Houston’s Unemployment Rate Rises Despite Overall Job Growth in the US

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As of September 2017, unemployment rates in Houston stood at 5.2%. The numbers look marginally better than September 2016, where unemployment rates were pegged at 5.7 [1] Texas is a low tax state and it continues to soak up jobs from high tax states such as California and New York as somewhat just insinuated, for instance.

The unemployment rate was pegged at 5.1 percent in June 2017, up from a revised 5.0 in May 2017, but below its year-to-date average of 5.4 percent. The June 2017 unemployment rate was 4.4 percent in the US and 4.6 percent in Texas. [1]

Job losses were severe in three key industries: construction, civil and heavy engineering, and the trades. Trade, transportation, and utilities, Houston’s largest employee categories, lost 4,600 jobs from July 2016 to July 2017. Annual job losses occurred in all three of these industries: wholesale trade, retail trade and transportation, warehousing, and utilities. [2]

Rebound Begins for Manufacturing after 2-Year Decline

Manufacturing employment in Houston rose by 12,900 from July 2016 to July 2017, marking the fourth consecutive month of annual job growth, after 24 months of annual decline. Both the durable and non-durable manufacturing industries had employment increases over the year. The local area’s rate of manufacturing job growth was at 5.8 percent compared to the national gain of 0.6 percent. [2]

Coincidentally, Wal-Mart plans to open three super-stores, Target is expected to open two, and Costco is expected to open one. This could mean a boost in the manufacturing sector. [3]

Recent June 2017 data was relatively positive. The business index expanded at its historical average pace, employment growth was very strong, and job ads continued to climb. Construction data were less optimistic and commercial activity and construction employment were down.

Harvey is Going to Change Everything

With commercial construction activity still in decline and the petrochemical construction boom beginning to wind down, the outlook for construction jobs in Houston remains weak but this has to change right? With the onslaught of hurricane Harvey, this area is begging for laborers, electricians, plumbers, construction workers, so all these numbers are about to increase. This area is begging for skilled and unskilled employees to help deal with this mess.

On top of this, Houston is going to have to do what New Orleans did (after Katrina) and change how they handle flooding. This is going to lead to all types of infrastructure related jobs but because of this uncertainty and past floods as well, some Houstonites may accept their insurance money and take off for higher ground.

As of May 2016, for construction workers, the hourly mean wage stands at $23.51. For workers involved in installation, maintenance, and repair, the hourly mean wage is $22.45. For manufacturing and production, the hourly wage is pegged at $17.88. For transportation and material moving, the hourly wage is sitting at $17.34. [4]

The oil and gas industry show heavy job losses, as Houston’s unemployment rate topped the US average for the first time in nearly a decade, according to state data released in June 2017. The local economy, meanwhile, generated just 10,000 jobs over the year that ended in April, a growth rate of just 0.3 percent, compared with 1.6 percent in Texas and 1.9 percent nationally. Houston has not exactly been pro-growth or pro-business like Texas has so that could be one of the reasons those numbers read like this. Houstonalso has future flooding concerns that it needs to now cope with.

There is a surge, however in hiring energy field workers. 6,000 new jobs were added, demonstrating that there is definitely hope for Houston’s employment rate but as already stated, Harvey is going to change everything for at least a couple of years.

There was a big decline in trade, transportation, and utilities. This could possibly be attributed to many customers choosing to buy online. [5]

Oil and Polymers Hit in Wake of Harvey

Short of almost 37,400 employees, the coastal region from Brownsville, Texas to New Orleans is feeling the pressure. Along with this region, Houston handles around 40 percent of the petrochemical infrastructure in the United States. Companies resort to bringing in workers from other regions and have to provide travel allowances. This significantly drives up project costs.

The Exxon plant in Baytown, at the Houston Shipping Channel, was shut due to the hurricane. This has badly hit employment and productivity. [6]

As a result, polymer and chemical businesses have suffered. Ethylene, a key raw material for tires, fabric, and bottles, comes from oil. These industries are primarily concentrated along the coast of Texas. Prices for ethylene are rising, workers are losing jobs, and materials are not being delivered on time – a triple whammy for manufacturers to deal with.

When Customer Service Came to the Rescue 

At least 54,880 people are employed in the customer service sector across Houston. The city has one of the highest numbers of customer service representatives in all metropolitan areas in the United States. The mean hourly wage is pegged at $16.80 and annual wage at $34,940. Most customer service representatives in Houston work in business support services, wireless telecommunication, and electronic shopping. [7] But the arrival of Hurricane Harvey disrupted many establishments that were known for prompt customer support.

Employee safety became the overriding concern the day Hurricane Harvey hit Texas. Customer service employees were encouraged to work from home provided they had an Internet connection. In the midst of chaos, UPS and FedEx continued to take calls and deliver packages on time. This was the time for customer service representatives to really step up and deliver.

Teladoc, Aetna’s telehealth provider, offered hotlines for the public to use. Healthcare customer services set up a separate hotline primarily to assist with emergency care.[8] AXA’s network insurance companies helped by extending the grace period for cancellation of policies for non-payment of premiums – and none other than customer service providers played an important role here as well. [9] When it came to the Hurricane, customer service became a pivotal lifeline.

The most notable effort to employ customer service pros en masse came from FEMA – the Federal Emergency Management Agency. FEMA highlighted the importance of customer service employees by saying that they will “serve as the primary point of contact for persons inquiring about disaster assistance. Duties include assisting disaster victims, processing claim requests for disaster assistance, and providing information regarding available programs to individuals applying for disaster assistance.” [10]

Eventually, the calm after the storm is bound to see construction and repairs in full swing, which could even trigger an economic and employment boom. Until then, Houston counts on hope and resilience.

 

Sources:

  1. https://www.dallasfed.org/research/indicators/hou/hou170801https://www.bls.gov/regions/southwest/summary/blssummary_houston.pdf
  2. https://www.bls.gov/regions/southwest/news-release/areaemployment_houston.htm
  3. http://www.houstonchronicle.com/business/retail/article/Houston-retailers-plan-rapid-expansion-in-2017-10851660.php
  4. https://www.bls.gov/regions/southwest/news-release/OccupationalEmploymentandWages_Houston.htm
  5. https://www.houstonpublicmedia.org/articles/news/2017/06/16/205081/texas-unemployment-rate-drops-slightly-houstons-rate-higher-than-state/
  6. https://www.usatoday.com/story/money/2017/08/28/harvey-deals-blow-houston-key-gear-u-s-economic-engine/609798001/
  7. https://www.bls.gov/oes/current/oes434051.htm#ind
  8. https://news.aetna.com/2017/08/help-for-those-affected-by-hurricane-harvey/
  9. https://us.axa.com/customer-service/hurricanes-harvey-and-irma.html
  10. http://time.com/4921632/hurricane-harvey-fema-jobs/
2017-10-29T21:19:03+00:00employers, Houston|0 Comments

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