Posts Tagged ‘Average Wages’

Astronomical Job Growth in Houston, Texas

In Houston, Job Creation, Oil, Texas on October 6, 2011 at 12:57 am

We saw in 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 enjoys wages above national averages.

After we looked at metro Austin in detail, [1] today we drill into metro Houston (pardon the pun).

The Houston-Sugarland-Baytown MSA, which also includes Galveston and Brazoria Counties, had 5,946,800 residents in the 2010 Census, up 1,231,393 (26%) from 2000. [2]   Metro Houston’s  job growth of 274,510 in 2001-10 accounted for 32% of all Texas job growth. [3]  The rest of the USA actually had negative job growth during the same time frame. 

The Houston-Sugarland-Baytown MSA job growth was in the following US Bureau of Labor Statistics categories:  Business & Financial (+26,870 jobs, average wage $71,190), Sales & Related (+42,080, average wage $38,680), Food Preparation (+50,270, average wage $19,900), Healthcare Practitioners (+37,070, average wage $72,330), Healthcare Support(+21,350, average wage $), Education & Training (+35,600, average wage $51,450), Production Occupations, which includes oil refining (+22,430, average wage $28,671) and all other groupings combined (+38,840 jobs). [3]  This shows most of the job growth was in white-collar jobs. 

Houston MSA Job Growth; Source: BLS data, 2001 vs. 2010

The proverbial “burger flipper” jobs of the Food Preparation category accounted for only 18% of the total job growth, are often held by teenagers, and such growth is to be expected when the metro area had 26% population growth in the decade.  As a proportion of job force, Houston’s Food Preparation category grew from 7% to 8% of the total, which shows the off the cuff claim that “all” the job growth is in “fast food” is incorrect.  By comparison, BLS data shows the USA actually had 9%, a slightly higher percentage of jobs in the Food Preparation category, indicating Houston jobs are less fast-food dependent than jobs are nationally.

Source: 2010 BLS data,

The Houston MSA vs. USA average wages graph below is quite interesting.  It certainly discredits the claims Texas jobs are low wage.  Houston had the greatest absolute job growth of any Texas metro area, accounting for almost a third of the entire Texas total.  As you can see in the graph, Houston wages are competitive with USA averages in all categories. 

One difference shows is how Houston’s skilled professions (management, architecture & engineering, computer and mathematical and healthcare professions are all above US averages, some by wide margins.  The engineering category benefits from Houston’s concentration of well-paid engineers.  The 10,350 petroleum engineers earn a remarkable average of $135,270.  My speculation on why Managers are so well paid would be Houston’s disproportionately large concentration of corporate HQs, meaning the metro area has an unusually large proportion of highly compensated top corporate managers.

On the other hand, a few categories of workers at lower skill levels (Food Preparation, Protective Service and Healthcare Support) earn slightly less than US averages, despite the overall higher Houston wages.  This may reflect the weakness of unions in Houston vis-a-vis the nation at large.  Interestingly, we saw a very similar wage pattern in Austin with the highest skilled workers earning more than national averages and low skilled workers slightly below national averages.

Source: BLS, 2010 data

Houston’s job distribution is quite similar to US averages.   One difference is how the high-wage Architecture & Engineering category is 3.2% of Houston employment, compared to 1.8% nationally.   Another anomaly is the US Healthcare Practitioners & Support categories total 8.9% of workers, but these categories account for 7.6% of Houston workers.  The probable explanation is the younger average age of metro Houston residents meaning they are healthier and less needing of health care.

Source: BLS DataSource: 2010 BLS DataSource: 2010 BLS data


Houston has one university in the US News Top 100.  Rice University is ranked #17 [4], which puts it ahead of acclaimed universities like California-Berkeley, Michigan, NYU and Notre Dame.  Other major schools include the University of Houston and the University of Texas maintains a medical center in Houston.  Texas A&M is ranked#58 [5] and is located in College Station, TX, which is 95 miles northwest of downtown Houston.

The 29.7% of metro Houston residents with a college degree matches the US average and exceeds the Texas average of 25.5%.  Interestingly, Houston’s college graduates are more likely to hold a degree in science, engineering and related fields, at 47.4% vs. 43.6% nationally. [6]

What drives the Houston economy?  Energy, both oil and natural gas.  We often hear Houston has grown the way it has “because of oil”.  While oil is extremely important to the Houston story, Houston’s success comes from more than just drilling and refining.  Oil is found in many other places, such as California, Alaska, Pennsylvania, Louisiana, and Oklahoma. 

