A new report draws a stark picture of economic inequality in the Miami metro area, where 30 full-time resident billionaires — one of the highest concentrations in the world — occupy the top of the pyramid atop deep and widespread poverty, a small and shrinking middle class and a large workforce dependent on poorly paid service jobs.
Miami does enjoy a gleaming new downtown skyline and a thriving economy, but its prosperity is far from equally shared, the report concludes. Titled “Toward a More Inclusive Region,” it’s co-authored by noted urbanist Richard Florida for the Miami Urban Future Initiative think tank at Florida International University.
In fact, by a standard measure of economic inequality, Miami-Dade County has the second-biggest gap in the nation between the haves and the have-nots, with only New York rating worse, the report says. The Miami metro’s score on the Gini coefficient for inequality places it on a par with Panama and Colombia.
“Even more than New York, Miami is really a tale of two cities,” said Florida, who co-authored the report with New York University professor Steven Pedigo, in an interview. “It has attracted the richest people in the world, and more of them are coming. But it also has an economy based on tourism and hospitality and service, which is generating some of the lowest wages in the United States. So it’s by definition one of the most unequal economies in the nation.”
A map based on the coefficient illustrates what many Miamians observe on a daily basis: Some of the most unequal areas are located along the coast, where poor neighborhoods sit cheek-by-jowl with some of the richest ZIP Codes. Increasingly, those poorer residents are being pushed farther inland as gentrification advances westward, Florida said.
At the same time, Miami-Dade’s middle class is relatively small and shrinking steadily, the report found. Just over 43 percent of Miami households qualify as middle class, the 11th-lowest proportion among the 53 U.S. metros with populations of more than one million. And that proportion has shrunk significantly over the decades. Fifty years ago, 65 percent of local households were in the middle class, the report says.
New Census estimates may provide a partial explanation. For years, Miami-Dade has been losing more people to other parts of the United States than move in from elsewhere in the country (its population growth is fueled by immigration and births). Broward County, meanwhile, has gained roughly the same number from other parts of the country, and historical data shows most people moving from Miami-Dade go just north across the county line. Some experts believe the exodus can be explained by middle-class people looking for less expensive housing in Broward.
Florida said the findings in this new analysis of inequality dovetail with the conclusions of a previous report, published by the FIU think tank earlier this year, that found what it describes as “a severe crisis of housing unaffordability” across Miami-Dade and the rest of South Florida.
Miami’s high housing costs and predominantly low wages mean that many people struggle to pay rent or cover mortgages and have little money left over after covering monthly expenses for shelter, that previous report found. This year, the ALICE report by the local United Way found that the proportion of Miami-Dade families who earn less than what it costs to live here has surged to 40 percent.
“We have a service class that’s paid a pittance,” Florida said.
Nearly half of Miami-Dade’s workers labor in service jobs in tourism, retail and food service, taking home an average of just $26,532 per year. The median annual wage for a worker in Miami-Dade is just $31,702, third lowest in the country, the report found.
That contributes to a deep and concentrated poverty with clear racial and ethnic dimensions, the report says. More than 14 percent of Miami-Dade residents live in poverty, the ninth-highest rate among the country’s large metros. Miami also has the highest poverty rate for seniors. And African American residents are two-and-a-half times more likely to live in poverty than white residents, with Hispanics twice as likely, the report found.
Though Miami’s inequality is among the most extreme in the country, the report noted it’s not alone. Other cities like San Francisco and Boston that have become centers of high tech and innovation are also seeing rising inequality and a housing crunch — a problem no one has yet to crack, Florida conceded.
But it’s a clear trend Miami’s business and economic-development leaders and organizations must keep in mind as they develop strategies, Florida said. With the area’s tech and startup scenes just getting underway, he added, there may be time to curb the unequal impact in Miami.
“It’s kind of a cautionary tale for us,” he said. “If you look at the most competitive, affluent, innovative cities, they are also the most unequal and unaffordable. We have the opportunity to attempt to do it in a way that is more inclusive.”
But he said Miami’s business and economic development leaders need to ramp up to generate solutions for the local problem. One of the goals of the report is to outline the severity of the economic divide to spur discussion and specific solutions, Florida said.
“Miami is a place that has focused on building up economic assets, but maybe we have forgotten just how incredibly divided the place is,” Florida said.
Among the FIU initiative’s recommendations: Devising ways to foster construction of more affordable housing and boosting the pay and career prospects for service workers. While the state-mandated minimum wage is $8.46 an hour, that could easily be raised to $10 without causing job losses, the report says.
“That’s important,” Florida said. “It’s not like our tourism is low-end. This is one of the chi-chi-est tourism economies anywhere. We have people paying tens of thousands of dollars for bottle service at clubs. Would it really matter if a steak dinner at Prime 112 cost $2 more to cover better pay for the service workers?”