News Archives InfoFax Affordable Finance Initiatives research mainpage <Back to Infofax Archive Page>

The following is the executive summary of the new Labor Report on the State of Florida by Dr. Bruce Nissen from the Florida International University's Center for Labor Research and Studies (ph:305-348-2616; e-mail: nissen@fiu.edu). The full report is available on-line at www.fiu.edu/~clrs under "publications". Chock full of good info and statistics that members might enjoy.

Labor Report on the State of Florida - Labor Day 2002

Florida Economy Uncertain and Stagnant

On Labor Day 2002, Florida's economy is experiencing some trouble. The unemployment rate was 5.1% (seasonally adjusted) in June of 2002, up from the year before but still below the national average of 5.9%. Total non-agricultural employment for June was virtually unchanged from a year earlier, again doing slightly better than the national average. The events of Sept. 11, 2001 hit Florida's tourism industry especially hard, although there has been some rebound.

Florida incomes

Incomes of Florida residents have been rising, although not quite as rapidly as for the nation as a whole. 2001 Florida per capita income was $28,493, 94.1% of the U.S. average. This represents a 9.2% increase in real (inflation adjusted) income over 1991, 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 $55,351 in 2000 (the latest year for which statistics are available), or 88.9% of the U.S. average. This placed Florida 37th of the 50 states, down from 35th the year before.

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 slightly worse than it does in income terms. In the year 2000 (the latest year for which data are available), the Florida average yearly wage was $30,549, only 86.5% of the national average.

Similarly, the median hourly wage for all workers paid by the hour in the state in 2001 was $9.64/hour, or 94.8% of the U.S. average. This is also lower than the median hourly wage for the states of the South Atlantic Region, which was $10.02/hr. Adjusted for inflation, Florida median hourly rates in 2001 exceeded 1989 levels ( the peak year of the last business cycle) by only 5.4%. In constant 2001 dollars they changed from $9.15/hour to $9.64/hour in that twelve year period.

Low Income Workers, Inequality, and Poverty

Florida has a large concentration of workers earning very low wages. As of 2001, 3.2% of the state's workers earned less than the national minimum wage ($5.15/hour), and 3.7% earned either the minimum wage or less. This is much higher than the national averages (2.2% and 3.1%) and somewhat higher than the regional averages (2.7% and 3.2%).

The number of Florida workers earning less than $8.00 per hour (well below the poverty level for a family of four) was also high. Twenty nine and a half percent (29.5%) of Florida workers were at this level of the "working poor" -- higher than either the national or regional averages.

An April 2002 study of Florida found that inequality grew from the late-1970s to the late-1990s, but had remained relatively unchanged from the late 1980s on. As of the late 1990s, Florida had greater income inequality between the richest fifth and middle fifth of its population than 40 of the 50 states, and greater inequality between the richest fifth and poorest fifth than 32 other states.

Despite these low wages, Florida has very recently been moving itself out of the "high poverty" category. In 1999 and previous years, the state had a higher poverty rate than the U.S. as a whole. But in 1999-2000 (the latest two year dates for which information is available), Florida's average poverty level was 11.5% of the population, identical to the national average. In the year 2000 Florida actually moved below the national average for poverty: 10.6% compared to a national rate of 11.3%. If this drop in the poverty should hold up in subsequent years, it would be a most welcome development for our state.

Workplace Conditions and Government Worker Protections

Income is not the only measure of worker well-being. The way employees are treated in the workplace and government policies which protect workers are also important. 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 low in the number of worker protection statutes.

Health insurance is important to all workers and their families. In 2000 (latest year for which data are available), 17.3% of Florida residents had no coverage; only seven states had a higher non-coverage rate. Florida's private health insurance coverage is also low: ninth worst of all states in the nation.

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 2001, Florida's unionization rate was 6.6% of eligible workers, ranking the state 43rd out of the 50 states. In the private sector, the rate was 3.5%, 48th in the nation. Floridia public sector workers were 26.6% unionized, closer to the national average of 37.4%. 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.

Florida is traditionally considered a "low tax" state, but this is not an accurate reflection of reality. In 2002 Florida's total tax burden on its citizens was 32.2%, making it the 15th highest in the nation. Because Florida has no income tax (which is deductible on one's federal tax forms), its tax structure collects less money than average, yet imposes a higher tax burden than average. This is because state income taxes are deductible on one's federal tax return, but Florida lacks this deduction. Thus Florida is, overall, a "high tax" state - it just doesn't get most of those taxes, which go to the federal government. Furthermore, working people and those in the lower income brackets pay a disproportionate percentage of the taxes that are collected, 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.

Public Policy: What Might the State Do About Substandard Conditions?

Through a variety of calculations, this study shows that the dependence of the Florida economy on tourism makes it overly reliant on industries that pay below average wages. Compared to a "normal" state, we have an excess of jobs in hotel/lodging, retail trade, and amusement and recreation. All of these pay wages substantially below the state average, and they have large numbers of workers earning less than $7 an hour.

To address this problem, this report recommends three new measures beyond what is currently being attempted. First, the state could provide low income workers with an Earned Income Tax Credit (EITC). (An EITC is a tax rebate, or a check if no taxes or less taxes than the size of the rebate are owed, to low income wage earners). The federal government EITC is considered the most effective federal program to lift families and children out of poverty. Even though it has no state income tax, Florida could provide a supplemental EITC check equal to 50% of federal one to Florida resident federal income tax filers.

Second, the state could enact 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.). If the minimum were set at $6.00 per hour, many low wage workers would benefit directly with extremely minimal disemployment effects.

A third legislative measure recommended is 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.

Conclusion

Florida's economy is unstable as of Labor Day 2002. Unemployment is still below the national level, and the state is faring better than some others. But employment growth is very sluggish, and tourism has not fully recovered from the events of September 11, 2001. Real per capita income has been growing slightly, albeit less rapidly than for the nation as a whole.

Florida's workers are faring worse than the economy as a whole. Florida is a low income and (even more so) a low wage state, with a disproportionate number and percentage of low wage jobs. On a variety of non-wage issues, from minimum wage policy, unemployment compensation policy, health insurance coverage, unionization, tax policy, and statutory protections of workers, Florida is also inferior to national norms.

Florida's public policies could address all of these issues, but this report's recommendations address only the low wage issue. Florida could (1) enact an Earned Income Tax Credit for low wage workers, (2) enact a statewide minimum wage covering all workers in the state, and (3) enact a state living wage law to cover state workers and workers for state contractors. All three would have a beneficial impact on the state and its workers. The state's current political climate is hostile to at least two and possibly all three of these suggestions, however. Yet the problem of low wages will persist and probably worsen unless active measures are taken. The state could do a lot better by its working people and especially its least favored laborers, but may lack the political will to do so.

Local Wage Levels

Average wage per job for Florida and its counties, in current dollars, state ranking of counties, and ratio of average wages for Florida and counties versus U.S., 1989, 1995, and 2000




Happy Labor Day to One and All!