South Florida Labor Market Shifts as Pandemic Hiring Slows

South Florida's labor market is entering a period of course correction as the hiring surge that accompanied the region's pandemic-era population and employment boom begins to fade, according to a report from FAU.

South Florida's labor market is entering a period of course correction as the hiring surge that accompanied the region's pandemic-era population and employment boom begins to fade, according to the latest South Florida Economic Outlook Report from Florida Atlantic University.

While overall employment growth across Palm Beach, Broward and Miami-Dade counties has begun to flatten, salary growth remains strong in much of the region. Average salaries increased by 7.5% in Palm Beach County, 5.1% in Broward County and 5.1% in Miami-Dade County year over year, according to the report.

"What we're seeing looks less like a downturn than a low-hire, no-fire market. Employers have slowed the pace of new hiring, but they aren't letting go of the workers they already have, which is why employment is flattening while salaries keep climbing." said Bryan Cutsinger, Ph.D., assistant professor of economics in FAU's College of Business.

The latest data suggest that South Florida's labor market is moving away from the unusually rapid hiring patterns that characterized the pandemic and its aftermath. As migration into the region slows and businesses adjust to changing demands, some industries are seeing employment contracts even as wages continue to rise.

In Palm Beach County, the real estate sector saw a 9.7% decrease in employment, despite wages rising 9.4% year over year. In the finance and insurance sectors, wages growth dropped 3.5% and employment growth dropped 3.2% year over year. In Broward County, the finance and insurance sector wage growth declined 3.2% and employment growth was down 1.7%, while the professional and technical services sector saw 3.3% employment growth and 4.8% wage growth.

In Miami-Dade County, however, the finance and insurance sector grew 4% in employment and 9.8% in wages year over year.

"During the major influx of finance workers into South Florida, employers may have hired more finance/insurance workers than ultimately needed. Palm Beach and Broward took on a wave of finance hiring relative to a much smaller existing base, so the adjustment there is sharper," Cutsinger said. "Miami-Dade was already the region's financial center, with the infrastructure and the talent pool to absorb the growth, and it's still adding finance jobs and paying more for them. That points to a pullback concentrated in the markets that grew fastest relative to their existing base, rather than a broad retreat from South Florida."

The report did find that new business formation remains strong in the region, a positive indicator of the direction of the region's economy and growth.

"People don't typically start a business if they believe the future is extremely bleak," said Cutsinger. "Florida continues to be a business-friendly state, attracting entrepreneurs who remain optimistic about the region's capabilities."

The South Florida Economic Outlook Report, produced by Cutsinger and updated quarterly, offers localized, industry-specific data at the county level for Palm Beach, Broward and Miami-Dade counties. The report offers a clear view of the evolving business landscape, employment levels and annual salaries by industry and economic production in the tri-county area.

-FAU-