A second real estate boom and resurgent hiring market haven’t made a dent in Miami-Dade’s poverty problem or allowed local incomes to regain ground lost during the recession, according to a new study.
The report by the Metropolitan Center at Florida International University offers the latest detailed look at the Miami area as one where circumstances favor the very rich and make it very difficult for the poor to escape their economic lot.
Miami-Dade’s poverty level in 2014 matched where it stood in 2010, a time when the local unemployment rate topped 10 percent and real estate values were still plunging from an historic housing crash. That’s despite record hiring levels and the lowest unemployment rate in eight years.
“We’ve got more total employees in Miami-Dade than ever before,” said Kevin Greiner, an author of the study. “But since the recession, a lot of the good, middle-income-paying jobs have not returned. And they’ve been replaced by lower-income-paying jobs.”
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For every dollar of income for the lowest 20 percent in Miami-Dade, members of the top 5 percent earn $40. That 40-to-1 gap is well above the national average of 29-to-1.
Among the findings of the FIU study:
Gladeview suffers more “distress” than does any neighborhood in Miami-Dade County. The enclave of about 12,000 people wedged between Miami’s Brownsville and West Little River areas scored poorly in a string of economic scales created by the Metropolitan Center. It finished near the top in terms of residents without high-school degrees (17 percent), population in poverty (45 percent), children in poverty (20 percent) and unemployment (27 percent).
Miami-Dade County has one of the least affordable housing markets in the nation. People are considered “cost-burdened” by housing when more than 30 percent of income goes toward a place to live. By that measure, Miami-Dade has the third most cost-burdened housing market in the country, behind two counties in the New York area. In Miami-Dade, 51 percent of households are considered cost-burdened. The problem is much larger among renters (62 percent cost-burdened) than among owners (43 percent).
After adjusting for inflation, the typical Miami-Dade household earns less than it did at the turn of the century. In 2014, the median household income in the county hit $42,926. That’s 12 percent less than it was in 2000, when measured in today’s dollars. And while inflation outpacing income gains has been a national trend, the FIU report notes the situation is worse in Miami-Dade.
For every dollar of income for the lowest 20 percent in Miami-Dade, members of the top 5 percent earn $40. That 40-to-1 gap is well above the national average of 29-to-1. Even so, Miami-Dade finishes well down the list of the nation’s most unequal communities, with Manhattan taking the No. 1 spot with an 88-to-1 ratio. In Florida, only the 48-to-1 gap of Alachua, home to Gainesville, finishes higher.
It wasn’t just a housing bubble. It was an economic bubble.
Howard Frank, director of FIU’s Metropolitan Center
Poverty remains as high as it was at the end of the 2007-09 national recession. In 2010, Miami-Dade’s poverty rate hit 20.4 percent. That was the portion of residents living in poverty, which for a family of four is defined as earning less than $25,000 a year. In 2014, Miami-Dade’s poverty rate remained at 20.4 percent.
The report amplifies what analysts see as a divide between broad recoveries and how consumers see their personal circumstances. At the end of 2015, Miami-Dade posted a record 1.14 million non-farm jobs, and housing values as measured by the Case-Shiller index are up 18 percent from five years ago (but still down 25 percent from their peak in early 2007).
“You can say the economy is getting stronger and it’s getting better,” said Robert Cruz, the former chief economist at Miami-Dade County who now holds the same post at Florida TaxWatch. “But it’s not being felt at the household level. And for good reason. Most of the urban areas are seeing a hollowing out of the middle class.”
FIU’s report was commissioned to support a string of prosperity initiatives backed by the liberal wing of Miami-Dade’s County Commission, led by Chairman Jean Monestime. He tapped commissioners Daniella Levine Cava and Barbara Jordan to join his Council for Prosperity Initiatives shortly after taking office in early 2015, and the panel was listed as the official sponsor of FIU’s study. (The $40,000 tab for producing it was paid by CitiGroup’s community-development arm, according to FIU.)
The report touts some of the initiatives addressed by the council, including the creation of land-trusts to promote workforce housing, and deals known as “community benefit agreements” that tie businesses to hiring targets and other assistance in exchange for government approval of a project. The report is being unveiled at a conference Wednesday at the Hyatt Regency in Miami titled “A Prosperity Agenda for Miami.”
Edward Murray, another author of the FIU study, said the focus needs to be on adding a stable source of decent-paying jobs to an economy that relies on low-paying hospitality work and thrives when construction booms.
Murray said the housing crash that began in 2007 also took with it thousands of well-paying construction jobs, and then sparked local governments and school systems to shed workers in the face of lost property taxes. While overall employment is up 7 percent in Miami-Dade compared to the end of 2006, local-government jobs are down 14 percent. (Construction is even worse, down 22 percent, according to state labor data.)
“It wasn’t just a housing bubble,” said Howard Frank, director of FIU’s Metropolitan Center. “It was an economic bubble.”
The loss of good-paying jobs from the boom days reversed Miami-Dade’s encouraging track when it came to income inequality, Murray said. The ratio between the top 5 percent and bottom 20 percent dropped sharply between 2000 and 2007, to a low of 31-to-1. “Miami-Dade was almost the model of shrinking income disparity,” Murray said. “But in 2008, the brakes were hit.”