Latinos had income gains, but not all the news is rosy

Bladimira Martinez takes notes while her daughter and business associate, Yessenia Ramirez, conducts business in Pflugerville last month. Martinez recently started her own cleaning company after years of working for others at or near minimum wage. NICK WAGNER / AMERICAN-STATESMAN

The headlines have been heartening lately for Latinos in Austin and across the country, at least when it comes to narrowing the income and education gaps that have dogged the nation’s largest minority group for years.

Recently, we learned that Latinos in the Austin-Round Rock metro area saw a hefty 17 percent increase in median household income from 2015 to 2016 — rising from $48,160 to $56,306, according to new census data.

RELATED: Why Austin-area Latinos saw a big boost in household incomes

Encouraging, yes, but it’s not time to get carried away just yet. It’s true that household incomes rose for Austin-area Latinos, but they still trail whites by a large margin.

Still, closing the income gap offers hope for anyone who believes in the old cliché that a rising tide lifts all boats. And for some time now in Austin, Latinos and African Americans have lagged behind whites in terms of quality of life barometers like income and educational attainment.

Attempts to close gaps led the city to launch Hispanic Quality of Life and African American Quality of Life initiatives, which I covered many years ago. The reviews were mixed. Some minority residents said they didn’t accomplish nearly enough. Some Austinites said the city should help all residents, not just certain minority groups. Regardless where you stood, many of the issues the initiatives sought to address back then are still around.

But back to the good news. Another reason to be encouraged is that there’s plenty of demographic evidence around to believe that if the Austin region will continue to prosper, the future will depend to a large part on the young and fast-growing Hispanic population.

In Travis County alone, 47 percent of the child population is Hispanic, researchers with the Community Advancement Network (CAN) found.

“When I speak to groups, I tell them, ‘That’s our future right there. That’s what the community is going to look like in 20 or 30 years,’” Raul Alvarez, who heads (CAN), told me.

Latinos already make up about 32 percent of the roughly 2 million overall population in the Austin-Round Rock metro area, according to 2016 census data. That’s no secret. What many people don’t know, however, is that demographic experts expect that the Latino population will become the largest portion of the Central Texas workforce sometime in about the next 15 years.

Such projections, however, increasingly lead to worries that Latinos will be left behind because as skill requirements for some careers rise, comparative lack of education could leave a growing share of the local Latino workforce stuck in low-wage jobs.

RELATED: The promise and the challenge of the Latino job puzzle

But there’s good news on that front, too. According to experts, one of the logical explanations behind the Latino income increase is that Latinos are reaching higher education levels.

The percentage of Texas Latinos ages 25 and older with at least a bachelor’s degree increased between 2015 and 2016, the American-Statesman reported recently.

A new report by the Pew Research Center also found that among Hispanics nationwide, the high school dropout rate is at a new low – 10 percent, continuing a decline spanning several decades. Moreover, as the Hispanic dropout rate plummeted, the share of Hispanic high school graduates who enter college rose, Pew reported.

CASTILLO: A new giving network answers why Latinos need a hand

While encouraging, the new income and education benchmarks aren’t all rosy, and pronounced disparities between minorities and whites persist.

Those figures showing the U.S. Hispanic high school dropout rate is at a new low of 10 percent? They don’t tell the full story: the Hispanic dropout rate was higher than for any other racial and ethnic group.

And though Austin Hispanics may have closed the gaps when it comes to income, they still lag far behind whites, whose median household income in 2016 was close to $74,000 – 31 percent higher than that of Latinos ($56,306) and 48 percent higher than that of African Americans (49,871).

And when income is measured another way – per capita –Hispanics in Central Texas make less than half of what Anglos on average make per year, according to the Austin Community Foundation.

It shouldn’t come as a surprise then that though Hispanics comprise only about a third of the overall Travis County population, they make up 55 percent of all Travis residents living in poverty, according to CAN, which keeps an annual Dashboard on its website that measures socioeconomic indicators.

It’s even worse for children. CAN researchers found that Hispanic children, although comprising 47 percent of the child population, make up 74 percent of all Travis County children living in poverty.

For Alvarez, that figure may be more troubling than anything else.

“That’s important because it says Hispanics are overrepresented in terms of family and poverty, and they’re going to face challenges that other populations are not going to face,” Alvarez told me.

