The tale typically told about the Austin economic boom stars a California hipster who moves to Central Texas for the live music, the quirky culture and a job with a flashy new high-tech startup.
Mandilyn Guerrero likes to call them “the ACL People,” after the music festival that draws thousands of their ilk to Zilker Park each year.
Guerrero, 23, is not one of the ACL People. She was born and raised in Austin, graduating from Del Valle High School and working her way through a succession of jobs before settling into a position with the Travis County correctional department.
Instead of toting her laptop to a slacker-filled coffee shop for a day of coding, she drops her 3-year-old son off at child care around midday and scoots downtown in hopes of finding a decent parking spot near work. Rather than close out her day with happy hour on Rainey Street, the single mother picks up her boy after 9 p.m. and heads home for a little play time before bed.
And then, finally, she can sit down and tackle her college course work.
“Once I got a taste of the workforce, I was pretty work-driven,” Guerrero said on a recent day off. “This is not the time to party. While I have my youth, I’d like to be ambitious and achieve a lot.”
Her ambition aside, Guerrero doesn’t fit the usual lore of Austin’s skyrocketing growth. Yet she and the thousands of other young Hispanics who will launch their careers in the coming decade are fast becoming a primary force in the region’s economic future. Demographic experts say this rapidly growing Hispanic population will become the largest portion of the Central Texas workforce sometime in the next 15 to 20 years.
What’s not clear is whether they will be driving the Central Texas economy or will be left behind.
As skill requirements for many careers rise ever higher, Latinos’ comparative lack of education could leave a growing share of the local workforce employed in low-wage jobs — putting a larger burden on taxpayer-funded services to alleviate the region’s high poverty rates and maintain Austin’s standard of living.
Yet emerging demographic and workforce trends suggest a much different picture, one in which Austin holds a rare opportunity to capitalize on its existing labor force and foster a more productive economy than it could ever generate by importing the workers it needs.
“If we were successful in a state like Texas with our minority populations, particularly our Hispanic population, we could have a workforce that was younger than most other parts of the country and therefore provided a competitive advantage for us in national markets and international markets,” said Steve Murdock, founding director of the Hobby Center for the Study of Texas at Rice University. “So what could be a problem could also be an advantage in a very positive way going forward.”
The ACL People have played, and will continue to play, a major role in Austin’s growth. But demographic experts estimate that Guerrero and the rest of the area’s Hispanic residents will account for 46 percent of the Central Texas population by 2040, surpassing Anglos as the region’s largest demographic group in the next 20 years or so.
Given their rapid emergence, it’s the young Hispanic workers who best illustrate how Central Texas is changing, how vital their education will be to the region’s future, and how the influx of thousands of young Latinos into the local job market creates both critical challenges and rich opportunities for the Austin economy.
“It’s a huge opportunity if we can take advantage of the booming Hispanic population,” said Susan Dawson, executive director of the E3 Alliance, a nonprofit collaboration of business and education leaders who have argued that the region’s education gaps threaten its prosperity. “If we can help them succeed, it’s a competitive advantage for our region if we can have a workforce that is much more culturally aware and much more culturally attuned to working in a global economy.”
Young and growing
Murdock, a former director of the Census Bureau, has spent the better part of the past decade explaining just how deep an impact the Hispanic population will have across Texas.
The constant challenges posed by income and wealth disparities still frame virtually any discussion of sustainable and equitable economic growth, he said, but the size of the Hispanic population and its cultural idiosyncrasies — language, immigration and the like — demand special attention.
“Whatever is happening socioeconomically, the reality of it is we’re going to have to be successful with Hispanics and Hispanic children,” he said. “There’s not another course of action to the long-term socioeconomic prosperity of Texas or the country.”
Even in the Austin metro area, one of the more Anglophile regions of Texas, Hispanic residents accounted for 45 percent of the overall population growth from 2000 to 2010, contributing more to the area’s expansion than any other ethnic or racial group.
According to Murdock’s analysis of census data, the number of children within Austin’s city limits jumped by 28,000 during that span. Hispanic children accounted for 92 percent of the increase; the number of Anglo children stayed essentially flat.
Given the youthful Hispanic population and the rising skill levels required for most well-paid careers, Austin’s government, education and business leaders need to make Hispanic educational attainment a top priority if they hope to tap the full potential of its future workforce, Murdock said.
“Education is the single best predictor — and has been for decades, as long as we’ve been doing it in a statistical sense — the best predictor of income,” he said. “It’s the single best thing for changing those socioeconomic disadvantages into socioeconomic advantages.”
