DATA POINTS

By

THE CAPITAL AREA COUNCIL OF GOVERNMENTS

www.datapoints.org AUSTIN MID-YEAR EMPLOYMENT REVIEW
While communities throughout the country struggle to recover from the aftermath of the Great Recession, Austins economy continues to enjoy comparatively high levels of job growth. According to recently released data from the Bureau of Labor Statistics, Austin added nearly 25,000 jobs between June 2011 and June 2012. This marks the 9th year in a row the Austin regional economy has outperformed the U.S. economy.

JULY 2012
JOB GROWTH, AUSTIN METRO VERSUS U.S. (2003 2012)
(Year Over Year Comparison, June)

AUSTIN MSA

U.S.

6% 4% 2%

Austins economy is becoming more diverse. Outside observers, 0% for example, often cite Austins status as a state capital and 03 04 05 06 07 08 09 10 11 12 education hub as the secret to the regions economic stability -2% and resiliency. During the past year, however, these two sectors have experienced virtually no growth. High-tech employment, -4% another stalwart of the Austin economy, has also remained flat. -6% The information sector, which includes industries such as Source: U.S. Bureau of Labor Statistics software and telecommunications, hasnt experienced any net job growth within the Austin region during the past year. While AUSTIN METRO PUBLIC VS. PRIVATE EMPLOYMENT (1992 2011) the inability of employment statistics to fully capture the dynamics of innovative industries may obscure positive trends PUBLIC EMPLOYMENT PRIVATE EMPLOYMENT in Austins technology sector, the lack of growth is striking. Instead, Austins current employment growth is increasingly driven by a thriving business and professional services sector, a rejuvenated construction sector, and a leisure and hospitality industry buoyed by the regions continued population growth. During the past year, business and professional services have generated the largest number of jobs in the Austin region; since June 2011, this sector has been responsible for one-third of the regions employment gains. The construction industry is showing signs of a significant rebound; the sector has added nearly 3,500 jobs since June 2011. Leisure and Hospitality, a perennial source of employment growth in the Austin region, added 4,600 jobs (an increase of 5 percent).

307,300 (72.4%)
116,900 (27.6%)

623,300 (78.8%)

168,100 (21.2%)

1992

2011
Source: U.S. Census Bureau / Bureau of Labor Statistics

While overall growth statistics typically receive the lions share of media attention, the nature of Austins employment gains is arguably more important. In recent years, for example, much of the regions employment gains have occurred in low-skill area such as Leisure and Hospitality (where the average annual wage is below $20,000). In contrast, the business and professional services sector includes many high-skill occupations such as architects and lawyers (the average pay of the sector is 20 percent higher than the regional average). Furthermore, the construction industry provides solidly middle-class wages for many workers in the region. Heres hoping the region can sustain additional increases in well-paying sectors throughout the rest of 2012. AUSTIN METRO JOB GROWTH BY INDUSTRY ( JUNE 2011 VERSUS JUNE 2012)
TRADE, NATURAL INFORMATION MANUFACTURING TRANSPORTATION RESOURCES & & UTILITIES CONSTRUCTION 8.6% 3.2% 0.5% 0.0% 0 jobs 2,000 jobs 8,600 2,100 4,600 jobs 1,100 jobs FINANCIAL ACTIVITIES 4.5% PROFESSIONAL & EDUCATION & BUSINESS HEALTH SERVICES SERVICES 7.4% 2.3% LEISURE & HOSPITALITY 5.0% OTHER SERVICES GOVERNMENT

3.3% 0.2%

700 jobs 1,600 jobs 3,400 jobs

300 jobs

Source: Bureau of Labor Statistics

DATA POINTS
By

THE CAPITAL AREA COUNCIL OF GOVERNMENTS

www.datapoints.org THE CITY AS MATH EQUATION
In the past few years, there has been a growing chorus of urban theorists suggesting that universal laws govern the dynamics of urban places. According to these ideas, urban planning and economic development can be reduced to a series of principals in much the same way that biology explains the metabolic rate of humans. Theoretical physicist Geoffrey West, one of the most prominent of such thinkers, argues that one can draw conclusions about a citys performance on a host of socioeconomic measures purely based on a citys size. Specifically, West argues that as a citys size doubles, everything from crime to patent activity to the number of gas stations increases by approximately 15 percent. Its a provocatively simple theory. But is it true?
The Austin metropolitan region would seemingly be the perfect case study to test the theory that scale determines socioeconomic outcomes. From 1990 to 2010, Austins population doubled, jumping from 846,000 to 1,1716,000. During this period, what happened to crime, patent activity, and wages? CRIME: According to the Federal Bureau of Investigation, in 1990 there were 4.2 incidents of violent crime for every 1,000 residents in the Austin metropolitan area. By 2010, the per capita rate of violent crime dropped to 3.1 incidents per 1,000 residents. Instead of increasing alongside population growth, violent crime in the Austin metropolitan region has declined by nearly 40 percent on a per capita basis. PATENTS: Metro Austin produced 4.2 patents per 10,000 residents in 1990. If the theories of West are correct, the number of patents produced in Austin should have increased to 4.8 during the past two decades (for a total of 825 patents). In 2010, however, the United States Patent Office awarded more than 2,4000 patents to companies and residents in Austin. Instead of the 15 percent growth predicted by Wests work, per capita patent activity increased by nearly 250 percent in the Austin region. WAGES: In 1990, the average worker in Austin earned approximately $36,000 (adjusted for inflation). Today, the average wage in Austin is nearly $49,000. In short, wages in Austin have increased at twice the rate anticipated by Wests theories. Ultimately, the Austin metropolitan region is more innovative, less violent, and wealthier than any deterministic model would suggest. Although size may help determine a host of socioeconomic factors, Austin is clearly an outlier.

JULY 2012
CRIME: AUSTIN METRO VIOLENT CRIME PER 1,000 RESIDENTS 6 5

4
3 2 1 0

40% Decline MIDDLE-SKILL (48.2%)

Includes high school graduates, individuals with some college but no degree, and those with an associates degree.

1990

2010
Source: FBI

PATENTS: AUSTIN METRO PATENTS PER 10,000 RESIDENTS 20 15 10 241% Increase

5
0 1990 2010
Source: Bureau of Labor Statistics

WAGES: AUSTIN METRO AVERAGE WAGE (inflation adjusted) 50,000 40,000 33% Increase

30,000
20,000 10,000 0

1990

2010

Source: U.S. Census Bureau / Bureau of Labor Statistics