LABOR REPORT ON THE STATE OF FLORIDA 

September 1, 2003 (Labor Day) 

by Bruce Nissen

Center for Labor Research and Studies

Florida International University

Miami, Florida 33199

305-348-2616            nissenb@fiu.edu

(Special thanks for Silvana Ianinska for assistance in data collection)

This report is available on the web at http://www.fiu.edu/~clrs. Click on “publications”, then click on the 2003 Labor Report on the State of Florida. 

Executive Summary

I.  Florida Economy Appears to be Doing Well

On Labor Day 2003, Florida’s economy appears to be doing better than the U.S. economy as a whole. The June 2003 unemployment rate was 5.3% (seasonally adjusted), .2% lower than a year before and well below the seasonally adjusted national average of 6.4%. Total non-agricultural employment for June was up 1.1% from a year earlier, again doing better than the national average, which dropped .3%. Florida also picked up jobs at a faster rate than was true for the nation as a whole. Thus one might expect Florida’s workers to be doing comparatively well, but wage and poverty figures do not validate this expectation.

II.  Florida incomes

2002 Florida per capita income was $29,559, 95.9% of the U.S. average, but 6.8% above the average for the southeast region of the country. The state’s advantage over the region has dropped from over 20% in 1970 (and 15% and 14% in 1980 and 1990) to below 7% today. The rate at which its per capita income grew from 2001 to 2002 was 1.9%, 34^th best of the 50 states in the union.

Median income for a family of four in Florida was $56,824 in 2001 (the latest year for which statistics are available), or 89.8% of the U.S. average.  This placed Florida 35^th of the 50 states. On this score, it ranks 4^th of the 12 states in the Southeast Region.

III.  Wages in Florida

For working people in Florida, trends in wages are 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 fares more poorly than it does in income terms.  In the year 2001 (the latest year for which data are available), the Florida average yearly wage was $31,551, or 87.1% of the national average. 

The median hourly wage for all workers paid by the hour in the state in 2002 was $9.90/hour, or 94.6% of the U.S. average of $10.47/hour.  This is also lower than the median hourly wage for the states of the South Atlantic Region, which was $10.18/hr.  Adjusted for inflation, Florida median hourly rates in 2002 exceeded 1989 levels (the peak year of the last business cycle) by only 6.1%.  In constant 2002 dollars they changed from $9.33/hour to $9.90/hour in that thirteen-year period.

IV.  Low Income Workers, Inequality, and Poverty

Florida has a large concentration of workers earning very low wages.  As of 2002, 3.3% of the state’s workers earned less than the national minimum wage ($5.15/hour, or $10,700/year), and 3.8% earned either the minimum wage or less.  This is much higher than the national averages (2.2% and 3.0%) and somewhat higher than the regional averages (2.8% and 3.3%).

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.  Almost twenty seven percent (26.9%) of Florida workers were at this level of the “working poor” -- higher than either the national or regional averages.  And almost 40% earned less than $9.00 per hour, or under $18,720 per year. In all these respects, the state was below both national and regional standards.

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.

In part due to these low wages, Florida has slightly above average poverty rates compared to the U.S. average. In 1999-2001 (the latest three-year averages - used for greater statistical accuracy - for which information is available), Florida’s average poverty rate was 12.0% of the population, higher than the 11.6% national average, but lower than in 10 of the 12 states in the Southeast Region.

V.  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 that protect workers are also important.  On this score, Florida rates poorly.  Together with six other states, Florida has no minimum wage law of any type. The 2003 legislature passed a law prohibiting municipalities or counties from creating minimum wage laws.  Florida’s unemployment compensation laws are written so restrictively that it has among the lowest percentage of unemployed qualifying for benefits in the nation. Its unemployment benefits are lower than in 33 of the 50 states. Florida also puts more restrictions on disability benefits than most states. And overall, the state ranks low in the number of worker protection statutes. 

Health insurance is important to all workers and their families.  In 2001 (latest year for which data are available), 17.5% of Florida residents had no coverage; only six states had a worse record. Within the Southeast Region, only one state fared worse.  Florida’s private health insurance coverage is comparably low: 7^th worst in the nation, with only one southeastern state doing worse.

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 2002, Florida’s unionization rate was 5.8% of eligible workers, ranking the state 43^rd out of the 50 states.  In the private sector, the rate was 2.8%, 49^th in the nation.  Florida public sector workers were 24.6% unionized, 28^th in the nation. 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 2003 Florida’s total tax burden on its citizens was 29.0%, making it the 22^nd 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. 

