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Austinites make up 6 of 10 employees at firms with economic agreements

Monday, July 29, 2013 by Bill McCann

Roughly  6 out of every 10 workers hired by companies that have economic development agreements with the City of Austin live in Austin, according to an informal survey by Austin’s Economic Growth and Redevelopment Services Office.


EGRSO officials say they are pleased with the percentage of Austin residents hired under the agreements in which the city has invested millions of dollars to help spur economic growth. Research by EGRSO on local hiring, including other municipalities, shows that the city’s figures exceed those considered best practices.


But at least one Austin City Council member is not satisfied with the findings.  


“We should be doing all we can to spend Austin tax dollars on hiring Austin residents, who also are city taxpayers,” Council Member Laura Morrison told In Fact Daily. “I would like the number to be higher.”


Morrison said she will have numerous questions for city staff when the subject comes up again. Among other things, she said she is interested in learning more about the relationship between the location of the companies and the hiring of Austin residents.


Under the economic development program, the city offers financial incentives to firms that agree to make new investments in the city and create new jobs. Currently, the city has agreements with 11 companies, which have committed to a combined investment of $4.5 billion, and to creating 7,890 jobs spanning out to 2024.  In turn, the city has committed $73 million in financial incentives over the period, assuming the companies keep their end of the deal. To date, $18.6 million has been paid out.


Responding to a request from Morrison earlier this year, EGRSO staff polled the 11 firms to determine how many of their current employees live in Austin, as opposed to other area communities.   


The survey found that, on average, the labor force of the nine companies that responded is comprised of 61 percent Austin residents, according to a one-paragraph statement delivered recently to Morrison. The statement summarizing the survey did not provide details on how that conclusion was reached.   


The percentage of Austin residents employed by these nine companies ranged from 49 to 96 percent, with seven of the nine reporting more than 60 percent of their workforce living in Austin, the statement said.


In response to a request from In Fact Daily, EGRSO provided the following breakdown of the survey results by company and the percentage of workers residing in Austin: Visa (57 percent); Apple (67 percent); US Farathane (64 percent); Advisory Board Company (79 percent); Facebook (96 percent); LegalZoom (67 percent); Hanger (62 percent); HelioVolt (60 percent); and Samsung (49 percent).  HID Global and eBay did not respond to the survey.


Facebook, located in downtown Austin, hired by far the largest percentage of Austin residents, the survey showed, raising a question of whether future economic-development efforts should focus on getting firms to locate in or near downtown.


In an email response to questions, EGRSO’s Melissa Alvarado stated that companies located outside a 10-mile ring from downtown reported hiring between 57 percent and 79 percent Austin residents, while companies located between a 7 and 10-mile ring reported hiring between 49 percent and 67 percent Austinites.


“As a general statement, yes, it is logical that proximity to downtown increases the propensity for local hiring. However, locating near large quantities of residential housing also increases the propensity for local hiring,” Alvarado wrote.


While the agreements contain no requirements for local hiring, Alvarado indicated that EGRSO is taking steps to encourage hiring Austin residents. For one thing, she stated, after studying options on how hiring Austin residents can be achieved, the department has developed four recommendations that will go to the Council as part of a larger report on the city’s economic development policy. 


Additionally, EGRSO requires each company to work with organizations such as the Austin/Travis County Reentry Roundtable, Minorities for Equality in Employment, Education, Liberty and Justice, the Texas Department of Assistive and Rehabilitative Services, the National Society of Black Engineers, the Society of Hispanic Professional Engineers, and local minority chambers of commerce to expand the company’s pool of diverse candidates in hiring recruitment, Alvarado stated.

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