econscius

Stellar Job Growth in High Wage Austin, Texas

In Austin, Job Creation, Rick Perry, Texas on September 11, 2011 at 1:19 am
 
The majority (509,560, or 59%) of the 860,740 net new jobs created in Texas in 2001-10 occurred in three metropolitan areas, each of which has average wages above the US average (see https://econscius.wordpress.com/2011/09/03/stellar-texas-job-growth-in-above-average-wage-cities/).  We will look closely at each of these three metropolitan areas, Houston, Austin and Dallas.  
 
We start with the Texas state capital of Austin.  The Austin MSA had 1,716,291 residents in the 2010 Census, up 466,528 (37%) from 2000. [1]   Metro Austin’s  job growth of 101,510 in 2001-10 accounted for 12% of all Texas job growth.  Note the USA actually had negative job growth during the same time frame. 
 
816Congress-Aug2009.JPG
 
 The Austin job growth was in the following US Bureau of Labor Statistics categories:  Computer & Mathematical (+11,950 jobs, average wage $82,960), Office & Administrative (+12,370, average wage $35,200), Education & Training (+16,580, average wage $54,970), Sales & Related (+15,750, average wage $38,240), Food Preparation (+22,740, average wage $19,870), and all other groupings combined (+22,120 jobs). [2] This shows most of the job growth was in white-collar jobs.  Note the proverbial “burger flipper” jobs of the Food Preparation category accounted for only 23% of the total job growth, are often held by teenagers, and such growth is to be expected when the metro area had 37% population growth in the decade.
 
Austin is one of nation’s best educated metro areas as 38.2% of Austin adults hold a college degree vs. 27.7% national average. [3]
 
The Austin area is 30% Latino, 8% Black and 5% Asian [4], compared to the US average of 16% Latino, 13% Black, and 5% Asian. [5] Thus, Austin has a larger minority population than the US average.  Given the lower average educational and income attainment of racial minority groups, the fact Austin is above US averages in both education and income attainment stands out.
 
The graphs below show Austin’s job distribution is similar to US average but slightly more white-collar, being particularly strong in Computer and Mathematical jobs (Austin 6 % vs USA 3 %). 

Occupation Distribution, Austin vs. US Average, May 2010 BLS data

Occupation Code Austin Jobs, 2010 USA Jobs, 2010
Computer and Mathematical 6% 3%
Office and Administrative Support 18% 17%
Architecture and Engineering 3% 2%
Management 5% 5%
Sales and Related 11% 11%
Business and Financial Operations 5% 5%
Education, Training, and Library 7% 7%
Healthcare Practitioners and Technical 4% 6%
Installation, Maintenance, and Repair 3% 4%
Construction and Extraction 4% 4%
Food Preparation and Serving Related 9% 9%
Production 4% 6%
Transportation and Material Moving 4% 7%
All Other 16% 16%

Average Wages by Occupation, Austin vs. US Average, May 2010 BLS data

The wage graph is interesting.  Austin’s average wage of $46,130 is higher than US average of $44,410, but Austin wages are below US averages for less skilled work (food preparation, transportation, production, construction).  This might be due to the lack of unions in Texas.  On the other hand, skilled white-collar work (education, business, finance, computers and office support) are above US averages.  The higher Austin white-collar wages must reflect high worker productivity, which is not surprising given the highly educated workforce and presence of top technology companies in the Austin area.

Austin has a knowledge-based economy.  In addition to state employees, the University of Texas at Austin (“UT”) is an important employer.  Though some like to say Texas education is ‘bad’, the Longhorns rank as the #45 university in the USA, according to US News. [6]   UT’s ranking is more impressive given that most of the top ranked universities are private (e.g. Ivy League).   Texas-Austin is rated #13 amongst US public universities [7], tied at #13 with Univ. of Wisconsin-Madison and just ahead of my undergraduate alma mater, University of Illinois, #15. 

There is an important point here, too.  Some will downplay the Austin job growth by saying the city is the home of a state capitol and flagship university, therefore, the job growth is unimpressive.  However, the similarly ranked University of Wisconsin sits in Madison, which is also a state capitol.  Likewise Ohio State University stands in state capitol Columbus.  Madison and Columbus have held their own compared to other Midwestern cities but are not even in the ballpark of Austin population and job growth.  Champaign, home of the University of Illinois, has little growth.  In fact, the Champaign example is instructive as it shows universities are excellent employers because they are stable and ride out recessions well.  But, student populations grow very slowly, if at all, meaning the number of jobs directly tied to any university hardly changes.  What matters is a culture of entrepreneurs and venture capital driving economic growth around universities.  There is nothing automatic about economic growth in any particular city that houses an excellent university.  One of the nation’s top public universities (#4, see [3]), University of Michigan, is located in the Detroit suburb of Ann Arbor.  Despite its fantastic engineering program, Michigan has been unable to prevent the flow of jobs out of the Detroit area.

Dell logo

Michael Dell famously started Dell Computer in his University of Texas dorm room.  Dell today leads the private employers in employment in the Austin metro area.  Interestingly, Dell Computer now employs more than the University of Texas.  The Top 20 list displays Austin’s strong technology presence as literally every single non-hospital corporation on the list is in technology (Dell, IBM, Freescale Semi, Solectron, AT&T Labs, AMD and Applied Materials).  Another growth company founded and headquartered in Austin is Whole Foods.

Whole Foods Market logo.svg

Metro Austin Top 20 employers: [8]

1. State of Texas – 65,688 employees

2. Dell Computer – 14,000

3. University of Texas at Austin – 13,577

4. Austin Independent School District – 10,714

5. US Gov’t – 10,624

6. City of Austin – 10,000

7. Seton Healthcare – 7,538

8. IBM Austin Research Laboratory – 6,200

9. St. David’s Healthcare – 5,712

10. Freescale Semiconductor – 5,600

11. Internal Revenue Service – 4,728

12. Round Rock Ind. School District – 4,400

13. Travis County – 4,000

14. Austin Community College – 3,258

15. Solectron – 2,900

16. Leander Ind. School District – 2,800

17. Brackenridge Hospital/Dell Children’s Hospital – 2,537

18. Applied Materials – 2,500

19. AT&T Labs – 2,400

20. Advanced Micro Devices – 2,300

The conclusion is Austin has enjoyed stellar job growth in higher-than-average wage, white collar jobs.  As always, your comments are welcome below.

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[1] http://en.wikipedia.org/wiki/List_of_United_States_metropolitan_areas, retrieved 9/10/11.

[2] Austin-Round Rock-San Marcos MSA employment and mean wage data retrieved for total and Occupational categories in 2001 and 2010 from http://www.bls.gov/oes/2001/oes_0640.htm#otherlinks  and http://www.bls.gov/oes/current/oes_tx.htm#00-0000.

[3] 2008 Census Bureau data in http://www.austin-chamber.org/do-business/greater-austin/greater-austin-profile/population.php, retrieved 9/10/11.

[4] 2007 Census Bureau data in  http://www.austin-chamber.org/do-business/greater-austin/greater-austin-profile/population.php, retrieved 9/10/11.

[5] http://en.wikipedia.org/wiki/Demographics_of_the_United_States, retrieved 9/10/11.

[6] http://colleges.usnews.rankingsandreviews.com/best-colleges/university-of-texas-austin-3658 retrieved 9/9/11.

[7] http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities/top-public retrieved 9/9/11.

[8] http://www.austintexashomes.com/topemployers.htm data retrieved 9/9/11.

Pictures from Wikipedia Commons.

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