VI.  How Florida’s Counties are Faring

This report gives data on all 67 of Florida’s counties, on a variety of measures:  employment, unemployment, wages, and poverty.  The reader can compare counties with the state as a whole, the nation, and each other.

VII.  How Florida’s Metropolitan Areas are Faring

This report also gives similar data on Florida’s Metropolitan Statistical Areas (MSAs), allowing the reader to compare all 20 MSAs on a number of indices of worker well-being.

VIII.  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 accommodations and food service, leisure and hospitality, and retail trade. All of these pay wages substantially below the state average. Almost half of their employees earn less than $8.00 per hour.

To address this problem, this report recommends eleven measures beyond what is currently being attempted. These measures include a state minimum wage, changes in unemployment and disability compensation policies, provision of health insurance, more union-friendly policies, tax system overhaul, and a statewide living wage law. Few of these suggestions are likely to have a positive reception in the state’s capital, however, given the current political climate.

IX.  Conclusion

            Some of the measures used to evaluate labor market performance show Florida’s economy working very well.  Unemployment in the state is lower than it is nationwide.  Florida’s economy has been adding jobs at a more rapid rate than has the nation.  Real per capita income has been growing slowly, but slightly more rapidly than in the nation as a whole. 

            Yet Florida’s workers are not faring as well as the state’s economy. Florida is 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, disability policy, health insurance coverage, unionization, tax policy, and statutory protections of workers, Florida is also inferior to national norms.

            This report recommends a number of public policy measures that would address this situation. The state’s current political climate is hostile toward most 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.

Labor Report on the State of Florida

Labor Day 2003

I.  Florida Economy Appears to be Doing Well

On Labor Day 2003, Florida’s economy overall is faring somewhat better than that of the nation as a whole. The June 2003 unemployment rate (seasonally adjusted) was 5.3%, down .2% from the 5.5% rate a year earlier. This rate was below the national seasonally adjusted rate of 6.4%. Largest job gains were in local government (+22,300 jobs), followed by health and social services (+14,500 jobs), professional and technical services (+14,400 jobs), and construction (+14,000 jobs). Offsetting losses came primarily from manufacturing (-18,800 jobs), information (-8,100 jobs), retail trade (-7,500jobs), and transportation, warehousing, and utilities (-5,200 jobs). (July 18, 2003 FL Employment and Unemployment press release, FL Agency for Workforce Innovation).

            Total non-agricultural employment in the state increased 1.1% from a year earlier, at 7,230,700. By contrast, the nation’s non-agricultural employment declined .3% over the same time period. (July 18, 2003 FL Employment and Unemployment press releases, FL Agency for Workforce Innovation).

            The hospitality and tourism sectors, important in Florida, still have not recovered to pre- “9-11-01” levels, although they are slowly improving, according to the regional Federal Reserve Board (Federal Reserve Board - Sixth District - Atlanta, “The Beige Book”, July 31, 2002). 

            Florida’s unemployment rate has been lower than the national rate for sixteen straight months. The state has also experienced the largest growth of jobs of any state in the nation from mid-2002 to mid-2003. Thus one would expect that workers in the state would be faring reasonably well. Relatively low unemployment rates and rapid job growth traditionally mean better wages and conditions for workers. Are workers in fact doing well?  The answer depends on facts concerning incomes, wages, poverty, and the like. 

II.  Incomes in Florida

Per capita income levels in Florida have been growing.  In 2002 (the latest year for which statistics are available), per capita income in Florida was $29,559, almost a 45% increase over the 1992 level ($20,441).  (These figures are not adjusted for inflation; if we do adjust for inflation and compute the real increase in purchasing power, the increase for the entire decade 1992-2002 is only 13%, just above 1% per year).  Florida’s 2002 per capita income was 95.9% of the 2002 U.S. average ($30,832), a slight increase from 2001 when it was 95.5% of the U.S. average (website: http://www.bea.doc.gov/bea/regional/data.htm) . Even though state per capita income was below the U.S. average, Florida ranked 23^rd on this measure within the 50 states, down from 21^st in 2001. The rate at which its per capita income grew from 2001 to 2002 was 1.9%, 34^th best of the 50 states in the union.

            Florida’s per capita income was gaining on the U.S. average each decade until the 1990s.  In fact, it exceeded the U.S. average in 1990, but during that decade it fell backward and has been slowly inching upward in 2001 and 2002, although not back up to levels attained in 1970, 1980, or 1990.  Figures are shown in Table 1.

