Texas remains one of the fastest growing states in the U.S., but a report published by the Dallas Federal Reserve Bank showed a significant reduction in the number of people moving to Texas since 2015. That’s left employers — who are already having a difficult time finding workers amid historically low unemployment rates — in an even tougher position.
Since 2016, the share of population growth in Texas from people moving to the state is half of what it was previously. Each of Texas’ four largest metro areas — Houston, San Antonio, Austin and Dallas — has experienced a reduction in domestic migration and overall population growth.
“We’ve seen really good growth, and yet we’re seeing slowing of migration — and that’s not because we’re less attractive. It’s because outside of Texas, things are also very good,” said Keith Phillips, senior economist at the San Antonio branch of the Dallas Federal Reserve.
In other words, the so-called Texas Miracle — the state’s unrivaled ability to create jobs and economic opportunity — now has rivals. Nationwide, most workers can find jobs if they want them, making a cross-country move to Texas in search of a paycheck less appealing.
In the five years from July 1, 2010, through July 1, 2015, Texas saw more than 138,000 people on average move to the state each year from elsewhere in the country. But from July 2015 to July 2018, Texas added just under 96,000 people each year from domestic migration — a 31 percent annual drop, according to the U.S. Census Bureau.
Some industries — such as information technology — have a harder time finding workers than others.
David Heard, CEO of TechBloc, the San Antonio technology industry group, said the city has had difficulty standing out to potential workers among cities across the nation with promising tech industries, such as Nashville, Tenn., or Columbus, Ohio.
With tech workers in demand in metro areas across the nation, the decision often comes down to which city offers the best quality of life, Heard said.
“These people tend to get paid well,” he said. “Wherever they go, they’re in demand, so the issue is about how being competitive on salary and having job availability often aren’t what charge their decision. It really comes down to lifestyle issues.”
Most cities looking to attract tech workers and other “creatives” have been following the same gospel — investing in public and cultural amenities such as lush parks and concert halls to lure talent — for nearly two decades. The slowdown in migration to Texas makes the challenges for tech companies even more daunting.
The Dallas Fed projects that around 90,500 Americans will migrate to Texas from elsewhere in the country in 2019. That tops the 82,500 people who migrated to Texas last year, but it’s down from the years following the Great Recession, when 123,000 people on average came to the state annually.
“Domestic migration is usually an indication of employment opportunities or a lack thereof,” Lloyd Potter, Texas’ state demographer, said. “Essentially, it’s an indicator of a slowdown of at least one sector of the economy … The confusing aspect of it is that we have very low unemployment.”
Potter said the decline in people moving to Texas is difficult to parse because of the differing regional economies across the state.
We’ve talked about some of this before, in the context of Houston’s slowing population growth and the Latino population growth engine that keeps our state moving forward. I think it’s unlikely that these trends will continue over the longer term, but it’s always worth keeping an eye on this stuff and thinking about what underlying causes there may be. And it’s another reminder that a complete and accurate Census count is vital, because otherwise we’re just guessing. Sure would be a bad idea to let the Trump administration screw that up.