In Florida, Governor Rick Scott still seems to be looking for some way to improve the state's financial crisis - besides raising taxes on corporations, of course, which most reasonable people would think is a great idea but Rick Scott cannot seem to stomach. Since killing the high speed train, he appears to be feeling some pressure to create all those jobs he promised, and now he seems to think those jobs will come by way of the Panama Canal.
For anyone not following the situation in Panama, the Panamanians have flourished since we turned over control of the Panama Canal to them eleven years ago, and in 2007 they began a $5.2 billion project to expand the capacity of the canal. By building a third deeper and wider lock, significantly larger ships carrying up to 12,600 cargo containers each will be able to get through (current size of the locks limits ships to those carrying about 4,800 containers). Unfortunately, there is currently only one port on the East Coast that can handle ships of that size - the Port of Virginia. Realizing this possible opportunity, the Port of New Jersey/New York has already begun expanding and deepening its channel. Multiple other states began looking into port expansions as well, including Georgia, South Carolina, and Texas. However, the looming federal budget cuts have put all of these projects in peril. South Carolina and Georgia seemed to have realized in February that their plans were likely doomed, and although Texas is still hoping for funds to finish its preparation of the Port of Houston, dreams to expand the Port of Corpus Christi seem unlikely to materialize.
None of these realities, however, have dissuaded Rick Scott from enthusiastically declaring that this is a prime opportunity to add 30,000 permanent jobs to the state by dredging and expanding the port of Miami, to the tune of $77 million. In fact, Scott is so excited that he will be heading to Panama Thursday March 17th on his first ever foreign trade mission to learn more about the canal expansion.
Scott is trying to claim that although the high speed rail project he axed would have created 24,000 jobs, the dredging of the canal would create 30,000 permanent jobs. Problematically, however, no one can seem to figure out how he came up with that number - or find any evidence that it is remotely accurate. Notwithstanding one overly-enthusiastic news report that claimed that the Port of Miami expansion could result in 100,000 new jobs, most experts question any estimate of new jobs for Floridians stemming from a port expansion.
The reasons that permanent new jobs would be unlikely are numerous. Unlike Texas, which already has extensive rail and road structures leading to the Port of Houston that would allow the increased passage of goods to and from that port and the super-size cargo ships, Florida has no such thing. On the contrary, there is no major rail hub to or in the port of Miami, and the roads around Miami are clogged with traffic already. A ship that cannot unload its cargo for distribution to the rest of the US is going to find another port. Improving the road system to Miami would cost about $1 billion, and that money just isn't available. And as for improving the rail system to the Port of Miami - well, we know how Scott feels about railways.
In addition, these cargo ships are eager to get to the U.S. because they will be dropping off cargo to sell here. However, it is less clear how much the cargo ships will be taking back with them to China, Japan, or other points. Chinese exports have jumped by almost 50% in the past two years, while American exports have languished. A federal government initiative to double U.S. exports by 2015 was having some effect by mid 2010, but that growth has since stagnated. Florida's own manufacturing has dropped by 2% over the past year. The import of even more goods, with lower shipping costs due to the larger ships able to traverse the Canal, will further imperil the U.S.'s efforts to increase our own exports. While this is good for consumers who are looking for lower prices on goods, it does nothing for our own manufacturing, export potential, or job creation.
For a state like Florida, which has produced fewer manufactured goods for export over the past decade, has no way to get what goods are available for export to the Port of Miami, and no way to get imports from ships arriving through the Panama Canal to the rest of Florida or the rest of the country, the logic of pouring $77 million into a project to improve the Port of Miami seems shaky. Even Alberto Aleman Zubieta, the current administrator of the Panama Canal and the driving force behind the expansion, has been quoted as saying that two larger ports on the Eastern seaboard and one port in the Gulf Coast would be enough to handle the increased traffic through the canal, as opposed to the thirteen or so being considered by U.S. states - including the one in Miami.
“The East Coast has many ports, and the large container ships are not going to stop at every port,” Aleman said.
But logic and evidence to the contrary have never been known to sway Governor Rick Scott, and therefore we can assume that he will forge ahead with this idea, whatever the costs to the state of Florida and its citizens.