Wednesday 17 September 2014

South Florida incomes keep declining as recovery grinds on, new data shows

Did you get a raise last year? No? How about the year before that? Or the year before that?

Didn't think so.

Don't feel lonely. Few of us are seeing our incomes increase, even after five years of recovery from the Great Recession, according to economic data released Thursday by the U.S. Census Bureau.

The median household income in South Florida fell 5.8 percent in five years, the data show. Pay here ranked almost last among the 25 largest metro areas at $46,946 in 2013. Only Tampa was lower: $45,880.

Granted, income has fallen in all 25 metro areas except Pittsburgh, but only six have fallen faster than Broward, Palm Beach and Miami-Dade counties.

The news contrasts sharply with almost daily reports about the strength of the local economy. Unemployment has fallen from 10.7 percent in 2009 to 6.2 percent in July. The value of goods and services produced has grown for four straight years.

And yet, the amount we spend on food, clothing and other necessities keeps going up, eating away at that dwindling paycheck like Giant African Land Snails on a stucco house.

Households in all three South Florida counties have lost ground. Miami-Dade's median household income dropped by $3,073, Broward's by $2,661. Palm Beach County, by comparison, was a harbor in the storm, falling by $1,931.

The five-year estimates, adjusted for inflation, were released as part of the 2013 American Community Survey.

In an economy still wobbling after being body-slammed by the real estate crisis six years ago, many South Florida workers aren't expecting a raise.

Patrice Schroeder hasn't seen an increase in her paycheck for more than three years as the public information officer for the nonprofit 211 HelpLine for Palm Beach/Treasure Coast, a social service hotline. Things are tight: Her nonprofit recently had to lay off two people. "We're not talking about a raise; we're talking about keeping a job," she said.

Plus, it's hard to complain, she said, when their clients are so needy. Some 2,610 Palm Beach County families, for example, called the 211 emergency hotline for emergency housing in the fiscal year that ended June 30, a 69 percent increase from the 1,546 families who asked for housing help the previous fiscal year, Schroeder said.

South Florida families living below the federal poverty level inched up to 14.9 percent in 2013 after two straight years at 13.9 percent, according to the new data. The picture is brightest in Palm Beach County, with 10.9 percent of families living in poverty in 2013. In Broward, 11.8 percent were in poverty last year compared with 9 percent in 2009.

In Hollywood, the nonprofit Jubilee Center of South Florida is still seeing an increasing number of families asking for emergency food. Paychecks don't stretch far enough, said executive director Steven Ling. "The cost of living is significantly higher," he said.

In fact, groceries cost 4.3 percent more in August in Broward and Miami-Dade counties compared with the previous August, according to the local Consumer Price Index that the U.S. Bureau of Labor Statistics released Wednesday. Overall, the cost of living is up 2.4 percent in the two counties over the past year, outpacing the 1.7 percent increase in the South and the U.S. overall.

Schroeder said she was surprised at South Florida's cost of living when she moved here from California. She expected to benefit from lower costs but instead found prices were about as high.

Pay is declining in a recovering economy because there are still too many people looking for jobs, said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness. Many workers who were laid off took substantial pay cuts when they found new work, sliding "a rung or two down the labor ladder," he said.

The recovery hasn't benefited all workers, added J. Antonio Villamil, economist and principal of The Washington Economics Group in South Florida. Workers whose skills are in demand are getting pay raises, including tech workers, engineers, banking professionals and even carpenters, he said. That's not true for workers with fewer skills or in stagnant fields, he said.

The recovery's slow pace has prevented wages from rising across the board, said Greg McBride, chief financial analyst for North Palm Beach-based Bankrate.com. "Demand is weak, so wage growth is weak," he said.

South Florida income also has been hurt by employers opting to hire more workers part-time instead of offering full-time work with benefits, said economist Jorge Salazar-Carrillo, who directs the Center of Economic Research at Florida International University. "We are having an epidemic of part-time workers," Salazar-Carrillo said. "They are usually paid at a lower rate."

Tamer Mahfouz, 21, is one of those working part-time. He works 30 hours a week teaching martial arts while enrolled at Florida Atlantic University. He lives with his mom in Davie because he can't afford to rent an apartment or live on the university's Boca Raton campus. "That takes too much out of my paycheck," Mahfouz said. He's now trying to save gas money by taking classes at FAU's Davie campus instead of driving 30 miles one way to the Boca campus.

If there's good news to be shared by the Census Bureau, it probably won't come for another year, when 2014 median household income data are released. Next year's report could reflect the decline of the state's unemployment rate.

The number of jobseekers using CareerSource Palm Beach County, the state-funded employment referral center, dropped from roughly 15,000 a month in 2010, 2011 and 2012 to around 11,000 a month now, spokeswoman Pat Davis said.

While the earlier jobseekers were willing to take multiple jobs, seasonal jobs and jobs with lower pay, people using the center's services today are looking to move up, Davis said.

"People who took a job just to get by are now looking for something in their field or a better job," she said. "Now there are more options, and they are starting to move around."

dgehrke@sunsentinel.com and rhurtibise@sunsentinel.com

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