Barely Getting By

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The headlines for Florida’s economy have been sunny and bright: Hundreds of people move here every day, drawn by a business-friendly environment and a vibrant lifestyle. The unemployment rate is at historic lows, below 3%. Every hour Florida gains an additional $4.48 million in net income as wealthy people from the Northeast, Midwest and even California arrive, the Internal Revenue Service reports.

For the most part, Florida is one big boomtown.

But the flip side of the state’s golden era of growth has become millions of Florida households struggling to get by even though they have full-time jobs that once would have secured them a comfortable, middle-class life here, shows research from the United Way. Nearly one-third of Florida residents in their prime working years — 30% of whom have college degrees, according to the United Way’s data — are living paycheck to paycheck, under pressure from soaring costs of housing, childcare and insurance, along with some of the highest inflation rates in the country.

They are Floridians like Katrina Whittaker, a 59-year-old teacher in Fort Lauderdale whose monthly mortgage payment has gone up by $1,200. She fills her gas tank once a week for her commute, but she gets paid every two weeks and sometimes takes out a payday loan to gas up. “The mortgage went up, insurance went up, everything went up but my salary,” she says. “That means you live off of high-interest credit cards.”

ALICE in Florida

The United Way of Florida describes households who are in a tenuous financial balance, such as Whittaker’s, as ALICE — Asset Limited, Income Constrained, Employed. Florida has one of the highest percentages of households living below the ALICE threshold, ranking 44th among states for financial security. Florida has become such an expensive place to live that a family of four can earn 2.5 times the federal poverty level — about $66,000 a year — and still be barely getting by, the United Way’s research shows.

“These are the people who keep the economic engine of Florida humming,” says United Way of Florida CEO Melissa Nelson. “ALICE bags your groceries. ALICE sits next to you on the pew at church. We’re talking about people who are working as hard as they can, as fast as they can and they’re always one paycheck away from disaster.”

The vulnerability of Florida’s modest income families has ripple effects for Florida employers, who have been grappling with labor shortages and worker turnover since the pandemic. Some public employers — such as law enforcement agencies and school districts — are moving toward building housing for their employees while private companies are directing resources into childcare benefits in an effort to bring stability to their workforces.

When researchers looked at a collection of essential expenses — such as housing, childcare, utilities and insurance — they projected that Florida’s 2023 rate of inflation would be 8.1%, more than twice the national average. Largely driven by housing costs and labor costs being passed on to consumers, while much of the nation saw a cooling in price increases last year, Florida did not.

When state lawmakers convene for their 60-day, 2024 session on January 9 with a budget flush with billions as the state dodged an economic slowdown in 2023, advocates for the working poor will be pushing for measures that provide relief.

People behind the numbers

Barb Smith is a Tampa 72-year-old who works as a live-in caregiver. Since 2019, she’s been volunteering at a food kitchen operated by the non-profit Feeding Tampa Bay. When inflation started hitting hard a couple of years ago, she started running out of money.

“Gas prices went up. Everything went up,” she says. Suddenly, she found herself needing the services of the same food pantry where she’d been volunteering every day. She’s still just barely getting by. “You just can’t save any money,” she says.

Until ALICE came along, the number of people in Smith’s situation were never counted.

The federal poverty level was established in the 1960s, so relying solely on poverty statistics drastically undercounts the number of households that are in need, according to the United Way. The organization partnered with researchers and formed an advisory committee representing some of Florida’s largest institutions and corporate entities to establish a new measurement, the ALICE threshold. They sifted through data from the U.S. Census Bureau and the Bureau of Labor Statistics as well as cost-of-living adjustments specific to ZIP codes to identify households that are struggling to pay for basic needs — housing, food, health care and childcare.

They found that 1.1 million Florida households are in poverty, another 2.7 million are above the federal poverty level but below the ALICE threshold, and about 4.7 million are above the ALICE threshold.

Hard times for low-wage, working families aren’t unique to Florida. Poverty is on the rise across the nation, according to recent census data. In particular, the child poverty rate more than doubled nationally from 2021 to 2022 due in large part to the expiration of the expanded Child Tax Credit at the end of 2021, says the Children’s Defense Fund. The Biden administration estimated that 2.4 million Florida families benefited from the temporary boost. Also expired is the expanded federal Child and Dependent Care Credit, which helped offset childcare costs for families earning up to $125,000 a year.

Florida is especially hard hit because of its rising cost of living and a labor force skewed toward the service and tourism industries. Of the 20 most common occupations in Florida, 70% pay less than $20 an hour, the United Way’s Nelson says.

About one in six elementary or middle school teachers in Florida lives below the ALICE threshold. More than one in 10 registered nurses do as well.

