My latest talking points about growth in Austin in preparation for a Leadership Austin panel tomorrow:
“List-topping” economic performance
The Austin metro area (MSA) economy grew by 47% between 2001 and 2012, second only to Houston among large metro areas (GDP > $50 billion).
The Austin MSA ranked #1 in job growth (23%) among large metros of 500,000+ population between 2001 and 2012.
People move to strong economies
The Austin MSA is adding about 60,000 residents per year, fueled by people moving here because of the strong economy. Travis County gained (net move in move out) about 5,900 people per year from other states between 2000 and 2010, including 1,600 per year from California. While California gets the most attention, most people moving to Austin come from other parts of Texas. Harris County (Houston) was the largest “donor” county to Travis County at 588 people per year, far outpacing places like Los Angeles.
Austin is getting much wealthier
In 2000, 14% of households in Austin (city) had incomes of at least $100,000. In 2012, it was up to 24%. In 2000, households with incomes of less than $15,000 outnumbered households with incomes of $100,000 or more. In 2012, $100,000+ households outnumbered < $15,000 households by almost two to one. This is a remarkable shift in the city’s demographics in a very short amount of time and can go a long way toward explaining why housing is so expensive, especially in centrally located neighborhoods.
But not everybody is sharing in Austin’s growing prosperity
Per capita income in Travis County relative to the US was 105.88 in 2012 (i.e. US=100), down from 2011 and roughly back to where we were relative to the US in 1997.
A family of one adult and one child (there are approximately 55,000 single-parent households in Austin) needs at least $3,390 in pre-tax monthly income to meet basic needs in Austin, according to MIT’s Living Wage Calculator. Average monthly earnings for African American workers in Austin are $3,371 and for Hispanic/Latino workers are $3,272. By contrast: Asians $5,850, Whites $5,387.
48% of annual job growth recently in the Austin MSA has been in occupations that pay, on average, at least $19 per hour, but 72% of those jobs require completed postsecondary education. 23% of African Americans and 23% of Hispanics/Latinos in Austin have a completed associate’s degree or better. By contrast: Asians 75%, Whites 65%.
Building more housing units in the city of Austin and expanding the public transportation network in order to lower the commuting costs for households between the urban core and the rest of the metro area will certainly help. But I’m skeptical that we can “build our way” to greater affordability in Austin, especially without an equally ambitious strategy for human capital development–i.e. investing in people so they can afford to live and raise families here. That means investing in new models of education (and especially CTE), workforce training, and, perhaps, a new, more informed conversation about the minimum wage.
The city’s (and region’s) economic development professionals have made enormous progress diversifying the local economy and getting Austin up to the top of all the “best of” lists. And we clearly understand the link between human capital development and economic development. Indeed, look around at other regions in the US and you won’t find many chambers of commerce investing $1.5 million in education initiatives.
But it’s time for Austin to start asking what’s next. Change usually happens when (a) things get bad enough to force the issue (think Detroit or Northeast Ohio) or (b) things are good enough to lower the price of failure and get people more comfortable with risk. Austin has never been in a better position to take some risks. You can see it in recent conversations about urban rail, the excitement around F1, and development of downtown. Austin may not always be at the top of all those “best of” lists so the time for big ideas is now. The window is open.
Here are two suggestions:
1. Make Austin the first city in the US to eliminate working poverty
2. End veteran homelessness (like Salt Lake City)
In addition, now that we are all investors in the Dell Medical School, offer ideas for how to leverage that once-in-a-generation project to showcase how economic development can be made more inclusive. Think creatively about how innovation and cluster-based economic development can address issues of equity.
State Senator Kirk Watson has described Austin as the home of big ideas. Time to ante up.