Paradise lost? Miami, immigration and economic development.

• Author: Buss, Terry F.
• Position: Miami, Florida

Abstract

For some, Miami has become a prototypical global city, driven by immigrant entrepreneurs and serving as an economic development model for other places. Immigrants, beginning with exiled Cubans in the 1960s, followed by successive waves of talented people from Latin America, turned this sleepy tourist destination into the Gateway to the Americas, quite literally. Ironically, those factors--location, immigration, culture, and finance--that made Miami grow and develop also have a severe downside. Miami is the poorest city in America, with one-third of its population living in poverty, and has been so for three decades. Miami is a global player in the illicit drug trade, a capital for money laundering and criminal activity of all kinds. Miami is a place steeped in racial, ethnic and cultural tensions. Miami teaches us that culture, ethnicity and race are important factors in the economic development of cities for the new millennium, factors not yet fully understood or appreciated.

INTRODUCTION

Miami is a place of conflicting impressions about its economic development--Paradise gained, or Paradise lost? Some observers refer to Miami as the Gateway to the Americas, the new capitol of Latin America, a Global City, or the new Havana, held up by many as a model of how immigrant entrepreneurs turned a sleepy, vacation-destination city into an economic power. The implication: other under- or less-developed cities might do the same. Others are not so charitable, viewing Miami as a banana republic, the Cuban-American Republic, or a Latin colony. To them, Miami represents the importation of some of the worse features of Latin American economic development and politics, not to mention poverty. No one who knows Miami well seems neutral in their perceptions. We believe that the truth lies somewhere between these two extremes. Because Miami attracts a lot of attention from those interested in promoting the global economy, it is important to unravel what's going on so that others might learn from the experience.

Economic development in Miami, however perceived, arises from the confluence of five factors, all in one way or another associated with cultural change, global economics, and geographical location:

* Development of Cuban exile culture over the past forty years and its relationship to:

* Influx of newly-arrived immigrants from economically distressed or war-torn Latin American and Caribbean countries;

* Circumstances of non-Hispanic Americans, especially African Americans.

* Influence of laundered drug money from Latin America; and

* Attraction of flight capital from, economic growth in, and burgeoning trade with Latin America and the Caribbean.

This article discusses the contribution of each factor to Miami's economic development.

BACKGROUND

Before turning to economic development issues, we provide an overview of Miami's geography, immigrant population, and local economy.

Geography

Miami is an elongated urban area--Miami-Dade County--sprinkled with municipalities of differing size, including: the cities of Miami, North Miami, Hialeah, Coral Gables, Kendall and Homestead, as well as a necklace of cities along the beach, among them Miami Beach, Bal Harbor, Surfside, Sunny Isles, Golden Beach, and Aventura. Miami is bounded on the west by Everglades National Park and associated wetlands. Not surprisingly, environmentally protected areas on the west and ocean on the east reduce the amount of land for development that in turn drives up the value of scare real estate along the Atlantic coast.

Immigrant Populations

Miami is a city of immigrants, even more so than cities in the U.S. West and Southwest, and even New York (Suro & Singer, 2002). Miami's population numbered 2,253,362, according to the 2000 Census (see Table 1). Some 57.3%, or 1,275,029 people, reported their ethnicity as Hispanic or Latino (we use the term, Hispanic, hereafter). About one-fifth--457,214 people--are non-Hispanic Blacks or African Americans. Miami's population is dominated by Cubans, 667,150, about 30% of the population overall, and 52.3% of the Hispanic population. Miami City, with a population of 362,470, is 65.8% Hispanic; while Hialeah boasts 226,419 people, 90.3% Hispanic.

Miami's Hispanic population is diverse. Some 16.7% are South Americans, 14.2% Central Americans, 5.4% Puerto Ricans, and 4.0% Mexicans. A few countries contribute most to the Hispanic population: Colombians account for 8.2%, 104,058 people, and Nicaraguans for 8.0%, 101,743 people. Other countries are represented by substantial numbers as well: Hondurans, 34,679, Venezuelans, 32,456, Argentineans, 20,348, Ecuadorians, 19,938, Peruvians, 18,579, Guatemalans, 14,470, Salvadorans, 14,947, and Chileans, 11,841.

One-half--1,124,100 people--of Miamians are foreign born. Many are recent arrivals: 39.1%, 439,052 people, immigrating between 1990 and 2000, 26.9%, 302,795, between 1980 and 1989, and the remaining 34.0%, 382,253, before 1980.

