In recent years, Texas has been the state with the largest share of its hourly workforce earning minimum wage or less. According to the Bureau of Labor Statistics, that share has now dropped to 8 percent, putting Texas behind Georgia and Mississippi. However, its vast pool of 473,000 minimum-wage jobs -- twice as many as Florida and New York combined and three times as many as California -- keeps growing.
The good jobs vs. bad jobs scenario is particularly striking in the Austin-San Marcos-Round Rock area, where education levels and average incomes are higher than the rest of the state. Managerial and tech sector jobs are relatively plentiful, and unemployment is only 5.8 percent. Forbes magazine recently named the Austin area the best in the country for jobs.
Yet the city's poverty rate -- 20.8 percent -- is also higher than the state's, and as much as 40 percent of the area's population is barely getting by, according to some measures. The percentage with no degree beyond high school -- 54 percent -- has barely budged since 2006. An American-Statesman analysis of the latest federal data found that 9 of the 10 most numerous local jobs were low-earning: sales and office clerks, fast food workers, waiters and cashiers.
"We've got two rapidly diverging communities on our hands," said city demographer Ryan Robinson. "One community where life is great, where really, really good jobs are being created. Others have an extremely different experience in Austin."
"The labor market is changing even as we speak," said labor economist Chris King, director of UT's Ray Marshall Center for human resources research. In the past, he said, people "could get a job, a toehold, work your way up the ladder to a pretty good wage job. Now we've got career lattices -- flat wages, declining wages, U.S.-wide. If they don't shed the bad job and get one with upward movement, they're going to get stuck."
A downside of that scenario is the burden it puts on other taxpayers, says Sylvia Acevedo, CEO of CommuniCard LLC and founder of a local education fair for Hispanic families. "If you have a permanent underclass, that puts a lot more pressure on the middle class. If you're in the low end -- no benefits, no insurance -- who (besides taxpayers) is going to provide those services?"
Lending a hand up
The only new state program intended to educate workers out of that rut was assailed by an unlikely critic: Texas Workforce Commissioner Tom Pauken, who led the agency until last month.
Called Jobs and Education for Texans, the $25 million program under Comptroller Susan Combs allocated money in 2009 for scholarships to individuals and grants to nonprofit organizations with a "proven track record" in graduating low-income students from two-year programs at community colleges and technical schools. Capital IDEA -- the nonprofit that sent Alona Smith through ACC -- received $724,000; similar groups in Houston and San Antonio also received grants.
"I just really question the dollar value of what's going on here," Pauken said, complaining that the groups are tied to a radical, "anti-free market" agenda. He called the $45 million Texas Back to Work program a "better bang for the buck" because of its lower cost -- $2,100 per worker, compared with about $3,800 per participant per year for Capital IDEA.
Almost all of the state's Back to Work cost was for incentives to employers who hired jobless people for at least 16 weeks in positions paying less than $15 an hour. Within a year after the incentive period ended, 70 percent of the nearly 27,000 workers were no longer in those jobs, though state statistics show they were still employed somewhere.
"It's a strong program that employers have benefited from," commission spokesman Lisa Givens said. "It's not a job creation program -- it targeted a group of individuals, to give them a hand."
Last year, the average starting salary for Capital IDEA graduates was $17.81 an hour. The program cost is split between tuition and books, and intensive case management that can make the difference between success and failure for its students, most of whom are the first in their families to go to college.
"If you're in a predicament like I was, they're God's blessing," said Eric Satterwhite, now in his second year in ACC's mechanical drafting program. "I wouldn't be in school if not for them. There would be no way I could do it."
UT's Ray Marshall Center has found the nonprofit program produces "large, statistically significant gains in quarterly employment" that persist over time. Average earnings increased by $75,000 over 10 years, and an anticipated $255,000 over 20 years. The average 10-year return on taxpayers' investment, based on costs versus projected savings in public assistance: $10,000 per participant.
After Pauken leveled his criticism, Combs last year redirected half of the money intended for direct assistance to students through the nonprofits and put it into technical training equipment for community college classes. "More students would get trained through equipment grants, and fewer resources are needed to administer those grants," said R.J. DeSilva, a spokesman for Combs.
Asked about the charge of leftist bias, incoming Capital IDEA board Vice Chairman and corporate attorney Paul Skeith said that lifting people out of poverty goes hand in hand with investment in economic development, and is hardly a radical notion. "Most of us would say it comes from the Sermon on the Mount," he said.
For Alona Smith, the hard times of her own investment are receding: the daily grind of classes, homework, the unpaid clinical hours for her nursing degree, dropping off her baby to work a 12-hour night shift and starting all over again the next day. "That was my life for two years," she said. "I don't know how I did it."
She's not finished yet -- she wants to be certified in urgent care, a step up in her career -- but she can breathe easier. "It feels better to not be living paycheck to paycheck."
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