Adler-O-Meter

Rework incentives so they reward creating middle class jobs

"Reform the policies for granting incentive subsidies to reward creation of middle class jobs, as well as training local residents for those jobs." Mayor Steve Adler also wants to allow small businesses to participate in order to incentivize growth of small businesses.


Sources:

Steve Adler campaign website (Sept. 8, 2014)

Subjects: Jobs

Updates

Steve Adler promise to encourage middle-class jobs no longer stalled

Austin Mayor Steve Adler has been stepping up his efforts to address Austin's affordability crisis with programs to drive up wages.

That's in the spirit of a 2014 position paper from Adler's mayoral campaign, "Addressing the Affordability Crisis," which said that he wanted to address affordability woes in part by driving up area wages. One way to do that, the candidate indicated, would be to reform economic development incentives, meaning the tax credits and other benefits the city offers companies to expand or relocate to Austin. Such reforms, he suggested, could be connected to improved training for residents to secure higher-income jobs.

This March, the Austin City Council approved a resolution from the mayor asking staff to rework city economic development policies to prioritize living wage and middle-skill jobs, which typically involve more education than a high school diploma but not a four-year college degree. The resolution also called for increasing employment among hard-to-employ populations; increasing access to healthy food options and other "goods and services" in underserved areas of the city; and increasing the availability of affordable commercial space for small businesses.

The resolution called for staff, after meeting with business and social service groups, to bring back proposed policies by the end of August.

Meantime, the city incorporated some of the same priorities into an economic development incentive deal that the council approved in April with Merck Sharp & Dohme Corp. The city agreed to pay the pharmaceutical company up to $856,000 over 10 years in exchange for locating in Austin and creating about 119 jobs paying an average annual salary of $84,586.

Separately, Adler joined with Travis County leaders on June 1 to announce a regional workforce training program. The plan outlines strategies for employers and educators to improve job training. Per Adler's campaign promise, the plan calls for boosting to 10,000 the number of low-income people who complete job training and then obtain jobs paying at least $40,000 a year, all by 2021.

And why 10,000? We asked Leslie Puckett of Workforce Solutions Capital Area, the nonprofit responsible for organizing and evaluating workforce development activities in the Austin/Travis County area. By email, Puckett said that in the Austin area, about 1,295 people a year lately obtain middle-skill job credentials.

Generally, Puckett said, about 55 percent of the low-income people who currently receive training find a job; the workforce group hopes that over five years, the announced regional workforce training will boost that rate to 75 percent, which would break out to roughly 8,000 additional presumably prepared workers. Separate "upskilling" training would help about 2,000 people, a number the group picked because it seemed like an achievable goal, Puckett said.

Officials suggest the current problem isn't a lack of middle-skill jobs: An analysis by the Greater Austin Chamber of Commerce found the region had almost 14,000 postings for jobs paying $30,000 to $60,000 annually with more than half of those requiring only a high school diploma, according to a May 2017 Austin American-Statesman news story. On the other hand, more than three-quarters of the middle-skill job openings in the region are in fields such as healthcare, information technology and other skilled trades that involve some post-secondary training.

We're revising our rating of this Adler promise from STALLED to IN THE WORKS.


IN THE WORKS — This is our broad category to indicate the promise has been proposed or is being considered.

We published the following update, by Austin American-Statesman staff writer Lilly Rockwell, Feb. 1, 2016. It's here only for archival purposes:

A 2014 position paper from Steve Adler's mayoral campaign, "Addressing the Affordability Crisis," said he wanted to address affordability woes in part by driving up Austin-area wages.

One way to do that, the candidate indicated, would be to reform economic development incentives, meaning the tax credits and other benefits the city offers companies to expand or relocate to Austin. Such reforms, he suggested, could be connected to improved training for residents to secure higher-income jobs.

And, Adler said, there would be opportunities for small businesses to participate. In a more in-depth explanation of this promise, Adler said that as mayor, he would convene about a dozen stakeholders on workforce training issues to encourage collaboration.

So, did Adler or the Austin City Council, sworn in at the start of 2015, fulfill this promise?

Neither unveiled or approved reforms related to incentives or workforce training, though Adler and Austin stakeholders huddled a bit, touching off talk of proposals on the horizon.

