Sick economies: What can DNC, RNC expect?

NEED TO KNOW
  • Florida's housing market was one of the worst hit by the housing bust
  • North Carolina still suffering from double-digit unemployment rates
Sick economies: What can DNC, RNC expect?

The presidential election is quickly approaching as both major political parties prepare for the upcoming national conventions. The conventions are a way to give Democrats and Republicans a platform for officially nominating a presidential candidate and a way to kick off the official campaign that will ultimately decide the future president of the United States.

The selection of convention sites is a lengthy, complicated process. State and local governments across the country often actively seek conventions because of the economic benefits a city can reap from the large number of delegates, party officials and media representatives that attend. And, of course, the national publicity generated by the event doesn’t hurt.

Both parties this year will converge on states once known to be part of the “Solid South,” where Democrats reigned for a long time before Republicans took over. But the Bible Belt isn’t exactly what it used to be as demographics and voter priorities have changed, resulting in two true battleground states. The Republicans head to Tampa, Florida, the week of August 27, while Charlotte, North Carolina, will host President Barack Obama and the Democrats the following week.

Obama won both states four years ago, thanks in part to young voters, nonwhites and suburban independents. Both states are up for grabs this year and strategists say it’s important for these candidates to understand the changing demographics and voter priorities of these people, because whoever doesn’t will probably come up short of a victory.

So why Florida and North Carolina? The local economy is usually what makes a site a microcosm for the country as a whole. With housing and jobs at the forefront of this election, these are two states that still need a lot of help. It’s no secret this country is in trouble, so the concern for voters now is: How are we going to get out of it?

Republican National Convention – Tampa, Florida

Up first is the Republican National Convention, which will take place in Tampa on August 27-30.

So why put the spotlight on the Florida economy?

Although the state has seen some bursts of improvement, they aren’t really a true reflection of the state’s overall economy. Over the course of recent years, Florida has been rocked by high unemployment, record foreclosures, high poverty rates and slowed population growth. Since 2009, more than 100,000 Florida jobs have been lost; Florida’s median income has declined $3,369; 45% of all Florida home mortgages are underwater; and more than half a million more Floridians have fallen in to poverty.

During the first quarter of this year, of all 50 states, Florida had the second-highest percentage of underwater mortgages. The housing bust really crippled Florida borrowers, along with the state’s housing market in general, and the recovery has been painfully slow.

Democrats and Republicans go back and forth on who’s responsible for the state’s successes and who’s responsible for the troubles. The state of Florida’s economy has improved some in some areas, but it’s still nowhere near what’s considered normal. The state's Republican Gov. Rick Scott often touts the 127,000 private-sector jobs that have been added in the state since 2009, rather than the number of jobs lost, which were mostly seen in construction and the public sector.

“While the unemployment rate can vary from month to month, Florida continues to see positive private sector job growth,” said Scott in a press release. “My goal remains the same, to make Florida the No. 1 business destination in the world by improving the state’s economic climate, highlighting our talented and skilled workforce and getting Floridians back to work.”

According to the Help Wanted OnLine series by The Conference Board, Florida online job postings in July led the country in over-the-month growth in job demand by adding 240,000 openings. That’s an increase of nearly 30,000 more jobs compared to July 2011. Who’s hiring? The fields with the most online ads posted were sales and related occupations; health-care practitioners and technical occupations; office and administrative support occupations; and computer and mathematical occupations.

But even with these glimpses of improvements, Florida’s economy still needs some help.

Scott says as a state government, his office is doing the right things. He said the state is reducing taxes, reducing regulations and state agencies are working with businesses to get more jobs to Florida. Scott says what’s keeping the state from moving forward is a lack of help from the federal government. Scott still isn’t satisfied with the state’s economy but says it’s headed in the right direction. He sees the state’s 8.6% unemployment rate as a sign of improvement, declaring on his website that it’s “the lowest it’s been since December 2008!”

