Did you notice a bump in your paycheck? The latest government data tells us that wages are rising fast in the Miami metro area, solidly leading the nation’s 15 biggest metro areas.
But don’t pop the champagne cork just yet. What that wage increase means to the paycheck of the worker in the middle is about an extra $1,300 a year, or $25 a week. That will pay a few more bills, but our economy still lags other urban areas.
That’s because the Miami area’s median wage, the point where half the working population earns more and half earns less, comes in dead last among the 15 largest metros, trailing some by more than $20,000 a year.
In the 12-month period ending in June, wages and salaries in the Miami-Fort Lauderdale-Pompano Beach area increased 3.9 percent, while total compensation that includes benefits was up 3.7 percent, leaving 14 metro areas, including San Francisco, New York and Houston, in its dust, according to the Bureau of Labor Statistics’ Employment Cost Index released July 28.
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That’s great news — with some caveats.
“We’re leaving the Great Recession further behind and we are getting back to normal. ... The jobless rate is falling, the labor market is getting tighter, and that means this last piece of the economic recovery, which is wages, is starting to move in the right direction,” said Mekael Teshome, PNC Bank’s Florida economist.
“But what this report does not tell us is what kinds of jobs are being created and how do the wage increases fare with the bigger picture for households. And on those two fronts, I think we do have some weaknesses,” he said.
In the second quarter of this year, Teshome said, 30 percent of the net jobs in the Miami metro area were in leisure and hospitality. “This report tells us that generally people are getting pay bumps but as a metro economy we are still leaning heavily on lower-wage employment.”
Also, he said, in South Florida housing costs are rising significantly more than wages and “that is a big risk to the economy.”
According to the index, the Miami area’s wage growth solidly outpaced the national growth for private industry workers of 2.4 percent. Of the 15 big metros, Seattle ranked second to Miami in annual wage gains at 3.6 percent, while the New York-Newark area was third at 3.5 percent growth. Washington, D.C., and Philadelphia ranked lowest in wage growth.
The Miami area’s wage gains are also accelerating. Three months ago, wages in the Miami area were growing at a 3.1 percent annual clip, and from June 2015-16, the increase in Miami was 2.9 percent, according to the government data.
Prior to the last downturn, wages were growing at 4 percent or more in the Miami area. “So at 3.9 percent we are getting into that normal range for wage increases, but on the other hand, we are still generating lower-wage jobs. That is keeping our median income down and housing costs are outrunning wage gains,” Teshome said.
Miami’s median annualized salary of $33,904 is the lowest among the 15 biggest metros and trails the U.S. median salary of $37,044, according to wage levels released by the Bureau of Labor Statistics in a different report earlier this year. To be sure, Florida’s favorable tax structure does put some extra bucks in the paycheck.
But of the 15 largest metros, the next closest to Miami is Phoenix at $36,679. By contrast, San Jose, California, was No. 1 with an annualized median wage of $59,696. The Washington, D.C., metro area was second with $52,270, followed by Seattle, at $49,192. Applying the wage increases, a median salary in the San Jose area would increase about $1,850; in Washington, by $1,300; and in Seattle, by $1,800.
Although not part of the wage growth report, other Florida metros also have low median wages, with the Tampa Bay area and Jacksonville coming in just slightly higher than South Florida.
But Miami does beat the land of the Mouse. Orlando holds the lowest yearly median salary of $31,408.
Nancy Dahlberg: @ndahlberg
What wage growth really means
Wages grew faster year-over-year in South Florida than in any other major U.S. metro area. But in other regions, workers got more dollars.
San Jose, California
Source: Bureau of Labor Statistics’ Employment Cost Index