Without a focus on education, Texas stands to see a less competitive workforce, greater income disparity and less wealth per resident. If current socioeconomic circumstances persist, Murdock and his colleagues estimate that the average Texas household will be $7,700 poorer in 2050 than it was in 2010, after adjusting for inflation. The state’s average poverty rate would increase by about 3 percentage points.
‘No such thing as Spanish calculus’
A skilled workforce has long been one of Austin’s key economic advantages. But if education inequality embeds itself deeper into the local workforce, employers will have to increasingly look outside Central Texas for the qualified workers they need, said Barbara Johnson, executive director of the Austin Area Research Organization.
“Our region has people who, with the right education, can fill those jobs and do better for their families,” she said. “It seems like a real opportunity for us to do better for the people who live here and for them to do better for themselves.”
In Central Texas — where the median income for Anglo residents is 57 percent higher than for Hispanic residents — Austin Community College serves as one of the primary forces behind efforts to train a more qualified workforce. Last fall, 28 percent of the 43,315 students enrolled in its degree and certificate programs were Hispanic, said Richard Rhodes, its president and CEO.
The school works extensively with local churches, community centers and public schools to get Hispanic students into and through programs that provide the skills local employers demand, Rhodes said.
“It’s important to give people skill sets, applicable skill sets, so they can get a job and start earning money,” he said.
And while making education more familiar and welcoming to Hispanic students helps them progress, said Richard Armenta, ACC’s associate vice president of student success, they ultimately need to learn the same skills as anyone.
“There’s no such thing as Spanish calculus,” Armenta said. “Calculus is calculus. These students, they’re going to have to learn the skills.”
Guerrero is getting those skills at ACC, taking the last three courses she needs to complete an associate degree in law enforcement. Like many students, she struggled at college, moving in and out of school as she dealt with academic challenges, a car wreck and the birth of her son. Unlike many ACC students, though, she’s now on the cusp of her degree.
“After I had my son, and it sounds sort of cliché, but I basically found my motivation,” she said. “I wasn’t doing it for me anymore; I was doing it for him, so it meant 10 times more.”
Closing the wage gap
Increasing educational achievement for Hispanics will do little to boost their fortunes, nor those of the Austin economy, if those young Latino workers can’t find meaningful, well-paying careers. And here, Hispanic-owned businesses could make a difference.
In 2007, only 9 percent of Hispanic-owned businesses in Texas had paid employees, according to a 2012 study conducted by the Bureau of Business Research at the University of Texas. Yet those with paid workers tended to hire a high ratio of Hispanic workers, the study found.
Finding ways to boost Latino entrepreneurship — and help those firms grow — could generate a considerable field of new jobs for Hispanic workers, said Bruce Kellison, associate director of the bureau and co-author of the report. If Hispanic firms had launched and grown at the same pace as non-Hispanic businesses in 2007, Texas would have had 321,000 more Latino-owned businesses that employed an additional 2.7 million workers, the study found.
“Increasing entrepreneurship rates among the Hispanic community will also help Hispanic employment opportunities,” Kellison said.
While that might not lead directly to high-paying careers for Hispanic workers, it would help offset some of the economic gaps that persist in Austin and across Texas. A recent study by the Federal Reserve Bank of Dallas found a 40 percent wage gap between Hispanics and non-Hispanics in the state’s nonborder counties.
Education gaps threaten to solidify that income inequality and inhibit the economic mobility that leads to a more vibrant and increasingly diverse economy, said Pia Orrenius, senior economist at the Dallas Fed. According to the bank’s study, education alone accounted for more than three-quarters of the wage gap.
“What we’re starting to see — and what we should continue to see — is Hispanic youth as a whole responding to the (economic) landscape and the graduation rates going up,” Orrenius said. “Over time we’ll see improving outcomes from the Hispanic population. We already are.”
And as Guerrero and the rest of those young Hispanic workers replace the ACL People and become the primary characters in the Central Texas economic story, Austin’s ability to capitalize on that transition will determine whether that tale remains as dynamic in the future as it has been in the past.
Business writer Dan Zehr tracks the ebbs and flows of the Austin-area economy. His previous stories have focused on subjects including the declining percentage of middle-skills jobs and the complex business relationship between Texas and California.
Juan Castillo has covered for a decade shifting demographics and their implications for Central Texas. His work with census data has provided insights on such topics as the sweeping transformation of East Austin.
This is part of an occasional series by American-Statesman reporters chronicling how Central Texas’ rapid growth is changing the way we live.
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For a video that explains the challenges and opportunities that the young and growing Hispanic workforce will pose for Austin’s economic future, see this story online.