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9/17/01: The following is excerpts from FIU's Center for Labor Research & Studies 2001 "Labor Report on the State of Florida" by Dr. Bruce Nissan. For the full report, please visit the Labor Center's web site at http://www.fiu.edu/~clrs/
2001 Labor Report on the State of Florida: Executive Summary
I. Florida Economy Doing Well
On Labor Day 2001, Florida's economy is doing somewhat better than that of the nation as a whole. The unemployment rate was 4.0% (seasonally adjusted) in June of 2001, up from the year before but still below the national average of 4.5%. Total non-agricultural employment for June increased 3.1% from a year earlier , placing Florida #1 in growth rate among the five most populous states.
II. Florida incomes
Incomes of Florida residents have been rising, although not quite as rapidly as for the nation as a whole. 2000 Florida per capita income was $28,145, 94.8% of the U.S. average. This represents a 7.6% increase in real (inflation adjusted) income over 1990, which is less rapid growth than for the nation as a whole. Florida per capita income is still above average for the nation's southeast region, but it is losing ground on this measure also.
Median income for a family of four in Florida was $55,578 in 1999 (the latest year for which statistics are available), or 92.7% of the U.S. average. This placed Florida 35nd out of the 50 states, down from 32nd the year before.
III. Wages in Florida
For working people in Florida, the trend in wages is more important than trends in income. This is because income figures also include non-wage forms of payment such as returns from investments and pensions. Looking at wages, Florida appears comparatively worse than it does in income terms. As of the first quarter of 2001, the Florida average yearly wage was $33,435, only 88% of the national average.
Similarly, the median hourly wage for all workers paid by the hour in the state in 2000 was $9.11/hour, or 91.9% of the U.S. average. This is also lower than the median hourly wage for the states of the South Atlantic Region, which was $9.66/hr. Adjusted for inflation, Florida median hourly rates in 2000 exceeded 1989 levels ( the peak year of the last business cycle) by only 2.4%. In constant 2000 dollars they changed from $8.90/hour to $9.11/hour in that eleven year period.
This stagnant wage growth is unprecedented in times of such steady expansion and wealth creation. The combination of stagnant wages with slowly growing incomes can be explained by a combination of factors: more people now work two jobs, more family members work, more of the state's income takes the form of return on investment rather than wages for work performed.
IV. Low Income Workers, Inequality, and Poverty
Florida has a large concentration of workers earning very low wages. As of 2000, 2.9% of the state's workers earned less than the national minimum wage ($5.15/hour). This compares with a national average of 2.5%; and a regional average of 2.9%.
The number of Florida workers earning less $8.00 per hour (well below the poverty level for a family of four) was also high. Fully 34.2% of Florida workers were at this level of the "working poor", compared to a national average of 29.9% and a regional one of 30.8%. An alternative measure of "working poverty" shows the same pattern: Florida's percentage is above both national and regional averages.
A January 2000 study of Florida found that inequality grew from the late-1980s to the late-1990s, when the state's families in the lowest 20% of the income distribution lost 3% of their real income, the middle 20% gained only 2%, and the state's richest 20% increased their real income by 13%. The richest 5% increased their incomes by a substantial 21% in that period. Since the late 1990s, lower and middle income workers have improved their lot, so the same calculation today would not be quite as stark, but the overall pattern would remain.
As one would expect given the high incidence of low wages, there is a high level of poverty in Florida. In 1998-1999 (the latest dates for which information is available), 12.8% of Florida's population lived in poverty, above the national average of 12.3% and tying the state for the 16th -17th highest in the nation. The 1989 level was 13.1%. A Supplemental Survey taken as part of the 2000 Census (whose data may not exactly correspond to other figures) shows a 2000 poverty rate of 13.5%, again 16th highest in the nation. It thus appears that the long economic expansion in Florida in the 1990s produced essentially no drop in the poverty level.
V. Workplace Conditions and Government Worker Protections
Income is not the only measure of worker well-being. Also important is the way employees are treated in the workplace and government policies which protect workers. On this score, Florida rates poorly. The state is one of only seven in the nation that has no minimum wage for workers not covered by the national minimum wage. Florida's unemployment laws are written so restrictively that it has among the lowest percentage of unemployed qualifying for benefits in the nation. The state ranks in the number of worker protection statutes.
Health insurance is important to all workers and their families. In 1999 (latest year for which data are available), 19.2% of Florida residents had no coverage; only five states had a higher percentage. Florida private health insurance coverage is also low: 35.2% lacked such coverage, again placing the state 6th highest in the nation on this score
Unions are perhaps the primary mechanism for U.S. workers to raise their living and working standards. Therefore, the condition of unions within a state is another indicator of worker well-being. For all workers in 2000, Florida's unionization rate was 6.8% of eligible workers, ranking the state 41st out of the 50 states. In the private sector, the rate was 3.3%, 48th in the nation. State public sector workers were 28.5% unionized, closer to the national average of 37.5%. State government policy is generally hostile to unions - a "right-to-work" provision in Florida's constitution ensures that workers covered by a union contract need not pay their union dues.
The state's 2000 tax burden was 88.4% of the U.S. average, 25th of the 50 states. Total per capita taxes of $4,055 again put the state 25th highest in the nation. But working people pay a disproportionate share of the state's taxes, because the structure is highly regressive (meaning the wealthy pay less as a share of their income than lower income taxpayers). Several studies have found the state's taxes to be among the most regressive in the nation.
Florida's public policies are much less favorable than those of most states with regard to workers. This is part of a longer term history in the state, where "cheap land, low taxes, and low wages" have been used to sell the state to investors.
VIII. Public Policy: What Might the State Do About Substandard Conditions?
Structurally, the Florida economy is overly reliant on industries that pay below average wages. Three sectors have wages below the state's average wage: agriculture (average wage of $18,066, or 37.8% below the state's average ), retail trade (average wage of $17,836, or 38.6% below the state's average), and services (average wage of $27,980, or 3.7% below the state's average). If "services" is broken down into components, Florida has an unusually high number of low wage service jobs such as personal services, private household services, and entertainment and recreation services, due to its large tourism industry and its large retiree population. In 1999 Florida had 600,124 more workers (8.8% of the workforce) in these industries than it would were it a "normal" state for employment patterns.
These industries pay less than $7.00 per hour to a large percentage (between 33% and 40%) of their workers. (This is less than $14,560 per year even if one worked full time year round.) And between 14% and 23% of these workers earned less than $6.00 per hour, or less than $12,480 for full time work year round.
Locked in to certain low wage industries, the state could address the low wage problem by enacting a state minimum wage covering all workers , including those escaping coverage under the national minimum wage (agricultural workers, restaurant workers, workers in very small establishments, etc.). Were the state minimum wage set at $6.00 per hour, 14% to 23% of workers in the above mentioned industries would win pay increases to the new minimum wage, and a large majority of the 33-40% in those same industries making between $6.00 and $7.00 per hour would probably also win pay increases. And yet $6.00 per hour is a very low figure - so low that the danger of pricing significant numbers of unskilled workers "out of the market" is very minimal.
A similar but less far reaching legislative measure would be a state "living wage" law requiring the state to set a "public example" by legislating that its own employees and the employees of its service contractors be paid above the poverty level for a family of four, and that they be provided health insurance or its monetary equivalent.