ALICE households span the range of Florida’s demographics, sparing neither young workers nor those at retirement age, the United Way’s research shows. “The two populations most impacted and struggling financially right now are those who are below 25 and have a household, and those who are over 65,” Nelson says. “When people see an older gentleman grab their groceries at Publix, they assume he’s there because he wants to keep busy, or he likes to socialize. But frequently, it’s because he can’t make ends meet.”

Fleeing the Cost of Living

Increasingly, businesses in Florida’s more expensive counties are having trouble hiring enough workers. For every three people who move to Florida, two move away. Census data shows that nearly 740,000 people moved to Florida in 2022 while nearly 490,000 left, says Stefan Rayer, population program director for the University of Florida’s Bureau of Economic and Business Research. Floridians are mostly moving to less expensive southern states such as Georgia, North Carolina, Tennessee and Texas.

The out-migration is evident in Florida’s most expensive housing markets in South Florida. Miami-Dade and Broward counties had more people moving out than moving in between 2020 and 2022, Internal Revenue Service migration data shows.

Census records, though, show the shift in those populations to wealthier families away from moderate wage earners: The per capita income of those moving to Miami-Dade County was $144,498, while the per capita income of those leaving was $39,059, says Maria Ilcheva, census information center lead at Florida International University’s Jorge M. Pérez Metropolitan Center. Citing IRS data, an economist for the Miami Realtors Association says newly arrived households brought with them $10.4 billion in adjusted gross income, an amount more than double 2020’s figure and 174% more than pre-pandemic levels.

That shift from a community of moderate means to one much wealthier reverberates through the workforce, producing deeper labor shortages in services, construction and other sectors central to the economy.

For most ALICE families, the financial pressures — especially in parts of the state where rents have skyrocketed — aren’t just a strain on their wallets, but also a major source of anxiety, says Doug Griesenauer, vice president of community impact for the United Way Suncoast, which covers five counties in the Tampa Bay region. He points to a recent “household pulse” survey done in Florida by the U.S. Census Bureau which asked renters: What is the likelihood of you leaving your home due to eviction in the next two months?

“Literally more than half (51%) of Floridian renters believed it was very likely or somewhat likely they were getting evicted in the next two months,” Griesenauer says. “Obviously, half of all Floridians have not gotten evicted. But half of all renters are worried about eviction because they’re struggling financially. And if you’re worried about where you’re going to live in two months, that’s always going to be in the back of your head.”

“These are people who are just genuinely afraid.”

Losing Ground for Decades

The United Way’s ALICE Essentials Index in Florida, which tracks the increasing prices of basic essentials such as food, childcare and housing, increased an average of 3.3% annually from 2007 to 2023 — outpacing the 2.5% average annual increases in the national Consumer Price Index, which tracks a broader range of goods. The median wage for a retail salesperson increased just 1.9% annually during the same period, according to the United Way.

Topping the Tallahassee Agenda

The United Way of Florida is advocating for measures from the Florida Legislature that it says could help those below the ALICE threshold:

• CHILDCARE AFFORDABILITY

Tax exemptions for businesses that provide childcare for workers, and increased eligibility for Florida’s subsidized early education program.

• HOUSING ATTAINABILITY

Last year’s bipartisan Live Local Act incentivizes the construction of affordable housing through private investment with tax credits, refunds, and property tax exemptions, and prohibits local government from enacting rent-control policies. The legislation also provides down-payment assistance to first-time homebuyers earning about $100,000 a year for a family of four. In 2023, the Florida Legislature set aside $711 million in state funds for the historic initiative; lawmakers expect the Live Local Act to receive continued robust funding this year. “I think you’ll see both sides of the Legislature and the governor continue to support workforce housing through the Live Local Act and Hometown Heroes,” says Rep. Tom Leek (R-Ormond Beach), chair of the House Appropriations Committee. “The pressure on housing prices ends up squeezing out the folks you need to have a good community, like cops and teachers and nurses.”

• TAX HELP FOR ALICE FAMILIES

$1.8 million in funding for Voluntary Income Tax Assistance, a program that last year helped 72,000 ALICE families get $76 million in federal income tax refunds and $20 million in Earned Income Tax Credits. The Legislature’s 2023 tax relief package totaled $1.269 billion, according to Florida TaxWatch. Most of the tax cuts, mostly in sales taxes, were nonrecurring; only $300 million were recurring. “If you look at where the Legislature has focused its tax cuts in the last several years, it’s been designed to get to working-class folks, the people who need it the most. I expect to see any tax cuts we have affecting the largest swath of people we can, whether they’re working-class folks or parents or whatever it may be,” Leek says.

45%

The percent of Floridians who live below the ALICE income threshold.

$26,500

Annual income for a family of four to be below the federal poverty level.

$66,324

The estimated cost of household essentials needed to live and work in the modern economy for a family of four.

Source: ALICE Household Survival Budget, 2021. The United Way of Florida, ALICE in the Crosscurrents, 2023

How much will the state legislature have to spend?

