Miami is hot, hot, hot again. Back in the late 2000s, the tide went out in Florida with a great sucking sound. Jobs, people, and billions of dollars in investments went out to sea and down the drain when the real-estate boom went bust. Tens of thousands of speculators, large and small, lost their shirts. Miami became a city of see-through buildings, full of vacant condos nobody wanted.
Realtor Raul Santridian remembers the pain. “I was caught with over a hundred listings that didn’t sell,” he says. But now the tide has come back in, and Mr. Santridian is flush. Today he lives on the 32nd floor of an ostentatious Trump building in Sunny Isles, north of Miami Beach, where a wall of ritzy new condo buildings separates the beach and ocean from the hoi polloi on Collins Avenue. Each condo has its own army of vigilant security guards – a growth industry in Florida – to defend the residents from the rabble.
Miami is in many ways a snapshot of America today, where the wealthy are increasingly insulated from the middle-class and the poor. Yet, as voters head to the polls for next week’s midterm elections, a great apathy grips the country. People have given up on the political classes of both parties. They simply don’t believe their elected leaders are really interested in helping them – or that they would know how to do it if they were.
Florida will soon be the third-most-populous state in the union, overtaking New York. Now that the economy has picked up again, people are streaming in from all over – not just snowbirds, but job seekers from Puerto Rico and all across the South. I wanted to find out what life is like for these folks, so I spent a week talking to people down there.
I found out that a lot of them are poor, and getting relatively poorer. And I found that a lot of people in the wealthy class aren’t Americans at all. These days, Mr. Santridian’s clients are the global rich – from Brazil, Venezuela, Argentina, Russia. There are so many Russians in Sunny Isles that they have their own grocery stores stocked with Russian food. All these foreigners are eager to deposit their rubles and pesos into a third, fourth or fifth home where the government is stable, the currency is hard, the climate is great, the living is easy, and the people are beautiful.
Why is Miami so hot? “Don’t write this down,” says Mr. Santridian. “It’s the girls. The Russian girls. The Brazilian girls. The Spanish girls. Men want to be around beautiful women. And if they’re married … ” He pauses. They still want to be around beautiful women.
You’d better believe it. The poolside scene at the fashionable hotel where I’m staying (I got an Internet deal) would make your eyes pop. It’s a great place to check out the latest in rhinestone thong bikinis and six-pack abs. People sip $100 bottles of Champagne in the pool. There are partygoers of every hue and ethnicity. Many are speaking Spanish or Portuguese. The friendly servers look as if they’ve been recruited from a multicultural fashion ad.
The global elites who come here to play are attracted by the sexy vibe and the diversity. New York may have wealth and culture, but it doesn’t have heat.
The globalization of Miami means that prices have gone global too. One oceanfront penthouse has just sold for a record $35-million to a New York hedge-fund guy. (The details are confidential, but that’s what the rumour mill says.) It comes with a private 70-foot rooftop pool with views to infinity.
Also doing well is the Porsche Design Tower, a project explicitly targeted at the nouveau riche with a taste for conspicuous display. It has a separate elevator for your Porsche. No more tedious waiting for a valet to fetch your car. You just drive it into the elevator, which lifts you to your apartment. A glass-walled garage allows you to admire your car right from your own living room.
Foreign buyers now account for the vast majority of Miami’s ultraluxury condo market. This time, they are required to put real money on the table. This time, everybody tells me, the market will not collapse from overspeculation. This time, they say, the boom is for real.
But for some, there is no boom, and may never be.
What Disney hath wrought
In 1963, Walt Disney took a plane ride over the swamplands of central Florida and found what he’d been looking for – a place to build his Magic Kingdom in the east. Stealthily, he began assembling land southwest of Orlando. Today, Disney World stretches over 110 square kilometres of real estate, and draws visitors from around the globe.
Central Florida is booming, and tourism is the reason why. Orlando drew more than 59 million visitors last year – more than New York or Paris. It is now the most popular tourist destination in the world. Disney World alone employs around 70,000 people, and the Orlando-area hospitality industry employs another 150,000. The unemployment rate is under 7 per cent.
But many workers can’t live on what they make. Almost 40 per cent of the jobs in the Orlando area pay less than $25,000 a year; 18 per cent of the population lives below the poverty line, including thousands of people who work for Disney.
“Ironic, isn’t it?” says Dave Krepcho, who runs the local food bank. “There’s a lot of poverty in the shadow of Cinderella’s castle.”