Adler, in a December 2015 interview with the Austin American-Statesman, said he'd started meeting with stakeholders on how to help people who lack the right skill set, educational credentials or experience land middle-wage jobs. The stakeholders, he said, included: the Greater Austin Chamber of Commerce, Austin Community College, Capital IDEA, Travis County Judge Sarah Eckhardt and the Austin/Travis County chapter of Workforce Solutions, a coordinating agency responsible for tracking local workforce data and advising on policy.

The result, Adler said, was getting everyone focused on devising ways to help low-skilled workers needing middle-wage jobs.

Wage stagnation also matters to the mayor, Adler's chief of staff, John-Michael Cortez, separately told us in a phone interview. "We tend to think about affordability in the cost of housing, taxes and utilities," Cortez said. "The other side is income. If you can make more money, you can afford more things."

One issue: there is a disconnect between Austin-area earnings and surging housing costs. In the Austin Metropolitan Statistical area from 2012 to 2014, individual and household income rose 3.8 percent, according to data compiled by the U.S. Bureau of Economic Analysis and Jim Gaines at the Real Estate Center for Texas A&M University. During that same time period, Gaines said, the median home price soared nearly 18.3 percent.

When we asked, members of several stakeholder groups confirmed that at Adler's request, there had been various meetings about workforce development. Drew Scheberle, a senior vice president for the Greater Austin Chamber of Commerce, said the mayor has "spent a lot of time trying to understand and get the right people" in a room to talk about how to help lower-wage workers secure higher-paid jobs."

Steve Jackobs, executive director of Capital IDEA, which helps low-wage workers transition to better-paying jobs, said specific policy solutions had been bandied about.

Jackobs said that due to Adler's promise, a program launched independently of the mayor's activism could be improved. In fall 2015, Capital IDEA and Austin Community College launched "Career Expressway" to help low-wage workers enter accelerated programs leading toward college degrees.

The program builds in internships in high-demand fields such as computer networking through an ACC partnership with the Austin Housing Authority. Students do the internships either through ACC or the authority. Jackobs told us an idea discussed with Adler is whether to expand the program by asking local employers in growing industries to hire students as interns, perhaps making such hires part of each city economic incentive deal.

Cortez told us that the possible ask of employers is "one of many" ideas being explored.Adler and Cortez each said talks with Eckhardt and the local workforce development board explored creating a "master plan" that catalogues Austin-area workforce needs, sets priorities and details available resources. (We called Eckhardt and didn't hear back.) If implemented, Adler said, the catalogue could help officials address the "skills gap," meaning a mismatch between jobs locally created the the skills and experience in place among many lower-wage Austin workers, through better coordination among nonprofits, local governments and private industry.

Adler said his game plan is to gather stakeholders this year and hold a "big community meeting." Adler said he might be ready to talk publicly about progress he's made on the issue of the "skills gap" in spring 2016.

Adler further said the described master plan, drafted by Workforce Solutions, could be available by mid-year. Alan Miller, the executive director of Workforce Solutions, said staff there are working on a report, at the request of Eckhardt and Adler, to include a "comprehensive analysis of employer needs and skills of the workforce to identify gaps."

Bottom line: Adler in 2015 initiated talks about reforming incentives and workforce development efforts which didn't result in public policy proposals or other actions.

Community conversations could lead to action. For now, we rate this previously unrated Adler promise STALLED.


Stalled — There is no movement on the promise, perhaps because of limitations on money, opposition from lawmakers or a shift in priorities.

Sources:

Document, Resolution No. 20170302-034 directing Austin's city manager to revise economic development policies, authored by Mayor Steve Adler, adopted by Austin City Council, March 2, 2017

News stories, Austin American-Statesman, "Austin City Council approves incentives to bring Merck tech center," April 13, 2017; "New workforce plan aims at income side of Austin affordability dilemma," May 31, 2017

Email, Leslie Puckett, planner/business relations specialist, Workforce Solutions, June 28, 2017

Interview, Austin Mayor Steve Adler, Dec. 30, 2016

Interview, Drew Scheberle, senior vice president, Greater Austin Chamber of Commerce, Jan. 22, 2016

Interview, John-Michael Cortez, chief of staff, Mayor Steve Adler, Jan. 22, 2016

Interview, Steve Jackobs, executive director, Capital IDEA, Jan. 22, 2016

Interview, Jim O'Quinn, leader, Austin Interfaith, Jan. 22, 2016

Interview, Jim Gaines, Real Estate Center at Texas A&M University, Jan. 27, 2016