• The 2023-24 state budget was $116.5 billion. Gov. Ron DeSantis is proposing a $114.4 billion budget for 2024-25.
• Florida’s General Revenue Fund collections have exceed expectations, in part because the expected recession failed to materialize last year, state economists say. “Florida’s remarkable fiscal run continues,” says Florida TaxWatch.

Targeted Tax Breaks

Lawmakers in 2023 passed $1.269 billion in tax relief through new exemptions and a series of “sales tax holidays” in which the tax is suspended for two weeks throughout the year. Parents benefit from new exemptions on diapers, baby wipes, clothing, strollers and cribs. Dental hygiene products and adult diapers also are sales tax exempt. Two, two-week back-to-school sales holidays — one in July/August and the other in January — cover clothes, backpacks and school supplies. Advocates for Florida’s ALICE population support expanding the back-to-school sales tax and similar sales tax holidays. For 2024-25, DeSantis is proposing more than $1.1 billion in tax breaks, including six sales tax holidays and a one-year exemption on taxes, fees and assessments on home owners insurance policies to reduce premiums up to 5%. – Michael Fechter

• SOUTHWEST FLORIDA

A Microcosm of Economic Stress

When the Sarasota Chamber of Commerce recently set out to find how the region’s housing shortages were impacting businesses, one group of survey responses stood out: Those from its young professionals’ group.

Of the roughly 500 responses from chamber members ages 40 and younger, 70% said they were considering leaving Sarasota because of the cost of housing. One in five commuted more than 40 miles per day because they could not afford to live locally. Other findings in the survey: 73% of local businesses said the lack of affordable housing affected their ability to recruit and retain workers. Hundreds of workers responding to the poll said they had turned down job offers there because of the cost of housing.

“It affects businesses’ ability to recruit people to come here and work. The wages aren’t keeping up with the cost of living here,” says Heather Kasten, president and CEO of the Greater Sarasota Chamber of Commerce. “The labor market is tight enough. Throw in this lack of affordable housing, and the business community is really feeling the pinch of that.”

Sarasota County’s largest employer, the Sarasota Memorial Health Care System, felt that it needed to make market pay adjustments for 6,500 out of 10,000 staffers in 2023. It did the same thing for 6,000 staffers in 2022.

“We understand that the cost of living in our region, especially housing, is a challenge not only for entry-level employees but also those earning $50,000 or $60,000 a year or more,” says its spokeswoman, Kim Savage. “We have had to step up and widen our recruitment efforts to attract a sufficient number of qualified candidates.”

Sarasota County’s largest private employer, PGT Innovations, is considered one of Florida’s manufacturing success stories. (It makes impact-resistant windows and doors and has been riding a wave of expansion as home construction booms.) But even a top manufacturer that’s frequently lauded for how it supports its workforce can have trouble finding employees, so the company has launched initiatives to retain its roughly 5,500 employees amid a challenging economy. Just paying competitive wages wasn’t enough anymore, says CEO Jeff Jackson.

PGT built its own childcare center where employees get a steep discount, and they keep it open late for swing-shift workers. It opened a free on-site health care clinic for workers and their families. For employees’ dependents, it offers $2,000-a-year scholarships for college or trade school. And it spent $15 million to make every employee a shareholder in the company.

“Housing is a tough one. We can’t build homes,” Jackson says. “But what we can do is try to help our folks in any way we can in terms of making life easier in other areas that we can impact — within the confines of being a public company and making money at the same time.”

Most of the 2,200 workers at its Venice headquarters commute from places historically more affordable than Sarasota, such as Englewood, Port Charlotte and Punta Gorda. But those places keep getting pricier as waves of newcomers arrive. “Tons of people are moving to Florida, so all these areas where my employees live are becoming less affordable,” Jackson says. “People are having to move farther away from work. It just makes it tougher.”

The Senior Friendship Centers, a Sarasota-based non-profit, serves four counties. The centers are having trouble filling professional-level positions because applicants won’t move here from other parts of the country and the state. “They accept the job and then back out because they can’t afford a place to live,” says President and CEO Erin McLeod. “We’ve lost several staff members over the last couple of years who’d had to move or leave the state because their landlord raised their rent.”

Of 40 staffers who work at the Sarasota headquarters, only two live in Sarasota County while the rest commute from less expensive neighboring counties such as Charlotte or DeSoto. “We have staff in other states that work for us now. They moved away for housing purposes,” McLeod says.

In expensive Collier County, the school district has been forced to change how it recruits new teachers. It’s making increasing use of programs such as Teach 4 Collier, which recruits locals who want to change careers, and Grow 2 Teach, which trains non-instructional staffers in the district to be teachers.

“Getting folks from outside the county tends to be difficult because of the housing and the cost of living here,” says Val Wenrich, the district’s chief human resources officer. “A lot of our recruiting is done directly in the county — people don’t have to struggle to find housing because they already live here.”

Tags: Feature, ALICE in Florida