and mortgage regulations, Florida is not out of the woods in real estate speculation. Many loans are being extended today to individuals who are no more capable of meeting their payments than they were a decade ago.
Florida’s economic promise faces other challenges that are equally daunting to its economic future. These include: the rise of ocean levels that threaten communities and properties along the southeast coast, an educational system that continues to rank among the poorest in the nation, and political divisions between ethnic and racial groups and seniors and young people about the future direction of economic development. READ MORE.