Naked City

Blue-collar troubadours like Merle Haggard have been warbling for years that workin' folks can't get nowhere today. So it's doubtful that local songsters, or anyone else at the bottom end of the pay scale, will be surprised by the news from the Chamber of Commerce's "2000 Economic Review" published in December. In a nutshell, the report has this to say to the average Austin wage-earner: Your pay has gone up dramatically since 1997, eclipsing the national average. But the price of that home you already couldn't afford five years ago -- the one now owned by the young couple with the matching Labradors -- has gone up even more.

That Austin is now considered a "high-wage" city may seem a bit surreal to longtime residents. As late as 1997, the news was that paychecks in this university hamlet full of underemployed Ph.D.s were remarkably thin. But owing primarily to the demand for employees in technology-intensive fields, wages here shot up 15% in the period from 1997-98, according to data from Economy.com, which the Chamber report cites. For the decade, wages in Austin have gone up about 80%, the Chamber says, which is nearly double the 45% increase in the national average wage.

But for those not employed by high tech gazelles or in technically specialized sectors such as science and engineering, those pay hikes have been mostly wiped out by the escalating cost of living. With Austin's median home price now the second-highest in Texas, home ownership is on the decline, with only about half of the city's households able to afford one. What's more, tech wages are beginning to pull away from the pack, creating wider income disparities. Average wages in Austin have gone up from $32,000 to around $42,000 since1997, but high tech workers -- who by the Chamber's classification include not only software designers and online jockeys but also those in fields such as oil and gas, electric machinery manufacture, and biosciences -- saw their pay rise from $45,000 to $60,000.

So are the good times not really so good after all? That's definitely not the opinion of business executives. The Chamber writes that the local economy was the "envy of the nation" this year, continuing to gather accolades from dollar-sniffing mags such as Forbes and Inc. Austin is particularly attractive for new business, the Chamber says, because of the relatively high availability of engineering grads, number of patents captured, and volume of venture capital investment, which exploded by more than 50% since last year to top $1 billion. In 1998-99, Austin-San Marcos was the second fastest-growing metro region in the nation.

We know from the ongoing development battles over the aquifer and the unnerving squadrons of SUVs clogging MoPac that all this economic activity is seriously degrading certain of our quality-of-life benefits, but is there a tradeoff of some kind? Chamber president Mark Hazelwood says yes, pointing out that each new high tech job creates a half-dozen others -- and not, Hazelwood argues, just minimum-wage service jobs, either. Austin's economy has begun to mature and diversify, Hazelwood says, promising relative affluence to a wide strip of the population, and a boost to local tax coffers as well.

Labor market statistics from the Texas Workforce Commission tend to support Hazelwood's assertions, at least partially. The fastest growing employment sectors in the Austin-San Marcos region are currently in transportation, communications, public utilities, and manufacturing -- not retail and general merchandise, as in the rest of the state, though those are strong growers, here, too. A report published by the city of Austin in August says that over the past decade, one-third of all new manufacturing jobs in the state were created in Austin, and predicts that about 37% of new jobs here will be related to the technology sector.

While it's true that "technology-related" industries can create low-paying sweatshops like many other capital enterprises, signs are good that Austin is indeed creating a sound economic foundation underneath the tech bubble. That's bound to comfort city leaders, who are informed in this latest Chamber report that the inevitable economic slowdown following on the repeated bad news from Nasdaq has already begun.

But as the Chamber also points out, the city's infrastructure -- including not only roads but education, housing, and child care -- is being strained by the rampant growth. The TWC reports that the cost of quality child care (where employees typically make less than $7 an hour) has risen by 50% in the past five years and waiting lists are two years long. And as the old adage says, the poor we will always have with us: Advanced Micro Devices and Dell Computer may be among our largest employers, but Administaff, an office personnel subcontractor, is No. 1, and H.E.B. and Wal-Mart both make the top 10. So it's safe to say that a large portion of the Austin population won't be upwardly mobilized out of the $8-an-hour wage scale anytime soon.

If Austin follows San Jose's model, where high salaries and poor planning have driven housing prices and traffic congestion to intolerable levels, Austin can expect to see a net out-migration of people in the near future. Unless, of course, the city keeps corralling them back, via annexation.