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Like I said before in other cities in this country like say for instance LA if you make 100,000 there it would be like 80,000 here. But guess what rent in LA is double so basically a lot of money but majority of it is going to rent. Also NY and LA are the two largest cities in the nation so you would expect a very diversified economy but at the same time Miami is pretty big to. In Florida it depends on what field you are in which may or may not have a livable wage. So do me a favor if your still here by November and vote that scumbag Rick Scott out of office you can think him for depressing wages.
I have an MBA from a top 20 program, work experience at a top tier Investment Bank and Silicon Valley experience prior to MBA. I speak Spanish fluently. Yet there are no jobs that pay in line with what I can get in Houston (3 years out of MBA) so after less than 2 years I am thinking of going back there although I love living in South Florida...
Well the only reason I would be compelled to move to Houston would be money also, so there's your trade-off. You can accept lower pay and live in your favorite city or you can live in Texas and make more. All depends on what's more important to you, money or lifestyle.
I plan on getting my masters here and hopefully landing a job in SoFla, but my salary expectations are not outrageous given the unique job-market dynamics here. This isn't a freezing high-tax northeastern city where employers have to sweeten the pot to entice people to live here. Miami employers don't really have to bend over backwards for candidates due to its prime geographical location. People want to live here, and are willing to take lesser pay for it.
Well the only reason I would be compelled to move to Houston would be money also, so there's your trade-off. You can accept lower pay and live in your favorite city or you can live in Texas and make more. All depends on what's more important to you, money or lifestyle.
I plan on getting my masters here and hopefully landing a job in SoFla, but my salary expectations are not outrageous given the unique job-market dynamics here. This isn't a freezing high-tax northeastern city where employers have to sweeten the pot to entice people to live here. Miami employers don't really have to bend over backwards for candidates due to its prime geographical location. People want to live here, and are willing to take lesser pay for it.
I think you're putting too much on the lifestyle component to explain wages. Plenty of cities offer a certain lifestyle that a big chunk of people find appealing (Seattle, Denver, Austin among those that are cheaper and of course places like LA, NYC, the Bay Area, etc). Those less expensive cities have much higher average wages than Miami. The cost of living doesn't explain the wage difference but rather the wage difference (and all of the wealth that comes with that) explains the cost of living difference.
A minimum wage employee at McDonalds is a minimum wage employee at McDonalds no matter how expensive the city (assuming they haven't enacted living wage standards). Similarly, you can take someone in rank and file jobs that making between 1.5x and 2.5x of minimum wage like an insurance claims processor and they make basically the same thing in Miami, LA, and Cincinnati. What drives wages in a region aren't the minimum wage jobs or the standard semi-skilled jobs like insurance claims processors, but the higher wage, highly skilled professions that require firms to invest heavily in human capital.
We can identify industries that Miami specializes in by looking at what are called industry location quotients. An LQ of 1.5 means that as a percent of MIA's total labor pool, an industry would have 1.5x the jobs in that field compared to the rest of the nation. Ignoring the 3 or so smaller niches that might employ 5K here or there, Miami's specialties (and wages) are:
Hospitality/Tourism 1.95 LQ, 85,000 people, wages of 39,850 compared to 32,700 in the USA
Transport/Logist 1.62 LQ 46,000 people, wages of 45,950 compared to 47,600 in the USA
Distribution/Ecommerce 1.46 LQ, 113,000 people, wages of 53,500 compared to 63,500
Marketing/Design/Publishing 1.26 LQ, 22,000 people, wages of 57,000 compared to 73,500
Financial Services 1.32 LQ 36,500 people, wages of 100,800 compared to 127,100
The takeaways: 1) the industries MIA is most specialized in (the first two) don't pay very well if we're comparing it to all specialized industries. 2) in those other three industries with national wages of 60K+, Miami underperforms. For example, on the marketing side, Miami isn't the place you go to hire a creative team for a marketing campaign for your big company. You go to NYC, Chicago, LA and others for those things. Those creative agencies are the ones making the high wages. Finance is a very broad field. You don't go to Miami to raise capital, to facilitate a large acquisition, or for market expertise. You find that expertise most heavily in NYC, BOS, DC, Chicago, and SF. The average wage for financial services in those regions is between 160,000 and 240,000. If it's specialized around a certain industry, you'd find the same in Houston for that portion of financial services too. Miami does personal banking, some basic wealth management (the guy who tries to get you to by a life insurance annuity) and they do back office support as a service intermediary between NA and Latin America. That's not where the money is in finance.
So it's not a choice between doing finance a Houston/Chicago or Miami. The types of jobs in finance that exist in the first two don't exist in Miami. Not in sufficient numbers anyway. If you do find the same work, you're not going to make as much because there is no bargaining power through firm switches. If someone good in my field lost their job in Chicago, they could have 3-4 of a dozen firms calling them the next day. Firms bid up the labor pool's wages at raise and bonus times. In a city without that presence, there might only be 1-2 firms doing that work at any level at all. Your employer has the power, but not due to perceived lifestyle benefits in Miami. This works the same way in Cleveland too.
