Greater Miami catches up with NYC in one more way: high income inequality

Miami Herald

11 hours ago

As New Yorkers have flocked to Miami in recent years, the Magic City has started to look more and more like the Big Apple: Michelin restaurants abound, financial firms fill downtown and Brickell.
But now, greater Miami is closing in on one of New York City's less-flattering superlatives: It's tied with NYC for having the worst income inequality of the country's 10 most-populous metro areas.
Think of the local income distribution as a bottom-heavy hourglass. Some people make lots, while lots of people make little.
South Florida has long been a place where the rich park their money, but wealth poured in during and after the pandemic, increasing the number of high earners who live here. That inflow of money, piled onto already high nationwide inflation, caused a surge in local prices, especially for housing.
At the same time, many workers in the region's economy — which is built disproportionately on industries that feature low-wage jobs, like service, hospitality and construction — haven't seen their incomes keep pace.
Income inequality has crept up so much over the last decade and a half, since the Census Bureau started tracking greater Miami's score, that half of Miamians now struggle to live here.
If young, skilled workers can no longer afford to live here — or feel like they can't save, buy homes and generally get ahead — they'll leave. They already have been, said Howard Frank, a professor of public policy at Florida International University and an expert on South Florida's workforce. And losing that demographic, a pillar of the local workforce, could jeopardize Miami's efforts to reimagine itself as a world-class hub of industry — be it in financial services as 'Wall Street South,' in tech via crypto, or both.
It's in the numbers
The Census Bureau quantifies income inequality using something called the Gini index, a measurement of inequality where a 0 represents total equality — everyone earns the same amount — and 1 is complete inequality — one person earns everything.
Greater Miami's Gini score is 0.51, higher than the nation's 0.48 average, meaning the region's income distribution skews toward the unequal. Within Miami-Dade County, Miami Beach had the highest score, 0.62, making it by far the most unequal, while the county's Everglades communities had the lowest, at 0.33. Miami, the region's largest city, scored a 0.54.
The median household in greater Miami earns roughly $76,000 a year, according to the Census Bureau. To be considered 'middle class,' then, a household would have to earn somewhere between two-thirds and double that amount — $50,000 to $152,000.
Pew Research estimates that 37% of adults in the Miami metro area earn less than that middle-class income floor. Compared to the U.S. more generally, where 28% of adult earners are in the lowest earning bracket, Miami has a relatively large low-income population.
Meanwhile, across Florida, the highest-earning households account for a major portion of the state's earned income. Internal Revenue Service tax return data shows that the top 1% of Florida earners — the 105,000 tax filers that pulled at least $371,000 in 2022, the most recent year available — accounted for a third of the entire state's gross earnings.
That's about how much the bottom 80% of Florida tax filers, who are roughly 8 million in number, collectively made.
Except for Wyoming — home to fewer than 600,000 people — no American state saw its 1% earn a larger share of its population's income.
Brain drain is a problem
Miami's warm weather, relatively cheap real estate and favorable tax policies drew the wealthy in droves during and after the COVID-19 pandemic. They, in turn, drove up local prices, particularly for housing, faster than Miamians' wages rose.
That's partially because many locals work in traditionally low-paying industries.
'Miami doesn't have a strong industrial base. It's a largely service-sector economy,' said Noah Williams, an economics professor at University of Miami's Herbert Business School. 'It's polarized between lower-wage jobs and some higher-income [jobs], particularly financial services.'
And for some young workers, especially those with skills, looking to break into higher-paying industries, the cost can be unworkable. Or they find they get more bang for their buck elsewhere, said Mark Wilson, president of the Florida Chamber of Commerce.
More than a half-million people left Florida between 2022 and 2023, Census Bureau data shows. The most powerful magnets for migrating Floridians? Georgia, Texas and North Carolina, in that order — all states with relatively lower costs of living than the Sunshine State.
According to the Metropolitan Center, Miami-Dade County alone lost more than 130,000 residents to migration between 2020 and 2023, and its population of 20-year-olds has dropped by nearly 35,000 since 2019. The Florida Chamber of Commerce found that, in 2023, the average age of a Florida emigrant was 32. One of the major motivating factors: Florida's high cost of living.
'It's hard to morph into a higher-wage economy if you're losing a lot of your best and brightest,' said Frank, the FIU professor.
It's a risky dynamic, notes Wilson of the Florida Chamber of Commerce.
'If we don't make living in Florida more affordable,' he said, 'the clear and present danger is that this workforce will leave Florida.'
A race to solutions
What can be done? Wilson sees three broad, interconnected solutions.
First, connecting people with job training so they can up-skill into higher-paying careers.
The second is providing targeted services, like access to affordable childcare, food and transportation — all needs that make taking a gamble on a new career possible.
Lastly, said Wilson, costs need to be lowered. Home and auto insurance prices need to be brought down, childcare needs to be subsidized and affordable housing expanded.
'All of that stuff together is like a race,' Wilson remarked.
But, he wondered, 'can we do it fast enough for it to matter?'
This story was produced with financial support from supporters including The Green Family Foundation Trust and Ken O'Keefe, in partnership with Journalism Funding Partners. The Miami Herald maintains full editorial control of this work.