Since the start of the Great Recession, conservative pundits in the mainstream media have compared our state’s economy favorably to California’s. Next month, a consortium of Austin tech companies will be traveling to the Golden State to recruit skilled workers. The mirage of Texans’ prosperity glosses over Austin’s brutal unemployment rate and hurts UT students’ career prospects.
Much has already been written on Texan vs. Californian economics, but the argument usually goes like this: Profligate and fiscally irresponsible state Democrats in California drove out jobs through a combination of crushing taxation and relentless business regulations. Meanwhile, the business-friendly Republican state government lured more jobs to Texas than all others combined through no state income tax, broadly generous corporate tax incentives, tort reform and an unrestrained zeal in slashing regulations.
Predictably, Gov. Rick Perry didn’t hesitate to sing to the choir’s tune. “This isn’t rocket science,” Perry boldly declared in July, according to The Associated Press. “You keep the taxes relatively low, you have a regulatory climate that is fair.”
Never mind that Nevada, which followed Perry’s prescription to the T on taxation, ended up with the highest unemployment rate in the nation. Nor the fact it was airtight home mortgage regulations that largely insulated the Texas housing market from the subprime mortgage crisis that triggered the Recession in the first place. Surely, one could nonetheless infer Texans gladly accepted their position at the center of the jobs magnet.
Yet all the Pollyannaish analyses of the Texas economy fail to address one simple question: Are Texans themselves filling all these new jobs? No doubt, Texas swelled with newcomers throughout the recession, and according to the Census Bureau, one-fourth of these came from California.
But if these new migrants simply moved in to fill positions as internal hires in companies that relocated to Texas, unemployed native Texas residents can hardly benefit. And perhaps if a California small business were to set up shop in Austin, its business proprietors could find it cheaper still to bring established California employees with them than take their chances with us Austinites.
Austin companies themselves have shown a predilection for hiring out-of-staters over city residents. On Sept. 13 and 14, more than 30 Austin executives of high-tech companies will traverse California to recruit software engineers and product marketers. Under the banner of the Austin Technology Council, these CEOs will woo and coax prospective California employees to relocate and work in our city.
Indignant Austinites must surely wonder why these companies aren’t hiring native residents instead. According to an article Wednesday in the Austin American-Statesman, the executives have said “Austin’s pool of technical workers is becoming tapped out.”
Tapped out? Either every UT graduate in our computer science, business marketing and computer engineering programs has been awash with job offers or these companies’ execs might be on to something.
California hosts some of the most elite and prestigious high-tech oriented programs in this country, and it should be proud to do so. Alumni from Stanford, Caltech and Berkeley are assets to any company willing to hire them. But UT grads are no less talented — according to US News and World Report, UT’s computer engineering program is ranked seventh nationally, beating out Caltech. Our computer science program is ranked eighth, again beating Caltech.
Given the size and competitive nature of these UT programs, I find it highly suspect that all these companies wouldn’t focus on UT graduates. My theory is these companies understood that experienced California engineers, spooked by record unemployment afflicting their family members and neighbors (and possibly themselves), would take even lower salary offers than native Austinites would consider.
In an era of competitive advantages and “race to the bottom” economics, any company desiring to poach out-of-staters to work in Austin is rationally justified. But it doesn’t mean California or Texas workers are necessarily more qualified than one another.
And it seems the nature of new Austin jobs often gets lost between the headlines. For instance, Perry had a field day in July when he announced video-game developer Electronic Arts would create 300 new jobs in Austin. What sounds less glamorous is that more than half of EA’s new jobs will be contract work with no guarantee of permanent positions afterward.
California is a pioneer in economic renewal, and I have no doubt this marvelous state will soon rebound stronger than ever. It shares diversity, a common history, generously kind people and indefatigable optimism with Texas. But it isn’t our doppelganger. Texans in general, including Austinites, bear a heavy burden of unemployment. We may have job growth on paper, but new jobs mean little if anything if Austinites can’t fill them.
Quazi is a nursing graduate student.
