April unemployment rate harkens back to dot-com boom — and bust

The last time the Austin-area unemployment rate registered 3.0 percent, as it did last month, the regional labor market was dropping into a three-year free fall.

There’s no cliff in sight this time. In the decade or so since the tech bust hangover finally cleared, Austin diversified its economy and set off on a remarkable run of job and population growth.

Yet the memories linger. So while local workforce officials took time Friday to appreciate Austin’s good economic fortune, they also talked of unfinished business.

“We’re fortunate to be in this economy,” said Tiffany Daniels, head of community relations for Workforce Solutions Capital Area. “But because the (unemployment) numbers are so low … we sometimes forget the work we still have to do.”

The metro area’s 3.0 percent jobless rate in April was its lowest mark since January 2001, according to preliminary data released Friday by the Texas Workforce Commission. It fell from 3.3 percent in March.

The Workforce Commission doesn’t immediately adjust its local data for seasonal workforce trends, but an analysis by the Federal Reserve Bank of Dallas put the Austin-area rate at a seasonally adjusted 3.3 percent.

To be sure, April’s rate remained a far cry from the heights of the dot-com heydays. Austin’s seasonally adjusted rate fell to 2.1 percent in March 1999, according to Dallas Fed data.

But the return to something approaching bubble-era rates underscored Austin’s considerable labor market vitality, particularly at a time when national labor market gains have cooled and many parts of Texas are suffering job cuts spurred by the sharp drop in oil prices.

Austin-area employers, meanwhile, continued to create jobs at a pace fast enough to absorb the region’s remarkable growth. According to census data released this week, the metro area is home to the country’s two fastest-growing cities — San Marcos and Georgetown — and Austin is the fastest-growing big city in the U.S.

Employers here added about 9,500 jobs during April, the Workforce Commission said, and Central Texas employers have expanded payrolls 3.2 percent since April 2014. Public-sector employment dipped slightly last month, but private-sector firms added jobs across a range of industries and, it appears, across a range of skill and wage levels.

The typically high-wage professional, scientific and technical services sector, which includes many of Austin’s high-tech positions, added 1,200 jobs during the month, the commission said. Factories and construction companies, traditional middle-wage sources, collectively added 1,200 jobs. And “food services and drinking places” — the area’s bars and restaurants — added 3,400 jobs in April.

That combination of rapid job growth and Austin’s low unemployment rate “tells you we’re absolutely in a period of time where there’s a war for talent,” said Kip Wright, senior vice president of Manpower North America.

If a company finds the talent pool it needs in Central Texas, it will need to adopt a “profound flexibility” to offer potential employees, and a workplace environment and compensation package that interests them, Wright said. Few companies do that.

“You have to nurture the talent base where you have it,” Wright said.

Yet for area workforce officials, nurturing talent takes on a different connotation altogether. Many of the area’s highest-demand occupations require technical skills possessed by too few of the area’s workers, said Drew Scheberle, senior vice president at the Greater Austin Chamber of Commerce.

While the University of Texas and Texas State University have record numbers of computer science students and graduates, job listings show even greater demand for those coding and software skills. Of the region’s 47,000 job openings, Scheberle said, half require a bachelor’s degree and up to 20 percent more require at least an associate degree.

“We need even more graduates,” he said.

The region’s long-term unemployed — many of whom have criminal records but not a degree beyond a high school diploma, if that — face an even steeper climb, said Daniels, the workforce board’s spokeswoman.

“A lot of people we serve may be employed but in part-time or contract jobs, and that’s the kind of cycle we’re trying to help them break,” she said. “A lot of that has to do with training. They’re qualified for particular kinds of jobs, but not those that are going to give them financial stability.”

Workforce Solutions and the Chamber recently launched a research effort to help gain a better sense for the ranks of both unemployed and underemployed workers in Central Texas, Daniels said.

In partnership with several local companies and nonprofits, they set out to get a credible local estimate of the broader measures of unemployment that the U.S. Bureau of Labor Statistics produces at the state and national levels.

The bureau’s broadest gauge includes the officially unemployed — workers who don’t have jobs but are looking for one. But it also includes “marginally attached” workers who say they want a job but have stopped their search, thus dropping out of the official labor force altogether, as well as part-time employees who want a full-time gig.

Local officials now estimate that an additional 15,200 Austin-area workers fall into this broader category, on top of the 31,500 officially unemployed residents.

“Things are going well,” Daniels said, “but there are still people not reaping the benefits of all this growth.”

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