Research, Data, and Analysis Focused on Central Texas
Produced by the Capital Area Council of Governments
Recently, CAPCOG contributed to a conversation among regional stakeholders about how best to serve opportunity youth - generally defined as people between the ages of 16 and 24 who are neither in school nor working. A short summary of some of the analysis looking at youth in the region and existing employment information is provided below.
A Quick Summary of the Challenge
According to the 2015 American Community Survey estimates, there are roughly 270,000 people in the Austin MSA between the ages of 15 and 24. Broadly, they are distributed in a manner that mirrors the population of other cohorts in the region - with most living in Travis, Williamson, and Hays counties. The map below looks at a more granular level, showing the share of residents between the ages of 15 and 24 across the Austin MSA.
The region's universities stand out on the map - it's easy to spot the University of Texas, St. Edwards University, Texas State University, and Southwestern University as the bright red dots on the map. But the map also shows slightly higher shares of youth residents east of IH-35 in Travis County, in San Marcos and Kyle in Hays County, and in communities throughout Williamson County.
While finding employment is a critical component of discussions for how best to serve opportunity youth, that conversation quickly moves to finding meaningful employment. A key factor in the type of employment options youth workers have is their level of educational attainment. Of the residents between the ages of 18 and 24, about 37 percent have not completed high school (or passed an equivalency exam). The distribution of those residents is shown on the map below.
Social Impact Research estimated that the lifetime cost to the government - in terms of social service provision and lost tax revenue - per high school dropout is over $306,000. They estimate that individuals with a high school completion credential have lifetime earnings that are on average 109% larger than those that do not complete high school. Those figures, in conjunction with the deep pockets of low educational attainment shown in the map above, clarify the importance of addressing the region's opportunity youth challenge.
So What Does the Jobs Picture Look Like?
Given that context for where young residents are located, the figure below begins laying out the employment picture in the region. The figure shows the overall change in employment in the region between 2011 and 2016, segmented by industry sector. In other words, each dot corresponds to an industry group. The farther to the right the dot is on the chart, the more jobs that have been added in that industry in the past five years. The closer the dot is to the top of the chart, the higher the average annual wages in that industry. And the bigger the dot, the more people employed in that sector as of 2016.
Employment Change in the Austin MSA by Industry Sector and Average Annual Wage
The figure highlights one of the key trends affecting the labor market in the Austin area, regardless of age: the fastest growing job opportunities in the region are in high-wage industries (e.g., Professional Services) and low-wage service sectors (e.g., Food Services). This bifurcation of the labor market has all sorts of regional impacts, from equity issues to compounding our transportation problems, but it also contributes to the sense that it is difficult for young residents who do not take a traditional path (e.g., high school completion, a degree from a 4-year institution, etc.) to find middle-wage work. There are middle-wage jobs in our region - folks will argue about whether or not there are enough - but they are certainly not growing at the rate that high-wage and low-wage jobs are. This can make it difficult for young workers to feel as though they can "work their way up the career ladder."
Digging a bit deeper into this issue, the figure below shows specific occupations and the educational attainment level typically required to get hired in that occupation.
Employment Change in the Austin MSA by Occupation, Median Hourly Wage,
and Required Education Level
Once again, one sees rapid employment growth in occupations with no formal education requirement, as well as a few that require a high school diploma (i.e., those dots in purple and teal). Additionally, there is strong growth in those occupations that require a bachelor's degree (i.e., the orange dots), particularly those occupations in the computer and software fields. Middle-skill jobs however - those blue, pink, and brown dots - are largely absent among the fastest growing occupations.
So, how do we put all this together to say something about the prospects for opportunity youth employment in the region? In spite of slower growth in middle-skill occupations, there are reasons for optimism. The figure below shows expected employment demand over the next 5 years for individual occupations. The set of occupations analyzed has been circumscribed to only those that a) pay on average above $45,000 per year, b) are expected to demand at least 25 workers per year over the next 5 years, c) do not typically require professional experience, and d) typically do not require a bachelor's degree to be hired. The occupations shown have then been categorized according to the typical educational attainment required.
Forecast In-Demand Middle-Skill Occupations in the Austin MSA (2017-2022)
The heartening takeaway from this picture is that there are clearly certain occupations that are accessible to opportunity youth that are in demand in the region. Moreover, there is some variety in the kinds of occupations that are shown, which is encouraging because not every young worker will be inclined toward the same kinds of work. Electricians, computer support specialists, and nurses, for example, are all promising options for middle-skill youth.
The challenge to the region, and in particular the workforce development system, is how do we heighten awareness around these opportunities for young workers, how do we align services and supports to equip opportunity youth with the skills needed to get hired in these jobs, and how do we facilitate placement of young workers so that employers can find the workers they need and vice versa?
There is promising work underway among the many organizations in the region that are stakeholders in the workforce development system. Austin and Travis County have embarked on a Community Workforce Master Plan to help guide these efforts. Austin Community College and Texas State Technical College are providing classes to help make in-demand skills more attainable. One hopes that these efforts will continue and will scale to help the region rise to meet the needs of young workers.
Ever wondered how wages in the Austin Metro Area compare to similar regions? Us too.
The following graphic shows how local wages by major occupation group compare to a range of peer regions. Use the dropdown menues below the chart to select a comparison region and toggle whether or not the graphic controls for cost of living.
One note - the cost of living adjustment considers cost of living at a metro area scale. When controlling for cost of living, the Austin MSA appears to pay wages among the highest of the peer regions analyzed. However, some of this effect is driven by the low cost of living in many of the communities surrounding Austin and Travis County. Limiting the cost of living calculation to a smaller area, such as only the counties along the IH-35 corridor, would have the effect of bringing cost-of-living-adjusted wages in the region more in line with other peer cities.
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Data Points is a blog dedicated to policy and planning issues in the Capital Area of Central Texas. It is produced by staff at the Capital Area Council of Governments (CAPCOG).