A new study puts Miami’s efforts to shift its economy away from its traditional hospitality base towards higher-skilled services into perspective—but also shows that an old problem may be rearing its head.
In its annual “Scoring Tech Talent in North America” report, real estate group CBRE calculates that between 2012 and 2017, Miami added 4,080 tech jobs, representing a 21.5% increase over that time period.
Even better news: Miami is now producing thousands of tech-degree graduates—6,025 over the past 5 years, CBRE says. That includes degrees like computer engineering, math, and statistics.
But as one can see, the grads-to-jobs math doesn’t quite add up: The city needs 1,945 more tech jobs to employ all those grads, CBRE suggests.
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As a result, Miami finds itself in the “drain” column when it comes to brains—as opposed to gaining them.
It’s not a new problem for the city, though it does not appear to be as bad as it once was. And Colin Yasukochi, CBRE director for research and analysis, says even brain drain represents an opportunity.
“The positive side to a brain drain is capacity for tech employers to hire more workers and they have a large new supply of potential workers coming from local universities each year,” he wrote in an email.
But the CBRE data suggest another force pushing local talent away: Miami companies are underpaying their high-skilled workers, making the cost of living seem much higher.
The group calculates that the average tech wage in Miami is $79,539. That’s well above Miami’s mean annual wage of $46,760—but when it comes to tech wages, only Rochester’s and Cleveland’s were lower. Yasukochi said this was due to the type of tech employment in Miami, which tends to be heavily weighted in computer support, database and systems tech workers, which are lower paying that software developers and programmers.
But even Miami programmers are relatively underpaid, Yasukochi noted. Only Cleveland and Madison pay their programmers less than in Miami. The average programmer wage in Miami is $84,409. For comparison, Orlando pays its programmers $91,280 on average.
Brian Breslin, director of LaunchPad at the University of Miami and founder of local tech nonprofit group Refresh Miami, said that Miami companies seem to be dragging their heels on giving out competitive pay packages to workers.
“In an increasingly competitive global market for talent, Miami startups are going to need to start offering more incentive to keep their staff from fleeing to Silicon Valley, where salaries average 50% more than South Florida,” he said in an email.
Separate data from Indeed.com show Miami ranked 4th-lowest on where salaries go furthest, out of 185 metros. The jobs search site looked at median salary data for the Miami area from all job postings with annual salaries on Indeed.com between July 2017 and June 2018. It then indexed it against a federal cost of living index for the area.
The Indeed analysis found that while the median listed salary on the site is about $64,000 (far above local median household income, which is weighed down by hourly work here), after adjusting for South Florida’s cost of living, the effective salary is less than $60,000.
“The region has both a high cost of living and fairly low salaries to begin with, especially relative to other large metros,” Indeed.com chief economist Jed Kolko said in an email.
CBRE’s report also adds key context to the contention that the cost of running a business is less in Miami than in competitive markets. CBRE’s data show Miami is the 6th-most-expensive city in the U.S. when it comes to office space cost, at $37.25 per square foot. Commercial leases in Austin, Chicago and even Amazon-dominated Seattle all come cheaper.
Overall, Miami ranked dead last on CBRE’s overall tech talent score sheet. In an email, a CBRE spokesperson said this was due to Miami’s combination of being a smaller market, having a lower concentration of tech talent and tech industry players, and being more expensive. It fell to last place from third over the year, as other markets saw faster growth in tech jobs and their overall tech sectors.
For Manny Medina, the founder of cybersecurity firm Cyxtera, the issue of brain drain in Miami is still apparent—but not nearly as bad as it once was.
“I still think you see talent flight,” he said. “Even in the cyber industry, I see how many folks I meet from down here that have left because the opportunities are much bigger outside. But the conversation is much different than what were having five years ago, let alone 15 years ago. There’s a momentum.”
Mike Cuesta, vice president of marketing at Miami healthcare tech firm CareCloud, says that while Miami has become an easier sell as a destination for talent both homegrown and from outside the region, it is not yet a slam dunk.
“From a career perspective, it’s still a bit of challenge to talk through that [with candidates],” he said. “For the people we bring in, we really focus on the idea of the impact they can have on the company. It’s by no means easy.”
Other Miami tech scenesters say there are still plenty of opportunities to be found here. Alia Poonawala, general manager for coding school Ironhack Miami, said that while program graduates have relocated, students who are “successful in the classroom and put in the work” are able to find jobs locally in South Florida, whether it be Miami or Fort Lauderdale.
“We don’t feel we’re reaching a saturation point here,” she said.
Some in Miami are creating their own opportunities. Jessica Do founded Palmpress Coffee in 2015 to sell an invention she came up with that lets users create their own hand-pressed caffeinated brews. The business is going strong—with about 700 units moved a month, mostly through Instagram—but Do remains its only employee, and works out of a home office.
Still, Do, who previously worked in finance in London and New York, says Miami offers opportunities many other places don’t for high-level entrepreneurs like herself.
“I would not have had this space or the sunlight—this natural sunlight I enjoy working from home—or even building out a home office, as I would have in other cities because of the space and cost,” she said.
CBRE does show Fort Lauderdale showing a net positive “brain gain,” with 4,641 tech degrees added and 4,860 tech jobs added. Fort Lauderdale ranked 10th overall in the nation of tech talent momentum, showing greater growth in the past two years than the two prior. Combined, Miami and Fort Lauderdale would rank as the largest tech talent market in Florida, ahead of Tampa, which counts 45,360 tech workers.
Developer Jorge Perez is aware that more must be done to keep Miami’s tech drive on track. This month, he announced the creation of the Jorge and Darlene Pérez Scholars Endowment, which will support scholarships for high-achieving students in the FIU Honors College, particularly those intending to live and work in the South Florida community upon graduation. While there no formal requirement binding students to Miami, the goal is to give students who are already thinking of staying extra incentive to do so.
“The FIU Honors College is producing the next generation of leaders in the South Florida community,” Pérez said. “We hope this gift will not only help these exceptional students achieve their goals at the university, but also bring about added opportunities for careers in South Florida after graduation.”