New figures show government aid accounts for 23 cents of every dollar of income in Miami-Dade. That’s up from 8 cents in the 1960s.
Incomes are on the rebound in South Florida, thanks almost entirely to government aid.
New figures show government aid to residents soared about 40 percent throughout the recession, while overall income from employers dropped or stalled. Thanks to a flood of unemployment checks, increased Medicare benefits for an aging population, and a growing underclass needing food stamps and medical aid, South Florida now relies on government sustenance more than ever before.
In 2010, government aid accounted for 19 cents of every dollar of income earned in South Florida, compared to just 8 cents in 1969, the earliest year for which data is readily available. Miami-Dade saw an even more dramatic swing: from 8 cents to 23 cents of every dollar of income.
The surge in government aid came during the 2007-2009 recession and the wobbly recovery that followed. Between 2006 and 2010, government aid surged 41 percent in Miami-Dade alone.
“That’s a big number,’’ said Robert Cruz, Miami-Dade’s chief economist.
Wednesday’s report from the Bureau of Economic Analysis on changes in local personal income offers a statistical study of South Florida on both ends of the recession, which officially began in December 2007 and ended in June 2009. The numbers also go to the heart of the biggest debate underway in American politics this election year: What’s the proper role of government?
South Florida wages dropped 9 percent during the recession and rebounded slightly in 2010. Overall, they’re down 2 percent in South Florida since 2006, the last full year before the 2007-09 recession. The flood of aid combined with a drop in wages left South Floridians slightly ahead, with overall income up 1.8 percent in the region, according to the Bureau of Economic Analysis report issued Wednesday.
Nationally, the trend was similar, with government aid up 42 percent between 2006 and 2010. But wages also grew, up 6 percent in those five years, leading to a 10 percent gain in personal income.
Miami-Dade’s Cruz noted every recession brings a flood of government dollars as aid programs kick-in for people who lose their jobs and can’t afford to buy their own food and medical services. In fact, the rush of government help — $44 billion in South Florida during 2010 — helped keep the recession from getting worse, Cruz said.
“These kind of payments serve as shock absorbers,’’ he said. “They prevent income from falling as much.”
The statistics offer a new measure of how quickly government aid expanded in recent years throughout South Florida. But even with unemployment and poverty aid kicking with a rising unemployment rate, the biggest contributor to new aid had nothing to do with income.
Medicare, free medical aid provided to Americans as they age, grew by $2.3 billion in Broward and Miami-Dade counties between 2006 and 2010. For every new dollar of government aid that entered the region, Medicare accounted for about 25 cents.
Florida Rep. Erik Fresen, R-Miami, said that statistic troubled him. While he would expect unemployment aid and poverty programs to rise in hard times, reforms and a strong economy can free Tallahassee and Washington from those obligations.
Not so with Medicare, which is under strain as the Baby Boomer generation enters retirement.
“It’s a wholly unsustainable system,’’ he said.
Second to Medicare, poverty programs accounted for the most new government dollars: 17 percent in Broward and 21 percent in Miami-Dade, for a combined total of $1.8 billion in new assistance. Unemployment aid was a close second, accounting for just under 17 percent of Broward’s new aid and 15 percent in Miami-Dade.
But with lay-offs soaring to historic highs, no government program saw bigger growth during the downturn that unemployment aid did: up 500 percent in Broward since 2006 and up 630 percent in Miami-Dade.
Rick Beasley, head of the publicly-funded employment agency covering Miami-Dade called South Florida Workforce, said even the flood of new dollars for the unemployed doesn’t amount to much. Weekly benefits are capped at close to $300, and accompanying poverty programs barely make up for lost wages.
“It’s not enough to pay the bills,’’ he said. “But it might be enough to keep them from losing everything.”