Florida’s Job Structure

Authors: Dave Denslow; Jim Dewey

As a consequence of its dependence on retirees, growth, and tourism, Florida has a disproportionate share of relatively low skill jobs. To quantify the differences between Florida’s job structure and the nation’s, it is important to clarify what we mean by “low skill” jobs. Wages vary between locations for many reasons, and several of these sources of wage variation have nothing to do with the inherent quality of an area’s job structure. For example, workers will be willing to do the same job for lower pay when the cost of housing is lower or amenities that increase the quality of life are higher. Such factors are balanced across locations by the interaction of supply and demand in labor markets.

It would not make sense to say an area had low-paying jobs because the workers were happy to accept low wages in exchange for good weather, beautiful beaches, and moderate housing prices. Moreover, at any point in time, temporary idiosyncratic disruptions in labor supply and demand will influence wages, but that is hardly of interest in studying the skill structure of the local economy. So, for purposes of comparing job structures across locations in terms of skill, we value each job at its national average wage.

The Occupational Employment Statistics (OES) program of the Bureau of Labor Statistics measures occupational wages and employment for nearly 800 occupations...

The Occupational Employment Statistics (OES) program of the Bureau of Labor Statistics measures occupational wages and employment for nearly 800 occupations, and the data are available down to the level of Metropolitan Statistical Areas (MSAs). Figure 1 shows employment shares (in percentage points, which sum to 100) by broad occupation group for Florida for 2008. A great deal of information is contained in the figure. The number in parentheses after the group title on the left side of the figure is the national average wage for occupations in the group relative to the overall national average. The national average wages have been adjusted to remove the impact of variation in the share of occupations across cities.

As is well known, Florida is generally long on lower skill jobs and short on higher skill jobs. The only high-skill occupation groups where Florida has a larger than national employment share are legal and healthcare-related occupations. The state economy is particularly long on jobs related to serving retirees: sales; food preparation and service; and office and administrative support. Even though the state was high on both construction occupations and installation, maintenance, and repair occupations—which pay slightly better than average—they are associated with the low-skill, tourism, and retiree growth path. Combining information across all individual occupations indicates that the real relative wage of Florida’s average job was 2.9% below the national average in 2008.

Florida and US Occupation Shares, 2008 (Figure 1)

Plant 1

Note: The numbers in parentheses after the occupation group titles  to the left  represent the ratio of the national average wage for that group  to the overall national average wage.

Figure 2 compares the job skill index for selected states in 2008. The numbers in parentheses beside state names are the 2008 rank. The states selected provide a useful comparison group. Nevada shares some of Florida’s heavy reliance on tourism. The southern states are geographically nearby, and among them Georgia and North Carolina do much better, roughly equaling the national average. If Florida aspires to attract high-skill jobs, it will have to emulate states like Massachusetts, Connecticut, Colorado, New York, New Jersey, Minnesota, California, Delaware, New Hampshire, or Washington, at least in so far as those states have done things to grow and attract such jobs. Virginia and Maryland have among the highest skill job structures too. They are excluded because, presumably, that largely reflects the influence of the nation’s capital, which Florida can do nothing to replicate. Similarly, Alaska has an above average job structure, but for reasons Florida cannot emulate, as does Idaho, to a lesser extent.

2008 Job Skill Index (Figure 2)