My old firm's practice area's median wage in Chicago is roughly 100K. The average wage is 180K. Their three tier I presences (in terms of headcount and revenue) are NYC, Chicago, an the Bay Area. Tier II is BOS, DC, Philly, ATL, DAL, HOU, LA. Tier III is Seattle, DET, Minneapolis, DEN. There is not enough market in Miami (or anywhere else) to justify the investment. The firm's practice areas that do exist in the Miami office are more basic and commoditized services (lower wage) because that's all the area needs and frankly we can't find the workforce down there to do the work even if we wanted to. It's easier to fly someone down from ATL.
In the industry where Miami really excels over the national average, they need to hire the best to differentiate their product. That industry happens to be hospitality, and while the people make 20% more in MIA than they do nationally, the industry standard wages are very low to begin with, so MIA doesn't get much bang for their buck here in terms of economic development and positive wage impact. If you compare MIA to a city like DEN (where wages are on avg higher), you'll see that DEN concentrates in more things that produce high wages (communications, oil and gas, finance, aerospace, marketing, business services). This is why wages are higher in DEN...not some perceived lifestyle compromise, cost of living, taxes, or any other reason.
What makes Miami a little different is that it is higher cost of living than their industry alignment and wages dictate, but that's due to the large proportion of people who buy real estate and live down there who don't participate in the economy as workers. I agree that the Vegas-Miami comparison was harsh. A better one would be Phoenix-Miami. Both don't specialize much in industries that produce high wages and both have an artificially high demand for their housing due to amenities certain groups of people value.
Last edited by Chicago76; 09-24-2014 at 11:39 AM..
I think you're putting too much on the lifestyle component to explain wages. Plenty of cities offer a certain lifestyle that a big chunk of people find appealing (Seattle, Denver, Austin among those that are cheaper and of course places like LA, NYC, the Bay Area, etc). Those less expensive cities have much higher average wages than Miami. The cost of living doesn't explain the wage difference but rather the wage difference (and all of the wealth that comes with that) explains the cost of living difference.
A minimum wage employee at McDonalds is a minimum wage employee at McDonalds no matter how expensive the city (assuming they haven't enacted living wage standards). Similarly, you can take someone in rank and file jobs that making between 1.5x and 2.5x of minimum wage like an insurance claims processor and they make basically the same thing in Miami, LA, and Cincinnati. What drives wages in a region aren't the minimum wage jobs or the standard semi-skilled jobs like insurance claims processors, but the higher wage, highly skilled professions that require firms to invest heavily in human capital.
We can identify industries that Miami specializes in by looking at what are called industry location quotients. An LQ of 1.5 means that as a percent of MIA's total labor pool, an industry would have 1.5x the jobs in that field compared to the rest of the nation. Ignoring the 3 or so smaller niches that might employ 5K here or there, Miami's specialties (and wages) are:
Hospitality/Tourism 1.95 LQ, 85,000 people, wages of 39,850 compared to 32,700 in the USA
Transport/Logist 1.62 LQ 46,000 people, wages of 45,950 compared to 47,600 in the USA
Distribution/Ecommerce 1.46 LQ, 113,000 people, wages of 53,500 compared to 63,500
Marketing/Design/Publishing 1.26 LQ, 22,000 people, wages of 57,000 compared to 73,500
Financial Services 1.32 LQ 36,500 people, wages of 100,800 compared to 127,100
The takeaways: 1) the industries MIA is most specialized in (the first two) don't pay very well if we're comparing it to all specialized industries. 2) in those other three industries with national wages of 60K+, Miami underperforms. For example, on the marketing side, Miami isn't the place you go to hire a creative team for a marketing campaign for your big company. You go to NYC, Chicago, LA and others for those things. Those creative agencies are the ones making the high wages. Finance is a very broad field. You don't go to Miami to raise capital, to facilitate a large acquisition, or for market expertise. You find that expertise most heavily in NYC, BOS, DC, Chicago, and SF. The average wage for financial services in those regions is between 160,000 and 240,000. If it's specialized around a certain industry, you'd find the same in Houston for that portion of financial services too. Miami does personal banking, some basic wealth management (the guy who tries to get you to by a life insurance annuity) and they do back office support as a service intermediary between NA and Latin America. That's not where the money is in finance.
So it's not a choice between doing finance a Houston/Chicago or Miami. The types of jobs in finance that exist in the first two don't exist in Miami. Not in sufficient numbers anyway. If you do find the same work, you're not going to make as much because there is no bargaining power through firm switches. If someone good in my field lost their job in Chicago, they could have 3-4 of a dozen firms calling them the next day. Firms bid up the labor pool's wages at raise and bonus times. In a city without that presence, there might only be 1-2 firms doing that work at any level at all. Your employer has the power, but not due to perceived lifestyle benefits in Miami. This works the same way in Cleveland too.