 Today, Houston is the undisputed capital of the energy industry, but that was not always the case nor was it inevitable.  “In 1960, Houston served as home for only one of the nation’s large energy firms, ranking well behind New York City, Los Angeles and even Tulsa.  Today Houston has 16, which is more than all the other cities combined.”  [7]

ConocoPhillips Logo.svg

Many major energy and related services companies relocated to Houston.  Oil services company Schlumberger relocated its U.S. corporate HQ from New York in 2006.  The corporate HQ of Heartland Oil and Gas moved from Denver in 2007.  CITGO Petroleum switched its HQ from Tulsa to Houston in 2004.   Direct Energy, the Toronto-based electricity provider moved its U.S. head office from Stamford, CT in 2007.  When Houston-based Conoco and Oklahoma-based Phillips Petroleum merged, the new company chose Houston for its HQ.  All of these companies have research & development operations in the Houston area.  Vestas Wind Systems chose Houston for a new US R&D center. [8]  Oil services company FMC Technology relocated from Chicago in 2003. [9]  

Shell logo.svg

Major international energy companies like Shell Oil Company (HQ of the US subsidiary) and BP America moved to Houston.  Pennzoil, now owned by Shell, started in California and had relocated to Houston in the 1970s. [10] BP America relocated its headquarters and some 3,000 employees from metro Chicago in 2008.  [11]  BP again centralized more R&D and even moved jobs from its British HQ in 2010. [12]  BP’s North American operations came from British Petroleum’s purchase of California-based ARCO, Chicago-based AMOCO and Cleveland-based Standard Oil of Ohio. 

Why Houston?  It is not just oil –  presumably, other factors must have made Texas favorable for energy companies.  These factors most likely include low costs of doing business, low taxes, infrastructure, and an educated workforce for the various R&D and corporate HQ staffs.  Eventually Houston attracted enough energy companies to enjoy the benefits of industry concentration. 

Metro Houston has 10,380 petroleum engineers (37% of the entire USA total) with an average wage of $135,270 (higher than the US average $127,970).  There are 9,730 oil and gas derrick, rotary drill & service unit operators (13% of USA total) and they work at slightly above average US wages.  Sixteen percent of the nation’s petroleum pump operators work in Houston at an average wage of $58,540. [3]  If you were a new entrant into the energy business today, your company would probably be very attracted to Houston because the concentration of other energy companies there means a deep talent pool of industry workers.  Houston’s economy includes upstream energy processing such as refineries and chemical companies.

This concentration effect has occurred in other places, such as Detroit with the emerging automotive industry in the 1910s and more recently, Silicon Valley for technology start-ups.   The energy concentration is both an advantage and potential disadvantage for Houston.  Houston has developed some major non-energy businesses, including large computer maker Compaq, which was acquired by HP but still employs 9,000 in Houston (see chart below).  Waste Management relocated from Chicago in 1998 but Houston lost the Continental HQ to Chicago when the airline was acquired by United Airlines in 2011.

Waste Management Logo.svg

How much of the Houston economy is related to energy?  The answer is about half.  The non-energy proportion of the Houston economy decreased from 52.2% in 2001 to 50.3% in 2010 as oil prices surged and companies like BP and CITGO relocated to Houston.  Both figures are better than 1996’s  44.5%. [13]

The Houston MSA area is 38% Latino, 16% Black and 7% Asian [14], compared to the US average of 16% Latino, 13% Black, and 5% Asian. [15]  Thus, non-Hispanic whites are a minority in metro Houston and the city has a much larger minority population than the US average.  Given the lower average educational and income attainment of racial minority groups, it is quite impressive metro Houston is above the US average in income and at the US average for percentage of residents with a college degree.

