State of Human Capital in AustinGrowth, Prosperity, and Inequality

Brian KelseyCivic Analytics LLC

7600 Burnet Road, Suite 108Austin, TX 78757

866-512-3835brian@civicanalytics.comhttp://civicanalytics.com

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• 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

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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%

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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%

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7%

8%

9%

Austin MSA

U.S.

Jan‘09

Feb‘10

July ‘01

Dec‘03

Jan1991

Aug2014

Job Growth, 12-month rolling (SA)AUS U.S.

2010-13 12% 5%

2000s 13% -1%

1990s 63% 18%

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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%

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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.

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

2000-13RankMSA

Total PopGrowth

2000-13RankMSA

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 225,000people 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

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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

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120

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% 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).

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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

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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+ $93,768SC/Associate’s $57,912HS Diploma $47,976No HS Diploma $38,880

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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 $73,584White Alone $59,832Hispanic $40,452Black 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

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Average Annual Earnings Per WorkerAge 25+ (2013 dollars)

White

Black

HispanicBachelor’s+ ATX U.S.

Asian 67% 50%

White 49% 32%

Black 23% 18%

Hispanic 17% 13%

Asian

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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)

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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?

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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/.

7600 Burnet Road, Suite 108Austin, Texas 78757

@civicanalyticshttp://civicanalytics.com