In Miami, Jobs Are Plentiful—and You Might Need Two to Afford It
The Federal Reserve wants strong employment and low inflation. The Florida city shows just how hard it is to attain both at once.
By Harriet Torry and Deborah Acosta, The Wall Street Journal
MIAMI—The clearest view of America’s economic conundrum is from the sunny beaches of Miami.
The city has been growing quickly and jobs are plentiful. But prices, especially the cost of housing, have risen so fast that workers can’t keep up.
The 2.7% unemployment rate in the Miami metro area is among the lowest in the country. But inflation was higher than in any other major metro area in April, and housing costs have doubled in just six years. Wages have been rising—but not enough to keep up with prices.
Barbara Aguilar, who lives in Hialeah, a blue-collar suburb in Miami-Dade County, had an easy time finding work. Two years ago, she took a teaching job in the coastal area of Aventura. She also found a second job at an after-school program. She now makes $65,000 a year, well above the roughly $45,000 she made closer to home. The problem: To get to work and back, she ends up driving more than two hours every day.
“Would it be easier for me to live in Aventura and be closer to my job?” Aguilar said. “Yes, but it would be way more expensive than to drive the 45 minutes.”
Barbara Aguilar drives more than two hours every day for work. PHOTO: DEBORAH ACOSTA/THE WALL STREET JOURNAL
Hedge funds, finance firms and other white-collar companies have powered a Miami gold rush. Many firms set up shop here during the pandemic, forgoing their old haunts on Wall Street and fueling jobs at restaurants, law firms and landscapers across South Florida.
To civic leaders and corporate executives, it is an article of faith that new businesses and low unemployment are something to be celebrated. But when the millionaires arrive, prices go up—and a lot of people can’t make it work.
The median income of people moving to Miami-Dade County in 2021, during the depths of the pandemic, was about $229,300, according to an analysis of the most recent IRS data by Gay Cororaton, chief economist for the Miami Association of Realtors.
Those making less, on the other hand, are pulling up stakes, moving to far-flung suburbs or even out of state. The median income of people leaving was about $66,400.
For most of the workers who remain, wage growth is still pretty slow.
A study by Miami Homes For All, a nonprofit agency that advocates for housing affordability, found that most of the fastest-growing occupations in Miami-Dade County are low-paying jobs, including medical assistants and home health aides, cooks and waitstaff, housekeepers, and warehouse and delivery staff.
Two-thirds of the roughly 37,000 jobs being created between 2022 and 2030 have an hourly wage of $19 or less.
The median home value in the Miami region is around $560,000. PHOTO: JOE RAEDLE/GETTY IMAGES
Local wages have risen 24% since January 2018, to an average of $29.69 an hour. The national average, meanwhile, has jumped nearly 30% to almost $35 an hour for private-sector workers.
Meanwhile, the median home value in the region is around $560,000—up from $280,000 in January 2018, according to real-estate brokerage Redfin. Of the largest U.S. metros, Miami also has the highest share of renters who spend more than 30% of their income on housing, according to a recent study by the Harvard Joint Center for Housing Studies.
Declining housing affordability is hindering the ability of Florida businesses to attract talent, according to the Federal Reserve’s latest beige book, a compilation of economic anecdotes from around the country. Some employers are considering building workforce housing.
Scott Lamoreaux, a real-estate agent, lives in Brickell, the city’s financial district, in a 1,400-square-foot apartment on the 44th floor of a brand-new building. When he moved there from Los Angeles in 2020, his rent was around $5,000 a month. Now, it has ballooned to $7,500.
An apartment on the 44th floor of a new building in Brickell costs Scott Lamoreaux $7,500 a month. PHOTO: SCOTT LAMOREAUX
Still, Lamoreaux can’t bring himself to move, even though his rent now amounts to about 40% of his income. He enjoys the bustle of his neighborhood, the sweeping views of the city, and being just two blocks from the office and near his friends.
“It’s worth its weight in gold,” Lamoreaux said.
Sean Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting, described the Miami region as the poster child for the challenges the Fed faces. Typically, higher rates cool demand and lead to higher unemployment and weaker inflation.
“The usual trade-off between unemployment and inflation is just not happening in this tightening cycle,” Snaith said. The experience of cities such as Miami would be a reason for the Fed to hold off on cutting rates this year, Snaith said.
The Miami area’s annual rate of inflation was 4.5% in April—half the 9% recorded a year earlier, but still too high for the Fed’s taste.
Pushed away from the beach
Karolina Ortiz, who works in human resources, moved from Dubai in the fall. She was so busy caring for her newborn and getting her other children settled in school that she neglected to switch her LinkedIn location to “Miami.” As soon as she did, in March, the inquiries began rolling in.
Initially, she hoped to work at the same company she worked for in Dubai, but the position that was available in South Florida paid much less.
“I was shocked,” she said. “The salaries are very low for the cost of living.”
Ortiz has set her job search aside for now. Finding a home has been practically a full-time endeavor. The neighborhoods she and her husband originally looked at required more than they wanted to spend. So they instead found a home in the suburbs, farther from their relatives.
“I would prefer to stay near family, but the high costs of real estate on Miami Beach and high insurance premiums due to being near the water pushed us further inland,” she said.
An influx of wealthy newcomers has created job opportunities but also added to inflationary pressures for local residents. PHOTO: EVA MARIE UZCATEGUI/BLOOMBERG NEWS
‘I don’t care if I have to work a third job’
There are signs the blistering pace of growth in Miami is cooling.
Miami-area employers have cut jobs in information technology, and financial jobs are flat over the past year, part of a broader slowdown in white-collar hiring. A planned skyscraper downtown can’t sign up enough tenants.
Aguilar, the teacher, considers herself lucky. She owns her home with her mother, and her second job allows Aguilar to hire a caretaker for her three days a week.
That health aide, Aguilar said, is a recent immigrant from Cuba who until recently shared a one-bedroom apartment with her husband, two children and another family of four.
The coastal schools where Aguilar teaches are full of well-heeled émigrés from Russia, Ukraine and South America. She would love to move there, too—someday.
“I don’t care if I have to work a third job,” Aguilar said. “Those areas—God, they’re beautiful.”
Write to Harriet Torry at harriet.torry@wsj.com and Deborah Acosta at deborah.acosta@wsj.com
Read through our pipeline analysis “Accelerating Affordable Housing: The Funds Miami-Dade Needs Now”.