Florida has seen considerable economic growth over the past few years, but it is becoming increasingly clear that the wealth isn’t being shared equally. According to a 2018 report by the Economic Policy Institute, Florida has one of the highest rates of income inequality in the country, second only to New York State.
Using 2015 data from the Census and the IRS, the EPI compared the average incomes of the top 1 percent of earners to the bottom 99 percent. For Florida, the top 1 percent made about 40 times more money annually than everyone else — $1,543,124 compared to $39,094, respectively.
Strikingly, these millionaires at the top of the state’s economy captured over a quarter (28.5 percent) of all income in Florida in 2015, despite being only 1 percent of the population.
What’s behind the Sunshine State’s extreme income gap? One major contributing factor is low wages for most Florida workers.
According to a 2019 report by the United Way of Florida, over two-thirds of Florida jobs pay less than $20 per hour. Looking at data from the Bureau of Labor Statistics, most of these jobs are in traditionally low-to-medium-skilled industries like food service, hospitality, retail and construction. As a result, nearly half (46 percent) of Floridians either live in poverty or are at risk of falling into it.
Another aggravating factor is Florida’s tax system. Florida has no income tax, relying solely on sales tax, property tax and lottery ticket sales for revenue. As a result, the poorest Floridians pay the highest share of their incomes to state and local taxes.
Changing Florida’s tax code, however, is an intense uphill battle. Florida’s Constitution prohibits taxes on income and estates – meaning Florida voters would have to approve a Constitutional amendment establishing either.
A likely fix to mitigate inequality comes from a Constitutional amendment to raise the state’s minimum wage to $15 per hour, which is expected to appear on the 2020 ballot. Such an increase wouldn’t reduce the pay of top earners per se, but it would lift Florida families out of poverty. Per the United Way report, a $15 minimum wage would put a family of four in Florida just above its “household survival budget,” with both parents working full time.
In a state as large and as rich as ours, there’s no excuse for working families to scrape by while top earners make millions. It is time to tackle Florida’s economic inequality head on.
Nathaniel Sweet is a junior majoring in political science.