Economic changes in Miami, Florida following the September 11 attacks

¶ … economy changed in Miami Florida after the terrorist attacks on New York City after 9/11/01?

According to a recent study conducted by the Florida International University College of Business Administration and the Greater Miami Chamber of Commerce, Florida, after the 9/11 terrorist attacks is paying a high price for security for almost two years now, compelling companies to re-evaluate whether to continue doing business in Miami Florida and if so, then how to move about in making it a success (Robert, 2003).

Furthermore, the economic effect of increased Homeland Security measures along with the U.S.A. Patriot Act has been tremendously negative. According to the author of the study, FIU professor David Wernick;

There is a risk that key South Florida industries could be seriously undermined by mandates that drive up business costs, disrupt global supply chains and deter foreigners from vacationing or conducting business here while ultimately doing little to increase national security (Robert, 2003)."

The Initial results consisted of a study of 136 companies, including healthcare, trade, retail, hospitality; international banking and real estate found that the international commerce has been one of the industries that has been hit the most by increased security measures (Robert, 2003). While, the final results of the study released in a white paper and sent to Gov. Jeb Bush, the U.S. Department of Homeland Security along with the Florida congressional delegation suggested that the security policies has been now more economically practicable and business friendly (Robert, 2003).

Economy after 9/11

Cargo-intensive Customs inspections have increased from seventy-five per month before 9/11 to 1,200 in June 2003, which is growing wait times at the Port of Miami, according to survey responses by the Port of Miami Terminal Operating Company (Shannon, 2003). Moreover, ports have increased fees to help cover costs for additional docking time, security and overtime (Shannon, 2003).

While, officials with Tropical Shipping have stated that it will cost approximately $11.2 million to companies to act in accordance with a recent law obliging them to arrange required detailed cargo descriptions twenty-four hours before setting sail for the 150,000 containers they annually ship to Port of Palm Beach. According to their estimation yearly security fees will cost an additional $2.3 million.

In addition, a number of companies shipping into Port of Miami have reported damaged goods and loss in business due to delays, making them consider taking their business outside the United States (Shannon, 2003).

Some European and Asian exporters that have traditionally used Miami as a trans-shipment hub for goods destined for the Caribbean and Latin America are considering rerouting their cargo through the Bahamas, Panama, the Dominican Republic and Jamaica to avoid the added costs, hassles and delays associated with the new security mandates," said Mr. Wernick.

One-third to one-four of business at Port of Miami, Miami International Airport and Port Everglades consist of trans-shippers, who use South Florida as a stopping point on their way to other countries. Mr. Wernick further added;

Over the past two years, we have spent tens of thousands of dollars on security-related personnel and equipment. Additional user fees at this junction would be a heavy burden, given the industry's slim operating margins (Shannon, 2003)."

According to the study, banks have been hit with costs for increased staff and attorney fees as well as have lost business due to Patriot Act regulations. While, one of the international banks in Miami have reported a loss of approximately $20 million of deposits in the past two years, which it credited to those customers who took their business offshore.

Law firm Shutts and Bowen also reported that the majority of its hundred banks and financial-services clients have sought legal advice for $200 to over $300 hourly. The study also found that a proposed law that would cut down visa holders' stay in the United States from six months to 1 month would have stern consequences on the real estate and retail industries (Shannon, 2003).

Yearly equal to $2 billion is generated by foreign-based real estate purchases in Florida, while, the average foreign visitor spends $230 per day on retail, according to the study. A response from Miami-based Star Supply officials was that they witnessed sales drop up to 50% at a recent local footwear expo and credited the reduce speed to new visa regulations that banned Latin American buyers from attending (Shannon, 2003).

We are accustomed to having buyers come to us in Miami. With the new travel policies, we will have to go to our customers and look for new markets outside the Americas," a representative of Star Supply said in the survey. "It is not only bad for us, it's bad for the local economy (Shannon, 2003)."

During the month of May in the year 2004, approximately 37% of Florida voters have rated the United States economy as good or excellent, which is quite well above the national average for the month of 31% (Rasmussen Report, 2004).

While, the report also fund that Floridians (34%) rated the economy as just while the remaining 28% said poor. While, nationwide, 33% of all adults rated the economy as poor. 33% of Floridians during the month of May believed the United States economy was in a depression. However, that figure was considerably more bearish 40% (Rasmussen Report, 2004).

Conclusion

Even though, six months after terrorist attacks leveled the world trade center sending trembles throughout the United States economy, there are signs the economy is on the recovery. However, looking at the other side, in Florida, there are still apprehensions that dependence on sales tax and tourism dollars have left the state more defenseless to economic consequence than as compared to other states. Furthermore, Florida Tax Watch issued a briefing that provided few insights into how the Florida economy charged over the past six months within the five biggest states (Tax Watch, 2002).