Austin: The Real Story For Companies Thinking of Relocating

I moved to Austin in 1978 when the population of the Austin metro area (Austin Round Rock San Marcos MSA) was in the 350,000 range. Today the MSA is slightly smaller than 1.8 million. The Capital Area Council of Government estimates the area will experience a 23 percent increase in population between the 2010 and 2020 censuses. That would put the population of the MSA at about 2.2 million.

Many things have changed and many things have stayed the same during the 33 years I have lived here.

Austin has been lauded in the mainstream media lately as a top place to live, as one of the fastest growing population areas, and as the number one place retiring baby boomers are moving to.

As an Austinite, I love reading these pieces, but there are a number of factors that could temper enthusiasm for the city, both in terms of companies considering moving here and workers relocating to where they think the grass is greener.

 Government

Austin government has always had a love-hate regard for growth. For decades we have had city councils that stymied growth. "Gowth is evil" seemed to be the mantra for many old timers. Today the city council is about equally divided over the issue of growth.

A perfect example of Austin saying no to growth came early in the history of Dell Computers. Founder Michael Dell went to the Austin City Council and the Travis County commissioners seeking tax concessions for building his company headquarters within their jurisdiction. When the city council said no, Dell built its headquarters less than 1/10^th of a mile over the Travis Williamson County border. Michael Dell made a statement that was not lost on the City of Austin leaders when his company passed its first $1 billion in revenues.

Dell and the City did eventually make up, and Dell has located a number of production-line facilities inside the city limits. Still, Dell’s throwing down the gauntlet to the City of Austin pushed growth north to Round Rock and Georgetown because employees of Dell and suppliers to Dell wanted to be near Dell. The northern suburbs were ecstatic to have Dell and many other companies that have located there to escape the old ways of Austin government.

Another growth-related issue near and dear to many living or visiting here is traffic congestion. Twenty years ago, Austin did not want to build any more major traffic arteries. To this day the city has not built a major east-west artery in the main part of town. So Austin has the distinction of having one of the worst mid-sized MSA traffic congestion problems in the country. We also have a metropolitan bus system that doesn’t serve all of the metro area and on any given day runs at a very low occupancy. Mass transit has a long ways to go here and can't be counted on yet. It is simply too clunky and hard to use.

Today Austin seems like it has adopted a “smart growth” strategy by luring companies that are green and have higher paying jobs. There is a reason Google, FaceBook, and several other companies have recently agreed to employ significant numbers of people here. In some fields, Austin has a very large supply of software programmers, engineers, and high-tech workers.

Quality of Life

If you like live music, lakes, and libraries you are in luck here. Austin has six large lakes within an hour’s drive. Several of our beautiful lakes run right through town. Hundreds of music venues present live music most weekend nights. Just about every night you can find something appealing to you.

Trish Wade, a 30-something physical therapist who moved to Austin about three years ago from Pennsylvania, describes Austin culture as “hippie meets cowboy.” Having lived in Washington, Oregon, California, Colorado, and Pennsylvania, her reasoning for moving to Austin was that it didn’t have the snow and cold weather she hated while attending graduate schools in Oregon and Pennsylvania. She thought with all the outdoor activities and sports Austin offers, it would be a good place to put her doctorate in physical therapy to use. Although Wade didn’t choose Austin for this reason, Austin has a large population of physically active baby-boomers moving here. Her job as a physical therapist will be in high demand here for many years.

Wages and Employment

About a year ago, former Austin economist Brian Kelsey did a study on wages of high tech workers in the Austin MSA. His study concluded that in 2009 the average high tech worker was earning 92 percent of what they were making in 2000. Folks who move into Austin from places like California are shocked at how much lower wages are here. A software programmer may make half as much as one in Silicon Valley. On the other hand, Texas doesn’t have a state income tax and for entrepreneurs the cost of doing business in Texas is estimated to be about 25 percent less than in the large cities in California.

Earlier this week the Austin Chamber of Commerce announced that there were 10,500 jobs vacant in Austin. Upon closer inspection, though, it appeared to me that the jobs they were touting were mostly minimum wage or low-paying positions. If you don’t have employment lined up before you make the move to Austin, you may be surprised at how many people you will be competing with for a job when you get here.

Employers like Austin because every year our universities turn out tens of thousands of bright minds. Many graduating students don’t want to move away from the Austin area. This is the biggest reason employers are moving here. We also have a disproportionate number of residents with advanced degrees, many of whom accept lower paying jobs rather than move away.

I looked at the most recent statistics from the U.S. Bureau of Census to get a feeling about how Austin pay ranked against other areas for a number of professional fields. I was surprised to find that we were a little above the national average for registered nurses, CPAs, attorneys, and software programmers. I would say, though, that the Census doesn’t do a very good job breaking down some of those categories (based on education and advanced training).

The Census does indicate that the average worker in Austin is making 14 percent less than the national average. This could be because few unions operate here and some of the blue collar vocations may make less than they would in metro areas where unions are more influential.

Conclusion

Many folks throughout the country believe Austin is one of those places that are great to visit but not for year around living. By all means visit us, spend your money here, and take great memories with you when you go home.

Then there are those die-hard Austinites like me who could never ever be lured to live in another city egardless of any increase in pay.

But for those folks who are thinking about moving here because they have heard that the City has jobs and is a great place to live, my advice is to do your homework first. Make sure there is really a fit here for your skill set before you rent that U-haul.

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Sam Thacker is a partner in Austin based Business Finance Solutions.
E-mail: sam@lesliethacker.com
Twitter: SMBFinance