City grows poorer with population increase
Low-wage jobs, not tech positions, show highest rate of increase
At the turn of the century, Orlando recognized it had a problem. Could it shed some of its identity as the house of the Mouse and diversify its economy?
“After decades in the shadow of Mickey,” a 2001 Sentinel story titled “Tech vs. Tourism” read, “the Orlando area wants to be known worldwide for microchips as much as the Mouse, software as much as Shamu and bandwidth as much as beaches.”
Though some of those changes did come to fruition, the reality nearly two decades later is this: While Orlando’s population has increased at a rate to dwarf the national average, that growth has been in the low-wage jobs that have been stalwarts of Orlando’s economy — not in technology and other industries, according to a new Stateline analysis of Bureau of Economic Analysis data.
“It’s a problem if we are not seeing growth in other sectors. It’s a tapestry. And yes, tourism is a major thread, but it touches a lot of other sectors we well.” Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness
Low-wage jobs in tourism, retail, restaurants and the service industry continue to proliferate at a higher rate than the rest of the country, leading Orlando to grow poor as it gets bigger.
The metro area’s population has grown 51 percent over the past 17 years — nearly three times the national average — but wages have increased by only 5 percent. That’s compared with the 17.9 percent increase in wages that is the average for most cities across the nation, Stateline found.
The same is the case in some other Florida cities, including Lakeland, Ocala and Sarasota, and in other major tourism towns such as Las Vegas.
The Nevada gambling powerhouse is ahead of only Orlando with the most hotel rooms in the nation, according to hotel data and analytics firm STR. The popula-
tion has grown by 58 percent, while wages have grown only 1 percent, Stateline’s study found.
“Places like Las Vegas and parts of Florida have seen their growth on the back of very low-wage jobs, so in a sense they’re growing poorer as they grow,” Paul Flora, an economic analyst at the Federal Reserve Bank of Philadelphia, told Stateline.
A dependency on tourism
The issue worsened after the recession, when Florida lost many mid- and highwage jobs, said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. Low-wage tourism jobs recovered first.
“The rest of the Florida economy, it was really 2012 before things started to take off again,” Snaith said. “Tourism had a head start.”
The sector has continued to grow robustly, thanks in part to new attractions at the theme parks that keep visitors coming back. Orlando repeatedly breaks its own record as the most highly visited city in the United States. About 72 million people came in 2017. New York City got 62.8 million and Vegas had 42.2 million.
Even more people may be coming as a second wave of baby boomers retires in the coming years, said Hector Sandoval, director of the Economic Analysis Program for the University of Florida’s Bureau of Economic and Business Research.
“They are going to have a lot of retirees coming here, and they are going to demand a lot of services. The state needs to be ready to provide those services,” Sandoval said. “You want to create also high-skilled wages, but so far, this big push is just the service industry.”
The other concern, Stateline pointed out, is that many of those low-wage jobs are positions that could be susceptible to automation in the future. According to a report from the Institute of Spatial Economic Analysis, Orlando is the seventh most at-risk metro area, with 61.8 percent of its jobs at risk of being done by machines.
How much of that will be true is still debatable, Snaith said.
“Some jobs may be replaced by automation, new jobs get created and sectors that we probably haven’t imagined are going to come to fruition as all this plays itself out,” he said. “I don’t subscribe to the dystopian ‘Terminator’ outlook.”
Besides, there have already been some successes, he said. Medical City in Lake Nona has brought higher-wage jobs to Orlando, and sectors including construction, professional business services and finance are growing.
“It’s a problem if we are not seeing growth in other sectors,” Snaith said. “It’s a tapestry. And yes, tourism is a major thread, but it touches a lot of other sectors we well.”
Tourism hiring is transforming as well, said Youcheng Wang, dean of the Rosen College of Hospitality Management at UCF. At some companies, the focus is moving toward workers with college degrees, who command higher wages.
“If you talk to more of the companies, Darden and Red Lobster [for example], they are adjusting their strategies,” Wang said. “They prefer to work with older employees who have bachelor’s degrees or higher. These people will cost a bit more as it comes to salary, but they will tend to stay with the company longer and they have better opportunities to be promoted.”
A push for higher wages
One of the biggest changes came this year, when Disney agreed to a contract with its workers union, the Service Trades Union, to raise the minimum hourly wage for its 70,000 local employees to $15 an hour by October 2021.
The promise of those higher wages has fundamentally changed how some workers live. Disney employees Krysta and Seth White, for example, closed on a house.
So far, the Whites’ wages have increased by about a $1.50 raise an hour each. Between the couple, who work as many as 60 hours a week, and another friend who is living with them, they’ve been able to scrape together enough to move into a home in Davenport.
“That makes a big difference for us,” said Krysta White, who works as an attraction hostess at the World of Pandora’s Flight of Passage ride in Animal Kingdom. Her husband works the ride, too.
Disney’s wage increase has trickled across Central Florida’s tourism industry, leading to raises at Universal and SeaWorld parks.
The spillover is positive, but it won’t mean that souvenir shops are now going to raise their wages to $15 an hour because Disney did, Snaith said. The reality is, unemployment is low — 2.7 percent in the Orlando metro area in October — so even with greater population, companies still need to work to attract workers, low-wage or otherwise.
“What the major theme parks are doing is staying ahead of the curve in the labor market,” Snaith said. “They want to make sure they have the workers they need to deliver the experience their guests expect.”
But for those workers, living on a tourism salary is challenging, Krysta White said. Some of her coworkers have two jobs, or take on extra hours.
“I know personally some people in Pandora that will pick up 80 hours a week, 90 hours a week. They are killing themselves just to buy their kids a Christmas present,” White said. “It’s very hard to raise a family on a Disney paycheck.”
Eric Clinton, president of Unite Here Local 362, said Orlando’s economy is not likely going to move away from tourism — and it’s up to companies to raise wages for workers and change the dynamic in Orlando’s economy.
He knows the issue particularly well, he said, because he was a 20-year-old Disney worker in 2001 when the Sentinel interviewed him for its Tech vs. Tourism story.
“We have an identity crisis that we need to come to grips with,” Clinton said. “If we think Orlando is all of a sudden not going to become a tourism destination, then you have to get your head checked.”