Table 1

Florida per capita personal income, compared to the U.S. as a whole

Source: website: http://www.bea.doc.gov/bea/regional/data.htm 

            While Florida did less well on per capita income in the 1990s than the nation as a whole, it finally did raise real incomes in the final years of that decade.  By the end of the decade, Florida’s per capita income was 7.6% higher in 2000 than in 1990.  This is an extremely poor showing, given the strong and uninterrupted economic growth for that decade, but it is better performance than was evident in the first half of the decade, when incomes actually dropped. 

            While it is slightly below the national average, the Florida per capita personal income is higher than the average for the region of the country to which it belongs (the Southeast region, comprising twelve states: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia).   This region has become the poorest in the nation, and yet Florida’s per capita income advantage over the region of more than 20% in 1970 decreased to somewhere between 6% and 7% in the 2000-2002 period. Table 2 shows the progression of Florida’s per capita income, compared to its regional neighbors:

Table 2

Florida per capita income, compared to the Southeast Region of the United States, various years

Source: Website http://www.bea.doc.gov/bea/regional/data.htm   

            Median income (meaning income where half earn more and half earn less) for a Florida family of four was $56,824 in 2001, the latest year for which statistics are available.    (Website:  http://www.census.gov/hhes/income/4person.html ) This is 89.8% of the national average ($63,278), which places the state 35^th out of the nation’s 50 states.

            In the eleven years from 1990-2001, Florida’s median 4-person family income slipped some in the mid- 1990s (1991-1996), regained some ground in 1997-1999, and once again fell in the 2000-2001 period. Whether the backsliding in 2000-2001 was a temporary aberration or part of a longer trend remains to be seen as more recent figures come out. Table 3 shows the relevant figures for the eleven years of 1990 through 2001.

Table 3

Florida median income for a family of four, compared to the U.S. as a whole

Source: Website: http://www.census.gov/hhes/income/4person.html  

            Of the 11 other states in the Southeast Atlantic region eight had lower family of four median incomes (Alabama, Arkansas, Kentucky, Louisiana, Mississippi, North Carolina, Tennessee, and West Virginia).  Three had a higher one: Georgia, South Carolina, and Virginia.  Thus, Florida is slightly above average (4^th out of 12) in the region and below average for the country as a whole.

III.  Wages in Florida

For working people in Florida, the trends in wages and salaries are more important than trends in income.  Simple income figures include retirement, investment, and other non-wage forms of payment, thereby obscuring the actual conditions of those working for a living.  This is especially true in Florida, because of the disproportionate share of the state’s population composed of wealthy retirees living off pensions and investment income (dividends, interest, and rents).  Therefore income figures tend to overstate well being compared to the living standards of working individuals and families.

            The degree to which per capita income figures distort the wage picture should be apparent from the state’s rankings in the amount of per capita income it receives in dividends, interest, rent, and retirement income.  In 2000 the state was second in the nation in per capita dividend income ($1,949 per capita vs. a national average of $1,344).  It was third in the nation in per capita income from combined dividends, interest and rent ($7,005 vs. a national average of $5,389).  And it was eighth highest in the nation in per capita retirement (and other) income ($3,840 vs. a national average of $3,343).  In 2001, over one quarter (25.9%) of all income in the state took the form of dividends, interest, or rent ( http://www.bea.doc.gov/bea/regional/data.htm ).

            Turning to wages and salaries, Florida tends to look comparatively worse than it does in income terms.  In the year 2001, the Florida annual average pay was $ 31,551  (Website: ftp://ftp.bls.gov/pub/special.requests/atlanta/aapse.txt ).  This is 87.1% of the national average, well below the state’s 95.9% record in per capita income compared to the national average.

            In median hourly wage for workers paid by the hour, Florida climbs back into the mid-90s percentile compared to the U.S. as a whole.  In 2002 (the latest year for which data are available), it was $9.90/hour, 94.6% of the national figure of $10.47/hour.  Florida was also below the average for the South Atlantic region, which was $10.18/hour. (The South Atlantic region, which is not identical to the Southeast Region used by the Census Bureau in earlier figures, is used by the Bureau of Labor Statistics for comparisons. It is composed of: Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia).  Detailed comparison with individual states in this region is impossible because most regional states are to small to produce Current Population Survey samples large enough for statistically reliable results. 

