Invited TestimonyTexas House of Representatives

Committee on Economic and Small Business DevelopmentFriday, March 9, 2017

Presented by Garrett C. GrovesCenter for Public Policy Priorities

GarrettC.Groves|EconomicOpportunityProgramDirector|groves@cppp.org | 512.823.2879|7020EasyWindDrive,Suite200,Austin,TX78752

REBUILDING THE MIDDLE CLASS

0

10

20

30

40

50

60

70

80

90

100

1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

Employment Shares by Skill Level January 1979 - September 2016

Low-Skill Occupations Middle-Skill Occupations High-Skill Occupations

High-SkillOccupations

TraditionalMiddle-SkillOccupations

Low-SkillOccupations

61%43%

13%

25%

18%Perc

ent o

f U.S

. Wor

kfor

ce b

y O

ccup

atio

n Sk

ill L

evel

SOURCE: The original chart is from “The Vanishing Middle: Job Polarization and Workers’ Response to the Decline in Middle-Skill Jobs,” by Didem Tuzemen and Jonathan Willis, Federal Reserve Bank of Kansas City, 2013. The original chart has been updated to begin in 1979 and end in September 2016. Data were provided by Didem Tuzeman.

THE SHRINKING MIDDLEJob Polarization in the United States

39%

Low Wage Jobs and the Shrinking Middle Class in Texas

•NOTES: Calculations include workers over age 15 with positive wages and exclude the self-employed. Quartiles based on the Texas and US wage distributions from the 1980 decennial census, which refers to 1979 wages. •SOURCES: 1980 Census; 2014 ACS; “Employment Growth and Labor Market Polarization,” Chapter 7, Ten-Gallon Economy: Sizing Up Economic Growth in Texas by Pia M. Orrenius Jesús Cañas and Michael Weiss, 2015.

15.5%

-10.7% -11.0%

6.2%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Lowest Wage Lower-Middle Wage Upper-Middle Wage Highest Wage

Percent Change in Share of Jobs by Wage Quartile in Texas 1979-2014

Over $26.40$16.61 to $26.40$10.61 to $16.60Under $10.60

The Shrinking Middle Class in Texas is Part of National Trend

•NOTES: Calculations include workers over age 15 with positive wages and exclude the self-employed. Quartiles based on the Texas and US wage distributions from the 1980 decennial census, which refers to 1979 wages. •SOURCES: 1980 Census; 2014 ACS; “Employment Growth and Labor Market Polarization,” Chapter 7, Ten-Gallon Economy: Sizing Up Economic Growth in Texas by Pia M. Orrenius Jesús Cañas and Michael Weiss, 2015.

13.4%

-9.2%-10.8%

6.7%

15.5%

-10.7% -11.0%

6.2%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Lowest Wage Lower-Middle Wage Upper-Middle Wage Highest Wage

Percent Change in Share of Jobs by Wage Quartile 1979-2014

U.S. Minus Texas Texas

There is Growing Need for Higher Education in the Economy

77%

36%

10%

28%

13%35%

0%

20%

40%

60%

80%

100%

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Texas Educational Attainment of Civilian WorkforceAge 25 and Older

High School or below Some college and AA Bachelor's and above

Source: Current Population Survey

“Opportunity Occupations” Exist in Every Local Economy

NOTE: Opportunity occupations are those that pay at least a median wage for that region and require less than a bachelor’s degree.SOURCE: Federal Reserve Bank of Dallas’ analysis of data from “Identifying Opportunity Occupations in the Nation’s Largest Metropolitan Economies,” by Keith Wardrip, Kyle Fee, Lisa Nelson and Stuart Andreason, Federal Reserve Banks of Atlanta, Cleveland and Philadelphia, Sept. 9, 2015.

26.1

15.5

30.1

17.6

25.7

25.6

19.2

14.6

21.5

15.9

21.0

24.1

53.8

68.3

47.6

64.9

52.5

49.8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

San Antonio-New Braunfels

McAllen-Edingburg-Mission

Houston-Sugar Land-Baytown

El Paso

Dallas-Fort Worth-Arlington

Austin-Round Rock-San Marcos

PERCENT

Opportunity occupation Higher wage, bachelor's required Lower wage, bachelor's not required

Ten Most Dominant Opportunity OccupationsIn Dallas – Fort Worth MSA in 2016

SOURCE: Center for Public Policy Priorities’ analysis of data from “Identifying Opportunity Occupations in the Nation’s Largest Metropolitan Economies,” by Keith Wardrip, Kyle Fee, Lisa Nelson and Stuart Andreason, Federal Reserve Bank of Cleveland, Sept. 9, 2015.

Watch Repairers, 170

Adhesive Bonding Machine Operators and

Tenders, 1,670

Transit and Railroad Police, 280

Loan Interviewers and Clerks, 13,000

Reservation and Transportation Ticket

Agents and Travel Clerks, 8,330

Insurance Appraisers, Auto Damage, 870

Occupational Therapy Assistants, 1,750

Radio, Cellular, and Tower Equipment Installers and

Repairers, 720

Avionics Technicians, 920

Aerospace Engineering and Operations Technicians, 5801

1.5

2

2.5

3

3.5

4

4.5

$15 $20 $25 $30 $35 $40

Loca

tion

Quo

tient

Median Hourly WageHigh school diploma with on-the-job training Postsecondary non-degree award Associate's degree

Ten Most Dominant Opportunity OccupationsIn Houston MSA in 2016

SOURCE: Center for Public Policy Priorities’ analysis of data from “Identifying Opportunity Occupations in the Nation’s Largest Metropolitan Economies,” by Keith Wardrip, Kyle Fee, Lisa Nelson and Stuart Andreason, Federal Reserve Bank of Cleveland, Sept. 9, 2015.

Rotary Drill Operators, Oil and Gas, 4320

Service Unit Operators, Oil, Gas, and Mining, 7880

Pump Operators, Except Wellhead Pumpers, 1280

Roustabouts, Oil and Gas, 7330

Petroleum Pump System Operators, Refinery

Operators, and Gaugers, 4530

Chemical Plant and System Operators, 3580

Chemical Equipment Operators and Tenders,

6130

Occupational Health and Safety Technicians, 1150

Wind Turbine Service Technicians, 750

Geological and Petroleum Technicians, 3840

0

3

6

9

12

15

$15 $17 $19 $21 $23 $25 $27 $29 $31 $33 $35

Loca

tion

Quo

tient

Median Hourly WageLess than high school High school diploma or equivalentSome college, no degree Associate's degree

Ten Most Dominant Opportunity OccupationsIn Austin-Round Rock MSA in 2016

SOURCE: Center for Public Policy Priorities’ analysis of data from “Identifying Opportunity Occupations in the Nation’s Largest Metropolitan Economies,” by Keith Wardrip, Kyle Fee, Lisa Nelson and Stuart Andreason, Federal Reserve Bank of Cleveland, Sept. 9, 2015.

Surveying and Mapping Technicians, 1,000

Eligibility Interviewers, Government Programs,

1,720

Glaziers, 650

Insurance Appraisers, Auto Damage, 350

Computer User Support Specialists, 7,710

Electrical and Electronics Engineering Technicians,

4,510

Civil Engineering Technicians, 1,410

Computer Network Support Specialists, 2,690

Web Developers, 1,870

Environmental Science and Protection

Technicians, Including Health, 510

0

1

2

3

4

5

6

$15 $17 $19 $21 $23 $25 $27 $29 $31 $33

Loca

tion

Quo

tient

Median Hourly Wage

HS Diploma with Moderate On-The-Job Training ApprenticeshipPostsecondary non-degree award Associate's degree