State’s top economist says wages are up for Florida workers — but so is inflation

Florida historically has been a low-wage state. But, according to state economist Amy Baker, wages have consistently grown in the Sunshine State since we emerged from the pandemic over the past two years — particularly in the leisure and hospitality sector.

Florida workers have made approximately 88.5% of the U.S. annual wage on average, Baker told the members of the House Appropriations Committee on Tuesday. But preliminary data for 2022 says that ratio has increased to 91.1% of the U.S. average, “something that we haven’t seen since the turn of the century,” she said.

“So, Florida, which has thought of itself as a low-wage state because of the mix of jobs we have, is now seeing a lot of pressure on wages that we haven’t seen before,” added Baker, coordinator of the Florida Legislature’s Office of Economic & Demographic Research.

That wage growth is part of a national trend since the pandemic, as a U.S. labor shortage continues. However, that growth may be slowing. Annual pay in the private sector in the U.S was up 5.7% over last year as of October, according to the ADP Research Institute. However, that was the slowest pace of growth since October 2021. The report showed that annual pay was up by 6.4% in Florida.

Baker said that, based on projections from the state Economic Estimating Conference conducted this summer, she expects average annual wage growth to continue somewhere between 3% and 3.8% in each of the next three years, so it’s unlikely that there will be any “disinflation” or a reduction in wages.

“That means that at least where we are in wages is probably going to stay,” she said. “We’re probably not going to see any improvement in that. The pace of growth may change in the future, but higher wages are essentially here to stay.”

That information comes in the context of the average annual wage in Florida being $63,770 in 2022, according to the Florida Bureau of Workforce Statistics and Economic Research Quarterly Census.

However, inflation

While the data show that the state’s average annual wage has increased as a share of the U.S. average, there are multiple factors to consider when evaluating the economic health of its state and its residents, said Sadaf Knight, CEO of the Florida Policy Institute, a research and advocacy organization.

“First, the state minimum wage, which Florida’s 2020 voters opted to boost via a constitutional amendment, is increasing each year until it reaches $15 in 2026. Even with this increase, however, Florida Policy Institute’s recent dashboard shows that the minimum wage — currently $12 — is still not a living wage in most counties in the state,” Knight told the Phoenix in a written statement.

“It’s also important to look at housing inflation in Florida, which is among the worst in the nation right now and makes it so that wage growth is not as impactful for everyday Floridians,” she added. “Finally, it’s crucial to take account of numerous indicators to get a comprehensive look at how Floridians are faring, including, for example, median wages, job quality, insurance coverage rates, retirement benefits, and physical well-being.”