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City report puts “real” unemployment rate higher than state ranking

Tuesday, January 18, 2011 by Michael Kanin

Kevin Johns, director of the city’s Economic Growth and Redevelopment Services Office, likes to reference a report his office produced called the “2010 Workforce Analysis: Unemployed, Discouraged, Given Up.” Its 15 pages are packed with bleak statistics and the one it starts with appears to debunk the notion – put forth by the Texas Workforce Commission – that Austin’s unemployment is some 6.9 percent.


The city’s report concludes that “Austin’s combined official, and unofficial unemployment is 37,829 people (8.7 percent)” – almost two points higher than the rate the state reported for Austin in December 2010.


And despite those figures, Forbes Magazine has named the city as the top 2010 recovering economy in the United States. There are certainly many factors that led to that rank. Johns’ department (also called the EGRSO) is one of them. Johns and his staff work with local chambers of commerce and other governmental entities and interested parties to attract and support business development in Austin.


During 2010, it closed economic development deals with the likes of Facebook (200 jobs), Samsung (500 jobs), Hangar Orthopedic (300 jobs), and, most recently SunPower Incorporated (450 jobs). Over the same period, the department’s small business support team has seen a 200 percent uptick in its volume of services.


The workforce analysis report can be read as a preview for what’s coming down the pike. It surveys populations that contribute to its unofficial unemployment figures: The much-discussed “given up” demographic, segments of the homeless population, former inmates, high school dropouts.


“This document does point to a severe weakness in the economy in blue collar jobs,” says Johns. “So we’re going to be paying particular focus to that.”


The centerpiece of that initiative will be the office’s standing goal to turn an area by Austin-Bergstrom International Airport into a logistics hub. “(There are) millions of dollars of goods that flow through Austin—and literally bypass (the city) to other distribution centers,” said Johns’ deputy Rodney Gonzales. “Why shouldn’t we be able to recruit one, maybe two distribution centers here in Austin, close to the 130 corridor?”


By Gonzales estimates, such a move could create “anywhere from 500 to 1,000 jobs.” Johns added that those positions would be “forklift operators, truck drivers, people that work in the distribution and logistics industry that make $38,000 to $48,000 a year.”


Johns noted that these would directly impact the populations cited in the report. “(These are) very respectable jobs,” he said. “You don’t have to have a high school degree; if you got out of prison, you could still go to work there; if you’re homeless you can get a second chance.”


The department also plans to keep working with small local businesses. “If we can even encourage 10 percent of them to expand, that makes a dent in the hardcore unemployed,” Johns said.


Johns says that his department will need to be flexible. “We’re always revisiting what we can do and how we can collaborate with each other and other people we haven’t worked with in the past,” he said.


He flashed back to the report. “That’s a tough outlook for America if we’re doing the best and we’ve got that kind of a quantity of problems.”

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