My old firm's practice area's median wage in Chicago is roughly 100K. The average wage is 180K. Their three tier I presences (in terms of headcount and revenue) are NYC, Chicago, an the Bay Area. Tier II is BOS, DC, Philly, ATL, DAL, HOU, LA. Tier III is Seattle, DET, Minneapolis, DEN. There is not enough market in Miami (or anywhere else) to justify the investment. The firm's practice areas that do exist in the Miami office are more basic and commoditized services (lower wage) because that's all the area needs and frankly we can't find the workforce down there to do the work even if we wanted to. It's easier to fly someone down from ATL.
In the industry where Miami really excels over the national average, they need to hire the best to differentiate their product. That industry happens to be hospitality, and while the people make 20% more in MIA than they do nationally, the industry standard wages are very low to begin with, so MIA doesn't get much bang for their buck here in terms of economic development and positive wage impact. If you compare MIA to a city like DEN (where wages are on avg higher), you'll see that DEN concentrates in more things that produce high wages (communications, oil and gas, finance, aerospace, marketing, business services). This is why wages are higher in DEN...not some perceived lifestyle compromise, cost of living, taxes, or any other reason.
What makes Miami a little different is that it is higher cost of living than their industry alignment and wages dictate, but that's due to the large proportion of people who buy real estate and live down there who don't participate in the economy as workers. I agree that the Vegas-Miami comparison was harsh. A better one would be Phoenix-Miami. Both don't specialize much in industries that produce high wages and both have an artificially high demand for their housing due to amenities certain groups of people value.
You make some good points above, particularly that much of Miami's economy is service based and there are some parallels to Vegas in that those industries (hospitality, restaurants, etc...) tend to produce a lot of low wage jobs. My comments about wages earlier and supply/demand was taking cost of living into account (not gross wages). I would imagine that the median house value to income level here is quite high because a lot of people want to live here (or have second homes here) and the local job market doesn't have sufficient demand to necessitate paying wages that keep up with the cost of living. I've heard the same complaint about San Diego which also would have a sunshine tax. The limited space for housing due to the everglades also plays into this.
I do think your assessment of the financial services sector was way too harsh. Miami is quite strong in private wealth banking for Latin America. There is a reason why JP Morgan has a nice shiny building in Brickell. When Latin Americans put their money offshore (and they put a lot of money offshore), many of them come to Miami if they're not proven crooks. Some of the Latin American banks like Davivienda (Colombia) and Banco do Brasil have opened also opened up branches here. There are also an increasing number of funds (mainly hedge funds) moving to Miami because of tax advantages: Universa, ESL, Everest, Fairholme, and someone already mentioned HIG on the private equity side who has been down here for years. With the port, I imagine there is also a good deal of trade finance.
There are also some solid marketing companies down here, particularly targeting the US Hispanic market niche.
In summary, I think Miami suffers from the low-wage syndrome you mention which certainly contributes to the cost of living issue, but, there are other issues at play as well. On a more positive note, I do think that Miami has a lot more potential than Vegas mainly due to its port and ties with Latin America.
I'd love to see a comparison of wages of cities between non-foreign born folks.
There's no way to get to that unfortunately. Income separated by foreign born and native maybe, but then you'd run into problems because income would include SS and pensioners and Miami's population skews older.
The foreign born as a percent of total pop probably isn't quite as different as you think it is also when you're looking at wages because Houston's foreign born group will trend more heavily into working age. Miami's foreign born include a lot of wealthy retirees and also middle aged folks in the boatlift. Hard to believe it, but those guys are mid 60s now.
18-65 foreign born as a percent of total 18-65:
San Jose 47.2%
Miami 46.6%
LA 41.4%
SF 35.7%
NYC 35.3%
Houston 30.2%
SJ and SF have a really highly educated immigrant workforce compared to the other 4.
Like I said before in other cities in this country like say for instance LA if you make 100,000 there it would be like 80,000 here. But guess what rent in LA is double so basically a lot of money but majority of it is going to rent. Also NY and LA are the two largest cities in the nation so you would expect a very diversified economy but at the same time Miami is pretty big to. In Florida it depends on what field you are in which may or may not have a livable wage. So do me a favor if your still here by November and vote that scumbag Rick Scott out of office you can think him for depressing wages.
Rents are not double in LA.
Just took a quick look on Craigslist and the rents are fairly close between Miami and LA.
There is on average about a $200 difference(LA being more expensive) with listings showing similar amenities, but not even close to double the rent. And you utility bill will be lower in LA, not having to constantly run the A/C.
Example $1,350 in Miami and $1,550 in LA.
NYC might be double, but not LA.
FL is known for low salaries. Always has been. Even professional jobs such as nurse and teachers are among the lowest in the nation.
I have known more people struggling in FL or working a server job(second job) on weekends to make ends meet than in states that had a higher COL, but the salaries were higher.
When you take a 50% pay cut but only lower your expenses by 20%, you're not better off.
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