Although not many tourists visit Orlando’s food bank, it is as impressive as anything you’ll see at Disney. Second Harvest Food Bank of Central Florida may well be the biggest and most technologically advanced facility of its kind in the world – a vast, 100,000-square-foot complex with state-of-the-art inventory systems and cavernous storage warehouses that are four or five storeys high. Stacks of rice, bananas, mangoes, lettuce, frozen pizzas, turkeys, Kleenex, strawberries, corn, eggs, and canned goods rise to the ceiling; 4,500 kilograms of potatoes are stored in a corner of the cool room. The wholesale value of the food distributed through here every year is $80-million. The food is channelled through 500 local charities and feeding programs. Much of it goes to feed the families of the working poor – people who can afford food or rent, but not both.
“Twenty-five per cent of kids in central Florida are ‘food insecure,’” Mr. Krepcho tells me. “Where the theme parks are, it’s one in three.” Many Disney workers live in cheap motel rooms because they can’t afford the first and last month’s rent on an apartment. Others live in trailer parks.
Among the food bank’s biggest supporters is – you guessed it – Disney. Employees from Disney’s creative team (they’re known as Imagineers) volunteered their time to construct marvellous Disney-themed murals on the walls. Disney hotels and restaurants donate millions of dollars’ worth of surplus food. Disney is careful to cultivate its reputation as a good corporate citizen.
Kathy DeCroix started with Disney when she was 21. She’s 46 now, and has spent all but six years of her working life with the company. She makes $12.52 an hour, and lives in a 35-foot motorhome in a trailer park.
“I’m probably better off than lots of our cast members,” she told me. (Disney employees are known as “cast members.”) “I got almost a $2 raise when I started working transportation.”
Ms. DeCroix is Walt Disney’s No. 1 fan, and she knows Disney World inside out. She has worked the turnstiles and driven the steam train and guided the safari expedition. Once, she even got to play a bank robber. Today she drives a bus, shuttling families back and forth between the hotels and the theme parks.
She also has lived in the trailer park for five years. She inherited the motorhome from her dad, and drives the 25 kilometres to work in a car bought with the insurance money from his death. She hopes she never has to move, because the motorhome’s engine doesn’t work any more.
For Disney World, things have never been better. Well-heeled Brazilians are pouring in on direct flights from Sao Paulo. The place is expanding like crazy, adding themes, rides, princesses, resorts, magic shows, restaurants, shopping, and cast members to keep the whole guest experience sprinkled with pixie dust. (Visitors are called “guests.”) There’s even a gated community where you can buy your very own Disney villa (starting price, $1.8-million) with carvings of Daffy Duck in the mantelpiece. Last year, Disney’s theme-park division made a profit of $2.2-billion on $14.1-billion in revenues. Not much of that trickled down to Kathy DeCroix.
Her lot rent is only $375 a month, but her paycheque doesn’t go far. After deductions for her health-care co-payment and an ancient student loan she took out in the nineties, her take-home pay is $344 a week. She’s also supporting her boyfriend, who’s looking for work.
“How do you eat?” I ask.
“Right now, I’m not doing a whole lot of that,” she replies.
Despite her troubles, Ms. DeCroix is still a passionate believer in the Disney Way. She has even worked as a trainer, showing new employees how to dress, present themselves, and live up to the ethic that Walt created. “The Disney Way means that, if you see a piece of trash, you automatically bend over and pick it up, without breaking step,” she explains. That is, it means doing everything you can to maintain the magic. Walt believed in family, and he wanted the company to be like family. The deal was that, if you took care of guests, then Disney would take care of you.
“Being a cast member used to mean something,” Ms. DeCroix says. But not any more. The problem isn’t just the lousy pay. It’s the crummy break room for the drivers, with its cramped eating quarters; and the bathroom, with its poor ventilation and resulting aroma. It’s the new generation of managers, who pass out more discipline than praise. It’s the kind of people the company is taking on these days. “It used to be that they hired people who loved Disney and wanted to be there,” she says. “Now, they hire just anybody. That’s not what Walt wanted.”
Last month, she became a union steward, and now gives the other drivers tips on how to make their jobs easier while making sure they follow the rules. She knows the unions are relatively toothless. In its latest labour settlement, Disney agreed to raise its starting wage to $10 by 2016 (it’s $8.03 right now) – a move the local media described as a major breakthrough for the workers. But Ms. DeCroix doesn’t think so; Disney is also determined to cut back pension benefits.
