Tuesday, February 9, 2021 by Chad Swiatecki

Local leaders say Samsung deal could boost middle-skill jobs

As city staffers continue to work behind the scenes negotiating an economic incentive package with Samsung to bring a $17 billion manufacturing operation to Austin, some local leaders see the deal as a large positive step for increasing so-called middle-skill jobs.

During a presentation at last week’s annual meeting of the Austin Chamber, Mayor Steve Adler touted a series of recent high-profile tech world expansions and relocations in Austin, including Tesla’s ambitious battery manufacturing facility in East Austin.

The Samsung deal would dwarf all recent tech economy activity in the area, with more than 1,700 high-paying jobs expected to follow an expansion of the company’s Parmer Lane location. It could come with a significant investment from the city and other local entities, however, with the company initially requesting $805 million in tax abatements and other considerations.

Local economic analysts see that request as purely an opening gambit in the negotiations, as it would seem to run counter to the city’s stated goal of revising economic incentive packages to favor smaller employers and moving low-income workers into higher-paying jobs through job training.

While Adler wouldn’t discuss the specifics, he told the Austin Monitor that one of the largest benefits of the expansion would be an increase in advanced manufacturing jobs for the local economy. Those would come from the company’s direct hires and the need for workers in related businesses.

“We have spoken about trying to bring to our city more and more of the middle-skill jobs. That’s only part of the challenge this community has and we also have to train people to upskill into those jobs,” he said. “One of the best ways is working with those companies to train directly for those jobs, rather than training them and then having them look for jobs.”

The Samsung deal would be a boon to the campaign the city and Travis County launched in 2017 with Workforce Solutions to focus on increasing hiring in advanced manufacturing, health care and information technology. Since that effort was launched, Workforce Solutions has enrolled 12,000 residents in training for middle-skill jobs, with 2,484 workers placed in new jobs so far.

Tamara Atkinson, CEO of Workforce Solutions, said the demand is increasing for workers in the fields identified at the start of the 2017 campaign, with health care and IT jobs exceeding demand by more than three times the number of applicants for those positions.

Atkinson didn’t have the same data for the manufacturing sector, but said the Tesla facility and the hundreds of jobs generated by Samsung could create new opportunities for the 17,000 workers in hospitality and other “face to face” industries who lost their jobs during the Covid-19 pandemic.

“Of course with Tesla coming, there’s going to be more of a focus on advanced manufacturing,” she said. “No specific plans issued by Tesla. It’s a skills game and for the jobs we expect to be created in these growing industries, to qualify and move up in them they’re going to need skills. That leads me to feel the best chance for affordability and competitiveness for our local workforce is for us to accelerate skills education locally.”

While Atkinson isn’t directly involved in the negotiations with Samsung, she said the intergovernmental agreement Workforce Solutions has with the city and county make it likely that trainees could be selected for specific job roles in the company once hiring begins.

“My read is that both bodies emphasize local hires with any companies they may be working with on a possible deal. So philosophically there is an alignment between my read of existing policies on incentivizing and optimizing local hire campaigns, and that supports where Workforce Solutions is.”

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Key Players & Topics In This Article

Economic Development Incentives: This is shorthand for a series of programs designed to lure business to a given region. In Austin, the program tends to take some form of tax-based incentives. These can include rebates or grants that are often tied to a set of stipulations. These tend to include local hiring goals, same-sex partner benefits, or, more recently, wage floors for construction workers who build facilities for the incoming organizations.

Greater Austin Chamber of Commerce: The Austin Chamber of Commerce is a private, membership-driven organization that includes 3,000 businesses, civic organizations, educational institutions, and individuals. According to the chamber's website, "Its mission is to provide leadership that facilitates the creation of a prosperous regional economy and effective advocacy for its members."

Mayor Steve Adler: Mayor of the city of Austin, elected in November 2014

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