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State of Human Capital in Austin

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Brian Kelsey's take on growth, prosperity, and inequality in the Austin, Texas economy in 2015.

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State of Human Capital in Austin

  1. 1. State of Human Capital in Austin Growth, Prosperity, and Inequality Brian Kelsey Civic Analytics LLC 7600 Burnet Road, Suite 108 Austin, TX 78757 866-512-3835 brian@civicanalytics.com http://civicanalytics.com
  2. 2. 2 • Population change (nom) #10 • Population growth (%) #2 • Job change (nom) #7 • Job growth (%) #1 • GDP change (nom) #21 • GDP growth (%) #3 Source: U.S. Census Bureau, Population Estimates. U.S. Bureau of Labor Statistics, Current Employment Statistics. U.S. Bureau of Economic Analysis. Jobs are from 2000 to 2013. GDP is from 2001 to 2013 (2000 not available). Growth rankings (%) are among large MSAs. For more on the Austin economy & U.S. economic development trends visit Insights at CivicAnalytics.com. Austin’s Economic Development “Scorecard”: Rank among large US metros since 2000
  3. 3. 3 Austin economy has grown at average pace nearly twice what’s considered a good year Source: U.S. Bureau of Economic Analysis. Data is for Austin-Round Rock MSA. Not adjusted for inflation. 1.2% 5.6% 9.0% 8.8% 10.0% 4.1% 6.4% -1.8% 7.2% 5.9% 7.8% 3.8% -4% -2% 0% 2% 4% 6% 8% 10% 12% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Austin MSA U.S. % Change in GDP (Nominal) Average (2002-13) Austin MSA 5.7% U.S. 3.9%
  4. 4. 4 Dot-com lessons learned: Austin shrugged off 2008-2009 recession compared to 2000-01 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics. Data is for Austin-Round Rock MSA. Seasonally adjusted. -6% -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Austin MSA U.S. Jan ‘09 Feb ‘10 July ‘01 Dec ‘03 Jan 1991 Aug 2014 Job Growth, 12-month rolling (SA) AUS U.S. 2010-13 12% 5% 2000s 13% -1% 1990s 63% 18%
  5. 5. 5 Population growth has been Austin’s great economic stabilizer during US recessions Source: U.S. Census Bureau, Population Estimates. Data is for Austin-Round Rock MSA. U.S. MSA is all metropolitan areas. 0% 1% 2% 3% 4% 5% 6% 7% 8% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Austin MSA U.S. (MSA) Population Growth, 1970-2013 Austin MSA lost jobs Population growth in Austin moderated a bit in 2013 compared to recent years, but still far outpaced the national rate of growth. Austin’s population grew by 2.7% in 2013, down from 3.0% in 2012.
  6. 6. 6Source: U.S. Census Bureau, American Community Survey table B15002 and Census 2000 SF3 table P37. Wage data is from U.S. Census Bureau, Quarterly Workforce Indicators, 2013Q4 (latest available as of 02/09/15). Bach Degree+ Pop Growth 2000-13 Rank MSA Total Pop Growth 2000-13 Rank MSA Charlotte 102% 1 35% 5 Grand Rapids 93% 2 9% 33 Las Vegas 91% 3 45% 3 Austin 80% 4 49% 2 Raleigh 79% 5 51% 1 Riverside 74% 6 34% 8 Nashville 72% 7 27% 12 Orlando 66% 8 37% 4 San Antonio 66% 9 32% 9 Phoenix 63% 10 34% 6 Austin is winning the “war for talent” and to the victor go the (higher earnings) spoils Austin MSA has added 225,000 people with bachelor’s degree or higher since 2000 (~17K per year). Average annual earnings per worker (age 25+) w/ a bachelor’s degree or higher in Austin MSA are $93,768. Hires (New): $61,416
  7. 7. 7 Wage (average) growth has been flat since 2003 despite Austin’s booming economy Source: U.S. Bureau of Economic Analysis. Home price data from Mark Sprague at Independence Title. 60 70 80 90 100 110 120 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 % US Metropolitan Portion (US MSA = 100) Per Capita Income Average Wage Per Job Average wage per job in Austin MSA in 2003 was $51,112 (2013 dollars), compared to $51,943 in 2013, an average annual increase of only 0.16%. Meanwhile, average home price in Austin (citywide) was up 45% in nominal terms and 15% in real terms ($2013).
  8. 8. 8 Wage inequality has always existed but 1990s created a “new normal” for Austin economy Source: U.S. Census Bureau, Quarterly Workforce Indicators. Earnings data in chart is for Q1 in each year and adjusted for inflation (2013 dollars). Earnings data in text is 2013Q4 (latest available as of 02/09/15). $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Some College or Associate’s HS Diploma No HS Diploma Average Annual Earnings Per Worker Age 25+ (2013 dollars) Bachelor’s+ In 1996, average earnings per worker w/ bachelor’s or higher in Austin MSA were 66% higher than a worker w/ HS diploma (age 25+). Today, they’re 97% higher. Bachelor’s+ $93,768 SC/Associate’s $57,912 HS Diploma $47,976 No HS Diploma $38,880
  9. 9. 9 Wage inequality by race/ethnicity has widened considerably due to education inequality Source: U.S. Census Bureau, Quarterly Workforce Indicators. Earnings data in chart is for Q1 in each year and adjusted for inflation (2013 dollars). Earnings data in text is 2013Q4 (latest available as of 02/09/15). Educational attainment data in table is from U.S. Census Bureau, 2012 American Community Survey, Five-Year Estimates, Table C15002. Asian Alone $73,584 White Alone $59,832 Hispanic $40,452 Black Alone $39,672 Wage gap between highest & lowest average earnings by race/ethnicity in Austin has doubled since 1996. $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Annual Earnings Per Worker Age 25+ (2013 dollars) White Black Hispanic Bachelor’s+ ATX U.S. Asian 67% 50% White 49% 32% Black 23% 18% Hispanic 17% 13% Asian
  10. 10. 10 Many early career workers are struggling to keep pace w/ rising cost of living in Austin Source: U.S. Census Bureau, Quarterly Workforce Indicators. Earnings data in chart is for Q1 in each year and adjusted for inflation (2013 dollars). Average earnings for early career workers (age 25-34) have recovered much more slowly than age 35+ since 2008-2009 recession. In fact, average earnings per worker age 25-34 were lower in 2013 than they were ten years earlier in real terms. -7.5% -5.0% -2.5% 0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% Change in Average Annual Earnings Per Worker Age 25-34 (2013 dollars)
  11. 11. 11 What do we make of all this? For more on the Austin economy & U.S. economic development trends visit Insights at CivicAnalytics.com. • Austin is adding bachelor’s+ people at much faster pace than jobs are being created for them—what is the ripple effect on the labor market? • The Human Capital cuts both ways—is Austin’s success attracting & retaining skilled workers undermining need for sense of urgency & more investment in human capital development?
  12. 12. 12 What do we make of all this? For more on the Austin economy & U.S. economic development trends visit Insights at CivicAnalytics.com. • Austin is among US leaders in growth of middle-wage jobs ($13.84-$21.13 per hour)* despite popular narrative suggesting otherwise—why? • What is the proper role for economic development policy in addressing the inequality fueling #ATX4All—what, if anything, can a city/region do? *Middle-wage range identified by National Employment Law Project. For more information and examples of calculations see EMSI article: http://www.economicmodeling.com/2013/10/03/middle-skill-jobs-that-have-survived-and-the-states-that-are-fostering-them/.
  13. 13. 7600 Burnet Road, Suite 108 Austin, Texas 78757 @civicanalytics http://civicanalytics.com

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