“I really try,” she says. “I believe in what I do. I believe in helping create the magic. I know how it’s supposed to be, and I still try to keep it that way. And it’s really hard, considering that they don’t care about me any more.”
The Larrys and the geezers
Florida is a good place to retire, but it’s not necessarily a good place to work. People are flocking here from all over in search of a better life. The newest arrivals are the Puerto Ricans, and the competition for low-wage jobs is fierce. I learned how fierce when I met a man I’ll call Larry Sampson, a 56-year-old African-American who moved down here from Chicago around 15 years ago. He had steady work as a meat cutter and a security guard; but 10 months ago, he lost his job and has been looking for another one ever since.
Mr. Sampson has applied for hundreds of jobs, and the fact he has lost all his teeth is probably not an asset in an interview. But the real problem is his age. People look at him and figure younger folks will work for less. “In my last job, I made $16 an hour,” he tells me. “Now I’d be happy to make $12, but a lot of people tell me, ‘We don’t pay $12 here. We pay $8 to $10.’” So now, if they ask on a job application about his salary expectations, he doesn’t answer.
Mr. Sampson is proud of his work experience. He liked being a security guard. He has a picture of himself, looking stern, in his uniform. But people don’t care about experience. They care only about hiring the cheapest person they can get.
In the hierarchy of American workers, he is at the very bottom of the totem pole. Median incomes for the lowest-paid workers have been plummeting for 20 years. And males of his age have the highest unemployment rate of any demographic. To put it bluntly, the Larrys of America are screwed.
“I like to work,” he says. “All my life I’ve worked.” And then he starts to cry.
Florida has a lot more going for it than do the ailing industrial rust-belt states of the north. It has sun. It has global tourism. It has global capital parked in real estate. It has no state income tax, and offers big concessions to companies, like Hertz, that want to relocate from the chilly, high-tax north. (The fact that Hertz’s chief executive already had a luxury condo in Naples, only a half-hour’s drive from the new headquarters, is a complete coincidence.)
Florida still has lots and lots of swampland just waiting to be developed. And, of course, it has seniors – wave upon wave of geezers from the north who want to spend their golden years, or at least their winters, basking in the sun. Plenty of those geezers are well-heeled. They need houses, health care, pool cleaners, lawn cutters, vodka, suntan lotion, financial services, and, ultimately, retirement homes and funerals. And the silver tsunami has barely begun.
The Gulf town of Cape Coral is just another 20 minutes north of Naples’s tasteful luxe, and a two-and-a-half hour drive across the empty swamp and scrub of central Florida from Miami’s glitz. But in reality it is oceans away from both – a lumpenbourgeoisie kind of place, where an efficiency room at the Hideaway Hotel goes for $89 a night. Cheap rental units line the canals that poke long fingers through the town. You can pick up a decent three-bedroom bungalow for $150,000, which is 60 per cent of what it was worth in in 2006 but twice what it could fetch in 2009.
I ran into a ruddy-faced retired couple in their late 60s in a busy open-air restaurant by the ocean, where they were enjoying cigarettes and a few Sunday-morning vodkas. A few years ago, they retired down here from Illinois, where they both had had government jobs. Their guaranteed pensions, I figure, probably give them an annual income of close to $100,000. They like it that there’s no state tax. If he were a young man trying to support a family today, said the husband, he’d be stressed.
I felt like saying, “No kidding. The state of Illinois is going broke because of the overly generous pensions it has agreed to pay people like you, and it’s the younger generation that will be stuck with the tab.” Like Larry Sampson, some of those young people are moving to Florida to find work, because they have no future in Illinois. But, of course, I was way too polite to say that.
Because there’s an election on, I asked them about politics.
“We’re seniors. We don’t give a shit,” he says.
“They’re all crooks,” she adds, echoing a sentiment voiced by many.
You can forgive them for being cynics – Florida state politics is a clown show that would make you laugh if it weren’t so crazily moronic. Like a lot of people in this state, they don’t care for Obama either, or Obamacare, or anything else that emanates from Washington.
The foreclosure rebound
Forty-five minutes straight inland from Cape Coral is a giant tract of land known as Lehigh Acres. This was the epicentre of the American real-estate bust, and I wanted to find out what’s happened there since.