Summing up, I find the 2001-10 job growth in Houston to be very impressive, especially when compared to the negative job growth in the rest of the USA in the same 2001-10 timeframe.  The data prove Houston’s wages are above US averages, though there is a skewed effect of the highest skilled workers earning a significant premium to highly skilled workers elsewhere, which presumably reflects the concentration of corporate executives and highly skilled engineers.  On the other end of the spectrum, some low skill worker classifications are slightly below the US averages, quite likely the result of the lack of unions in metro Houston.  The Houston distribution of jobs by type quite closely mirrors that of the US at large, with the largest differences in healthcare as the young Houston population is healthier and in engineering, where Houston is almost twice the national average.   
The job growth was across-the-board and not disproportionately in low-wage categories.  In fact, the majority of the job growth was in white collar areas; we even saw how a smaller proportion of Houston workers are in Food Preparation than is the case nationwide.  Houston has an unusually large minority population, which includes an estimated 150,000 or more former residents of New Orleans who were displaced by Hurricane Katrina.  Above all, Houston has a large Hispanic/Tejano population.  Given the lower average wages of racial minorities nationwide, the higher than average wages in Houston show the metro area has done well by most of its residents, including the 54% of the metro area’s population that is Black or Hispanic.
Houston is concentrated in the oil industry.  Its success cannot be solely attributed to higher oil prices as nearly the entire American energy industry has slowly but surely been relocating its HQs and R&D groups to Houston.  Higher oil prices had nothing to do with major oil companies leaving Chicago, California, New York, Denver and Oklahoma for Houston.  The open questions on Houston’s future job growth are how well the city will perform if oil and gas prices decline, how much more will it diversify into other non-energy industries, and to what extent will alternative industry players locate in Houston (like Vestas Wind’s R&D group)?  These answers will help determine if Houston continues its astronomical job growth in future decades.
We finish with the chart below, showing the largest employers in metro Houston.  The biggest for-profit employers are primarily energy companies like ExxonMobil, Shell, National Oilwell Varco, Chevron, BP, KBR, Baker Hughes, Anadarko and Halliburton but the list also including major non-energy firms UnitedContinental, Kroger, HP (formerly Compaq), and ARAMARK.  Large non-energy firms on the list and headquartered in Houston include Sysco, BMC Software, restaurant chain owner Pappas and Service Corp., the largest operator of funeral homes.
Sysco late 2008 logo.png
  Metro Houston Employers With More Than 1,000 Employees
1 Houston Independent School District            25,514
2 City of Houston            21,588
3 Memorial Hermann Healthcare System            19,500
4 University of Texas M.D. Anderson Cancer Center            18,599
5 United Continental Holdings            16,000
6 Harris County            14,983
7 The Methodist Hospital System            13,000
8 ExxonMobil            13,000
9 Shell Oil Company            13,000
10 Kroger Company            12,000
11 National Oilwell Varco            10,000
12 The Methodist Hospital*              9,991
13 UTMB-Glaveston Health              9,318
14 Baylor College of Medicine              9,232
15 HP              9,000
16 Cypress-Fairbanks Independent School District              8,917
17 ARAMARK Corp.              8,500
18 Houston Community College              8,098
19 Chevron              8,000
20 Pappas Restaurants              8,000
21 HCA, Inc.              7,855
22 Pasadena ISD              7,447
23 BP America, Inc.              7,387
24 Macy’s              7,000
25 Baker Hughes              7,000
26 AT&T              6,900
27 Katy ISD              6,556
28 Aldine ISD              6,540
29 ExxonMobil Chemical-Baytown              6,500
30 Fort Bend ISD              6,319
31 Dow Chemical              6,100
32 St. Luke’s Episcopal Health System              6,000
33 Texas Childrens Hospital              6,000
34 H-E-B              6,000
35 Halliburton              5,748
36 EPCO, Inc              5,700
36 University of Houston              5,542
37 Fiesta Mart              5,500
38 KBR              5,089
39 LyondellBasell Industries              5,080
40 CenterPoint Energy              5,000
41 Spring Branch Independent School District              4,842
42 UTHealth              4,690
43 ConocoPhillips              4,000
44 Bank of America              3,100
45 Comcast Cable Communications, Inc.              2,700
46 Rice University              2,600
47 Wells Fargo              2,471
48 Amegy Bank              2,215
49 Anadarko Petroleum              2,200
50 El Paso Corporation              2,200
51 Sysco Corporation              1,800
52 Deloitte              1,500
53 The Boeing Company              1,500
54 CITGO Petroleum Corporation              1,367
55 Service Corporation International              1,300
56 Houston Chronicle              1,295
57 BMC Software, Inc.              1,100
58 City of Pasadena              1,088
59 PWC              1,050
60 San Jacinto College District              1,026
61 Oceaneering International, Inc.              1,005
62 Ernst & Young LLP              1,000
63 Accenture              1,000

Chart by author, sources: and and  This list may not be fully exhaustive, especially of non-public companies.



[2], retrieved 9/29/11.

[3] Houston-Sugarland-Baytown, Brazoria, Galveston-Texas City MSA/PMSA employment and mean wage data retrieved for Total and Occupational categories in 2001 and 2010 from BLS data (2010) and (2001)




[7] pg. 61 of


[9] and 

[10], retrieved 9/29/11..

[11] and




[15], retrieved 9/10/11.

Additional background data on Houston comes from

Pictures from Wikipedia Commons.

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  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. 
 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.


[1], 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  and

[3] 2008 Census Bureau data in, retrieved 9/10/11.

[4] 2007 Census Bureau data in, retrieved 9/10/11.

[5], retrieved 9/10/11.

[6] retrieved 9/9/11.

[7] retrieved 9/9/11.

[8] data retrieved 9/9/11.

Pictures from Wikipedia Commons.