In other words, there’s good news for area Latinos, but there’s much work to be done.

 

Transparency is key to making incentives work

rbz Apple Austin Offices 28
This is a view of the main entrance Building 1 of the Apple campus. The new Apple campus in Northwest Austin off Parmer Lane will eventually consist of 1.1 million square feet of office space covering 38 acres and housing all varieties of the technology giant. RALPH BARRERA/ AMERICAN-STATESMAN

While Austin’s economic development policy often gets mixed reviews from folks who live here, out-of-town admirers can’t gush enough about the city’s economic development philosophy.

Earlier this year, Amy Evans  wrote a lengthy retrospective for the National Housing Institute’s “ShelterForce,” that “Austin is in the enviable position of not believing it needs to offer companies incentives to get them to come to town.”

Evans’ piece only mentions at the end some of the local skepticism about the current policy, referencing the high-profile pull outs by  DropBox and US Farathane in 2014 from the program. At the time the companies gave their own business reasons for declining to participate in the program, but many saw their decisions as evidence that the city had regulated incentives too tightly to be of any real value.

Over the weekend, American-Statesman business reporters Lori Hawkins and Tim Eaton took a close look at the performance of the city’s incentive agreement with technology giant Apple. Under the terms of the incentives package, which was signed in March 2012, Apple agreed to create more than 3,600 new full-time jobs in Austin in 10 years while retaining at least 3,100 existing full-time jobs year over year.

In 2012, the Austin City Council approved $8.6 million in tax breaks for Apple in exchange for establishing its Americas Operations Center here. Apple also is in line for between $5 million and $6 million from Travis County.  It appears that Apple is well on track to meet those goals, 2,089 new jobs that been created since 2012,.

The transparency required by Austin has the benefit of providing a clearer window into whether the beneficiaries of such agreements are meeting the requirements set out by the city. However, the question of whether the jobs are the kind of jobs the city needs most is still murky.

Hawkins and Eaton quote Austin economist Jon Hockenyos as saying:

“These are the equivalent of manufacturing jobs in the old days — they’re jobs that pay a solid wage,” he said. “They provide solid middle-class incomes that sustain families. They’re the kind of jobs any city wants to see being created.”

In a later conversation with me, Hockenyos conceded that there is no way to know for sure unless Apple reveals the educational requirements for the jobs that were added. The mix of human resources, administrative, sales, engineering and operations jobs added at the Americas Operations Center in Northwest Austin may well live up to those expectations, but there is no way to prove it for sure.

The mid-range jobs referenced by Hockenyos are crucial to Austin’s future. “Manufacturing jobs didn’t require a college education, he said.”Instead, candidates needed high school education, maybe with some training in specific skills.”

Finding substitutes for those types jobs that the business community and policy makers agree that Austin needs has been tricky. These are jobs that provide a real pathway from low-wage work to middle-incomes and stable housing in a community that is short on both.

Failure on this point means that Austin will continue its spiral into greater economic segregation. In fact, Hockenyos raised the alarm to council members in his briefing last week on the state of the Austin economy.

“One of the key issues for so many communities that struggle with this stubborn level of people who remain hard to employ is that there isn’t much demand, there isn’t much need for workers in many in many places,” he said during the April 27 budget work session. “A big part of the overall problem is not in play here. We need workers of all different kinds. The issue is capacity and access.”

From a policy perspective, that puts the onus on the city council and other government entities to continue to be strategic and transparent as theycontinue to invest in economic development.

It’s a message that it appears that the Department of Economic Development is already attuned to. In its March 2015 report on the performance of the so-called Chapter 380 agreements, the department wrote:

 Today, as Austin is ranked first in overall economic performance and holds an offcial unemployment rate of 3.8 percent, the vision for utilizing this tool is shifting to focus on creating opportunities for those hard-to-employ individuals, as well as families that are in poverty and for those looking to advance into or up from the middle-class. And, there are areas of Austin where the unemployment rate remain unacceptably high not just for adults, but also for youth.

Some of that work has begun with the Fair Chance Hiring rules that were passed in late March, but there is more work to be done. Austin is fortunate at the moment to not need to incentivize jobs for the sake of jobs, so the community (public and private) should turn its attention to using resources to fill in the gaps to build a healthy and prosperous community for all.