Lehigh Acres was the original Florida swampland – thousands and thousands of acres of scrub and brush that was sold off to gullible northerners for 10 bucks per lot. But by the early 2000s it was a frenzy of construction. Thousands of cheap, shoddily built houses made with toxic Chinese drywall sprouted overnight. The banks lent money to anybody, no job or credit record required.
House prices soared, and ordinary folks began speculating like crazy. They bought more houses to flip them, or used their homes as cash machines to buy boats and cars and Caribbean cruises. Then, everything went bust. In April of 2007, Lee County, which includes Cape Coral and Lehigh Acres, had the highest foreclosure rate in the entire nation. For a while, there were a thousand foreclosures a day.
The construction business vanished, and so did jobs. The hapless, the reckless and the blameless were all swept away. Criminals moved into the abandoned houses. Thieves tore the air conditioners from vacant houses, and stole the copper wiring. “If you go out there, take a gun,” someone tells me.
It isn’t all that bad. Although some houses are still derelict or boarded up, even Lehigh Acres is coming back. Big investors bought up many of the foreclosures, rented them out for a few years, and dribbled them back on the market for a tidy profit. Experts said it would take at least a decade for the overhang to clear, but they were too pessimistic. And I found that for every loser, there’s a winner. People who couldn’t afford to buy a house before are now homeowners.
The last road in Lehigh Acres runs into a wall of scrub. The last house on that road, to my surprise, was a gracious Caribbean-style villa built of wood, with a broad, welcoming veranda. It was the nicest house in the whole place. It’s owned by a computer-systems installer who bought it for a song when the market collapsed. I asked him what had happened to all the people who lost their homes. He didn’t know.
Work, poverty and ‘positivity’
If there’s one common denominator that unites all the people I met in Florida – rich and poor, left and right, old and young – it is their deep distrust of government. Most think their politicians are bought and paid for by powerful outside interests, and they are largely right. America is sliding from democracy to oligarchy, political thinkers such as Princeton’s Martin Gilens say. “Our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts,” he writes.
In the past decade, Americans have seen their leaders massively fail in almost everything they promised to deliver. The Bushies promised nation-building and regime change, and delivered chaos. Barack Obama promised Obamacare, and he couldn’t even get that right. Americans have lost faith in the skills of government to make their lives better.
In fact, nobody in the political class has practical solutions for what ails America. Politicians cannot reverse the tide of globalization, and they can’t bring back the industrial economy. The class stratification that you see in Florida is spreading. The jet-setters at the top are increasingly detached from what goes on below them.
Yet, I believe the real problem isn’t the 0.1 per cent guzzling Champagne around the pool – or even the hard-core underclass, who have no skills, no work habits and no prospect of acquiring them. The very rich and very poor will always be with us.
The real challenge is the working poor – folks like Kathy DeCroix and Larry Sampson, whose incomes are lower, in real terms, than they were in 2000. They are the biggest losers in today’s red-in-tooth-and-claw society. If you work hard for years and still can’t make a living wage, then the social contract is broken.
For folks a little further up the ladder, life also remains precarious. In Florida, young adults are studying like crazy so that they can qualify for jobs in the booming field of health care – jobs that pay $30 or $40 an hour instead of $14. But even health care can’t soak up everyone. The Florida of the future will be increasingly segmented into a caste system of the wealthy; the folks who supply services to the wealthy (security, pool cleaning); the vast army of medical technicians who run the labs and MRI machines; and the $10-an-hour tourism and hospitality class.
Yet, even though the inequality is striking, I didn’t sense any resentment toward the rich. Kathy and Larry are not about to join the Occupy movement. Kathy does not resent the families who pack the buses to Disney World and drop more in a day than she makes in a week. She just wants them to be happy.
Above all, Americans still believe in the promise of free enterprise. You get the feeling here that everyone has something on the side – something that might help them hit the jackpot, or improve their lot or at least reinvent themselves. There’s the condo concierge who organizes jazz festivals and brings in Hispanic musicians from South America. (He gave me his card.) There’s the charming server at a fashionable restaurant, who told me he’s only a part-time waiter, because his real job is selling real estate. (He gave me his card, too.)
Even Ms. DeCroix has a sideline. She sells Tupperware. Despite her disillusion, she is incredibly big on self-improvement and “positivity.” Next year, she plans to take a course in theatre lighting so that she can get a better job. She says she’ll find the money for it somehow.
Margaret Wente is a Globe and Mail columnist