But this is about the president. Even as Florida’s economy sees spurts of improvement, recovery is slow, and voters want to know how the state is going to get back to the booming retirement haven it used to be.

The issue of Florida’s economy will take center stage for both Obama and Mitt Romney as they battle over the state’s 29 electoral votes. The state was severely battered by the recession and the housing bust in particular, and it’s still recovering at a disappointingly slow pace. So if Florida is a model for the U.S. economy, what will it take to get the state and its people up and running again? That’s what we’re hoping to find out.

Democratic National Convention – Charlotte, North Carolina

The Democratic Party will get its chance in the spotlight when the Democratic National Convention hits Charlotte on September 3-6, just one week after the RNC. Obama won the state’s 15 electoral votes back in 2008, but it was close, and strategists say it may be close again this year. Holding the convention in Charlotte may give Obama the edge he needs in order to keep the state.

Like Tampa, Charlotte was also hit hard by the housing bust, but unemployment has been an even bigger issue in this state. North Carolina has had a hard time overcoming double-digit unemployment rates, overflowing homeless shelters and the state’s notorious restrictions on labor unions. The state’s unemployment rate in July was still 9.6%, well above the national rate of 8.2%.

Homelessness has also been a major issue in Charlotte since the economic downturn. In 2010, the city experienced a 36% jump in family homelessness, and just the next year, there was an additional 21% increase. Those figures come from an annual report from the U.S. Conference of Mayors, a nonpartisan policy group. Homelessness like that in Charlotte often involves families living in run-down extended stay hotels, and in some cases, in cars.

And on top of all that, for a long time about 60 neighborhoods in Charlotte’s surrounding Mecklenburg County have been without easy access to a full-service grocery store. These food deserts have put more than 73,000 low-income residents at risk of health issues, because they’ve had no access to fresh food nearby.

Housing

Plans for tackling the country’s still struggling housing market will be important in this election.

The S&P/Case-Shiller home price index tracks prices of the same homes over time in major markets across the country. By studying repeat sales of the same home, the index is supposed to give a more accurate home-price level. The index has showed just how hard both Charlotte and Tampa have been hit over the past few years. As of October 2010, home prices in Tampa were down 43.2% from their peak, the fourth-biggest drop, just behind Miami’s home-value loss of 48.7%. According to the index, as of October 2010, home prices in Charlotte hit their lowest levels since prices began dropping between 2006 and 2007. Prices in the North Carolina city then hit record lows back in February.

The most recent data showed a 2.2% jump in average home prices across the country in May, up from April’s levels. But even a slight improvement isn’t necessarily a reflection of a turnaround. In fact, Charlotte was one of three cities to see annual returns worsen in May from the previous month.

Jobs, jobs, job

Unemployment, job loss and job creation are big issues in this election. About 13 million Americans are looking for work in this country, while an additional 8 million have settled for part-time jobs. So why have nearly half of U.S. employers said they’re having difficulty filling open positions?

There’s a skills gap in the United States, and it isn’t expected to get any better anytime soon. In order to fix it, there will have to be efforts from both the government and the private sector. The National Bureau of Economic Research attributes about one-third of the recent rise in the unemployment rate to a mismatch between open jobs and unemployed workers. Many of the people who were hit by the recession’s job losses, like construction and manufacturing workers, are either not looking for work in the areas that are hiring (such as health care) or they lack the skills required to get those jobs.

Private sector job growth is a key factor in reducing unemployment. Back in 2009, the federal government spent about $18 billion on 47 separate job training programs, though there has been some question about their effectiveness. The health-care industry took initiative and went after the nursing shortage last decade by offering scholarships and tuition reimbursement programs to encourage people to enter the profession. Another nursing shortage is expected after 2020.

State budget cuts have left students with a higher share of the bill for school, keeping a lot of people from enrolling.

So at the center of this election is the concern of how these employment issues are going to be addressed and how they will ultimately be resolved.

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