Most People of Color in Miami Have Little Savings, Study Says
It sucks to be poor pretty much everywhere in America. But Miami is an especially cruel place if you're low on cash. Without a car, it takes hours to travel a few short miles by bus. If you live in a cheap residential neighborhood, congrats: Some rich asshole will put a gigantic, metal tower for millionaires next to your home soon. If you're struggling, you'll simply be paved over.
A study by the Corporation for Enterprise Development, a nonprofit think tank, released yesterday lays bare how much Miami's high rents and cost of living harms people of color. According to the report, 74 percent of Miami's black and Latino population lives in "liquid asset poverty," meaning they don't have enough savings to cover their basic life expenses for three months.
The report, sponsored in part by J.P. Morgan, stems from the CFED's Racial Wealth Divide Initiative, a program started in 2015 to help address the ways systemic racism holds back people of color economically. The CFED itself is based in Washington, D.C.
"People of color in Miami — black, Asian, and Latino populations — generally struggle more than their peers nationwide, yet Miami’s white population often has better economic outcomes than the white population nationwide," Dedrick Asante-Muhammad, the CFED's racial wealth divide initiative director, wrote in the report.
According to his team's research, whites in Miami are doing significantly better than people of color despite Miami's status as a majority-minority and Latino-dominated town.
The report says whites in Miami make $11,728 more per year than whites nationwide. But Miami's black population makes $14,388 less& than blacks do on the whole. The city's Asian and Latino populations also make $6,101 and $13,910 less per year than national averages. Black Miamians also have a 1.6 percent higher rate of unemployment than the national rate.
When it comes to savings, Miami's whites are also doing exceedingly well, while people of color are lagging behind national averages. Whites in Miami-Dade County have a 7 percent lower rate of "liquid asset poverty" than the national average, but the black population's rate is more than 10 percent higher, and the Latino population's is 3 percent higher.
Median household income in Miami also breaks down frighteningly along racial lines. The median income for African-Americans and Haitian-Americans in Miami is just $21,000. Among Cubans, that number is $25,000, and Mexicans make a median of $46,000 per year.
Whites, by contrast, have a median household income of more than $70,000.
"The city must, therefore, directly address the disparities between and within Miami’s racial and ethnic groups in order to successfully combat the racial wealth divide," the report says. "This can only be done by working with trusted organizations on the ground."
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When it comes to the city's disparity in savings, the report names one clear reason, which shouldn't surprise anyone paying attention: rent.
By the CFED's estimate, 69 percent of renters in Miami are "cost-burdened," which means they spend more than 30 percent of their income on rent each month. By and large, the report shows that the city's white residents tend to arrive in Miami with far more money from the get-go: Whites from well-to-do families are increasingly able to buy homes and pay reasonable mortgages, while the city's communities of color are getting squeezed harder and harder as rents drive skyward.
The rent-and-savings squeeze also makes it more difficult for Miamians of color to attend college and pull themselves out of the cycle. The report says only 57 percent of Miami's Haitian community holds a high-school diploma, and just 5 percent have a college degree.
"While the majority of the city’s households rent their homes, households of color pay a greater share of their incomes on rent than White renters," the report says. "These outsize housing costs leave many families without the means to save or build a basic safety net for financial emergencies, let alone build the wealth needed to lay the foundation for upward mobility."
Though many Miamians have found ways to make things work economically as the city grows more expensive, the report shows that most people of color in Miami are just barely scraping by. One slipup could spell economic disaster.
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