            Compared to the peak year of the last business cycle, 1989, median hourly wages in Florida for workers paid by the hour took until 1999 to catch up to and surpass their previous levels in real terms (after numbers are adjusted for inflation).  Converting all wage rates to year 2002 dollars, Table 4 shows the wage changes from 1989-2002 for Florida, the South Atlantic Region, and the United States: 

Table 4

Hourly mean wage rates in constant 2002 dollars for workers paid by the hour, Florida, South Atlantic Region, and the United States, 1989-2002

Source: Calculations from U.S. Department of Labor, Bureau of Labor Statistics, unpublished data from the Current Population Survey, Table A-21, relevant years.  Consumer Price Index figures were used to adjust wages to 2001 dollars.

As is apparent from Table 4, Florida shared wage trends with the South Atlantic Region and the United States as a whole in the 1990s: real wages fell through 1997 or 1998, only catching up to previous wage levels in 1999.  Since 2000, real wages have grown.

IV.  Low-income Workers and Inequality

One of the major problems for Florida workers is the state’s extreme inequality of wage levels.  A disproportionate share of the state’s workers earn very low wages.  As of 2002 3.3% of the state’s workers earned less than the national minimum wage ($5.15/hour), and 3.8% earned at or below the minimum wage.  This is much worse than either the national or regional percentages on both scores, as shown in Table 5.    

Table 5

Percentage of workers earning below the minimum wage , or at or below the minimum wage, Florida compared to the South Atlantic Region and the U.S. as a whole, 2002                           

Source: calculated from unpublished data in the Bureau of Labor Statistics CPS Table A-21

Workers can earn less than the national minimum wage because certain categories of workers (e.g., agricultural workers, waiters and waitresses, workers in extremely small businesses, etc.) are exempted from the minimum wage.  Also, of course, some employers simply break the law. Earning less than the minimum wage meant that someone working full time for a complete year would earn less than $10,700. 

            If we add to these sub-minimum wage workers the other low wage workers earning less than $8.00 per hour, fully 26.9% of Florida workers in 2002 were at this level of the “working poor.”  And almost 40% earned less than $9.00 per hour. On both figures, the state is worse than the national and regional averages, as shown in Table 6

Table 6

Percentage of workers earning less than $8.00 per hour and less than $9.00 per hour in Florida

compared to the South Atlantic Region and the U.S. as a whole, 2001

Source: calculated from unpublished data in the Bureau of Labor Statistics CPS Table A-21

The approximately 27% of Florida workers who are earning less than $8.00 per hour are earning less than $16,620 a year, even if they work full time year round.  The official U.S. poverty level for a family of four in 2002 was $18,100 per year, or $8.70/hour (website: http://aspe.hhs.gov/poverty/02poverty.htm ).  Thus, those earning less than $16,620 per year are at least $1,500 below the poverty level.  (The official U.S. government poverty guidelines are well known to be only about 55% of the income required to be self-sufficient – i.e. to be able to support oneself or one’s family at an absolute minimum level without governmental assistance or charity.  Thus, a family of four with two wage earners earning at approximately federal poverty level wages will be just barely above the self-sufficiency level, a more realistic “poverty level”.) 

An April 2002 study by the Center on Budget and Policy Priorities found that inequality in the state had increased from the late 1970s to the late 1990s, but had remained essentially unchanged from the late 1980s to the late 1990s. The state’s poorest 20% of families saw their incomes increase in the late 1970s to late 1990s period at less than half the rate of increase for the top 20%.  As of the late 1990s, Florida had greater income inequality between the richest fifth and middle fifth than 40 of the 50 states, and greater inequality between the richest fifth and poorest fifth than 32 other states (Website: http://www.cbpp.org/4-23-02sfp-states.htm).

            Low wages and high inequality usually translate into high levels of poverty, and Florida most likely has above average levels of poverty. The U.S. Census Bureau averages data over a two or three year period, to make for more reliable statistics.  In the three year period 1999-2001 (the last three years for which information is available), Florida’s average poverty level was 12.0% of the population, compared to the U.S. rate of 11.6%.  (It is possible that this difference is simply due to sampling error, but the difference is probably real.)  Florida has the 20^th highest poverty rate of the 50 states.

Although it is worse than the U.S. as a whole, on this measure Florida fares better than ten of the other eleven states in the Southeast region.  Figures are given in Table 7, from lowest poverty to highest poverty rates.

Table 7

Percent of population in poverty, 1999-2001 for Florida, Southeast Region States, and the US