There are no reliable estimates of Miami's illegal alien population, but illegals greatly inflate numbers of immigrants there. The Immigration and Naturalization Service estimates that there are 350,000 in Florida. One can assume that the lion's share resides in South Florida. Around 3,000 illegal aliens are expelled from Miami annually and about 1,300 leave voluntarily.

Miami's Hispanic population grew 123% from 1980 to 2000. Much of this growth occurred outside the City of Miami. Signaling a substantial population shift away from the central city. The metropolitan area grew 36% and the suburbs 45% from 1990 to 2000. But the central city grew only 7%.

Local Economy

Even though Miami is known for tourism, the economy is somewhat diversified. According to the latest economic census, there are around 75,600 paid employees work in the accommodation and food service industry. There are 635 hotels, 117 motels, and 390 other accommodations for tourists. There are 3,422 restaurants and drinking places. In addition to the usual concentrations of employment in retail wholesale, health care and services, Miami has a vibrant manufacturing sector. There are 638 textile/apparel-related manufacturers employing 18, 000 workers. Somewhat surprisingly, there are 127 computer and electronic manufacturers, employing 6,250 workers. Because of the large number of people, owning but not living permanently in Miami, there are numerous--3,378 establishments, employing 19,800 workers--in the rental/lease industry.

Two Fortune 500 companies are headquartered in Miami: Lennar, ranked 298 with $6 billion in sales, and Ryder Systems, ranked 341 at $5 billion in sales. A great many Fortune 1,000 companies have branch offices in Miami to serve Latin American and Caribbean interests.

Miami competes in the global economy. Miami ranked ninth in export sales among the Nation's 253 metropolitan areas according to the International Trade Administration. Some 31.9% of exports go to the Caribbean and Central America and 46.2% to South America. Brazil alone receives 15% of Miami's exports.

Miami International Airport processes 16.2 million passengers from international destinations annually, just behind New York Kennedy and Los Angeles International airports (see Table 2). Miami's airport moves 1.43 million tons of cargo annually, making it the first ranked airport nationally.

Miami is also a major seaport in the global economy according to data from the Port of Miami. Miami is ranked first among ports in the tourist industry. Eighteen cruise ships are home-based in Miami. One of every three--3.4 million--cruise ship passengers sails from Miami. Most tourist destinations are to the Caribbean or Latin America. Miami is also a world-class cargo port. Forty shipping lines are home-based there. Two-thirds of the port's total volume--8.2 million tons--represented imports to or exports from the Caribbean or Latin America, even so, Hong Kong, Italy and Spain, represented Miami's fifth, sixth and seventh largest trading partners by volume, respectively.

The global economy is also reflected in the presence of foreign owned banks (see Table 3). Only New York, Los Angeles and Chicago have a greater presence. Foreign banks hold nearly $22 billion in domestic assets. The two countries with the largest banking presence in Miami are the United Kingdom and Spain. This is likely because of the large number of British tourists with interests in the local economy. Spain is prominent because of its ties with the Latin American economy. Most Latin American countries have a sizable banking presence in Miami because of the volume of trade they facilitate, and possibly to manage the accounts of the growing number of immigrants from that region.

MIAMI'S CUBAN CULTURE

Cuban immigration, so important to understanding economic development, has two components: waves of exodus from Cuba and a distinctive Cuban exile culture.

Cuban Immigration

Cuban presence in America occurred in three waves. The first mass emigration resulted from the aftermath of Fidel Castro's successful Communist Revolution against the right wing dictatorial government of Batista in 1959. Cubans not in favor with the new regime fled the country to Miami en mass as political exiles. From mid-1959 through October 1960, 37,000 refugees came to Miami. After the unsuccessful American-backed Bay of Pigs invasion in 1961 through 1962, 200,000 more refugees arrived in Miami.

A few Cuban exiles secreted away their wealth, some already held investments in the United States, but most brought only skills, experience and connections to their new home. Exiles were primarily families of wealthier entrepreneurs, business managers, and educated families (Portes & Bach, 1985).

Unlike other Hispanic migrants who located across the United States, Cubans journeyed nearly exclusively to Miami. Why Miami? Miami had only a modest Hispanic presence before the exodus, so it was not especially a magnet for Cubans. But many Cubans had...