Austin’s economy is defined by what economists call the “Austin differential” – where Austin’s growth rate was marginally different from that of the nation. Austin’s job growth was at its peak around 2012-2013, when the United States was rocky in terms of job growth, unemployment rates, and real estate appreciation because of high taxes and heavy regulations on businesses at the time. But Austin didn’t feel this assault on the private sector.

In the city, job growth over the past 12 years has either been static or slow moving. Some companies are of the opinion that this is due to the tight labor market and the uncertainty about the political environment.[1]

Among the fastest growing metros, the Austin metropolitan area added 28,300 net new jobs, or 2.8%, in the 12 months ending in May, according to the job statistics released by The US Bureau of Labor Statistics. 

After adjusting the data for seasonal workforce patterns, the Federal Reserve Bank of Dallas said employers in southern Texas essentially reduced payrolls during the month — making the most cutbacks in almost eight years. [2]

Is Austin’s labor market in the danger zone?

Despite problems, Austin labor market is not collapsing. According to some analysts, Austin’s job growth is stronger than data suggests. But even if the data turns out precise, local employers still have expanded payrolls by 2.8 percent in the past 12 months, slower but better than previous years. 

The slowing could be due to the region’s tight labor market. In Texas, unemployment rates fell to 4.8 percent in May 2017 from 5 percent in April 2016, while national rate fell to 4.3 percent from 4.4 percent.

Caution, however, is in order. Strong unemployment rates in May 2017 resulted from people dropping out of the labor force – not from people unable to land jobs. The number of employed workers dropped by 0.6 percent.

While a slowdown is not unusual at time of the year as the school year comes to a close and there are employers who pause before putting out job ads. However, this level of drop in the labor force is unprecedented.[3]

Tech job growth dropping, healthcare on a high

A drop in professional, scientific, and technical services jobs corroborated the signs of slowing. The technical industry cut 1,800 jobs, a decline of 1.8 percent.

Austin’s high-tech scene has been hit hard in the middle of Texas’ competition to attract coding and programming skilled employees. The Greater Austin Chamber of Commerce said local tech firms have around 7,000 openings, but local schools are producing only about 1,000 I.T. graduates a year.

Regional health care and social assistance providers, however, are on a steady growth rate trajectory. Employers have grown payrolls by 5.6 percent over the past 12 months.

The healthcare sector has also helped create more middle-wage positions for workers with school-level education. Local hotels and restaurants added 500 positions in May, giving a boost to low to middle-wage jobs. In addition, manufacturers, construction firms, and other goods-producing employers expanded payrolls by 4.2 percent over the past 12 months.

Registered nurses are most in demand locally, with 2,760 listings. Also in high demand are personal care aides, nursing assistants, medical assistants, critical care nurses, medical record & health information technicians, physical therapists, and home health aides in the region. [3]

All about mobility

To fill jobs, you need people, and to fill Austin’s jobs, you need reasonable living costs for people. This is where Austin has taken a significant hit and it could be a reason why workers are moving out to look for cities with better living costs plus well-paying jobs to cover those costs.

Austin’s population is expected to accelerate in the coming years. Over the last 10 years, Austin’s growth rate of 37.7% has doubled in comparison to Texas’ average rate of 20.6%. A tight real estate market and high congestion rates worsen Texas’ case.  [4]

An influx of highly-educated professionals has led to a demand for service labor. But the rising costs of real estate and land development barriers have affected affordable housing. Among the other four major Texas metros, Austin has the most expensive average square foot rental costs.

While jobs and population have been increasing in Austin, the stock of affordable rental units has decreased. The demand for service workers cannot afford to keep up with the supply of people who need affordable housing.

Wages adjusted for housing rentals on a low

The rental costs have much to play in the wage situation in Austin. Due to an increase in demand for workers and the decreased supply of lower-cost rental housing units, the typical service worker suffers. Though a security guard in Austin makes $224 per month more than others in his profession across the state, he pays $200 more in rent every month. A 900-square foot apartment would cost a little less than $1,000 per month – and these are on the outskirts. [5]

Despite wages rising, employers are now struggling to fill service sector roles, given the lack of low-cost housing options. Building & grounds cleaning and maintenance workers have a bigger problem. Rent can be more than half of their annual income. Furthermore, since property maintenance costs are on the rise, rent prices are rising too. In Austin, a high wages does not necessarily mean better pay. It means higher living costs, that can make moving even less affordable.

Average hourly wage for key occupations[6]


Austin mean hourly wage

US mean hourly wage

Computer hardware engineers



Computer analysts



Registered nurses






Customer service



Construction laborers



Retail salespersons



Cooks, fast food



Despite a seasonal uptick in unemployment rates, Austin has much to look forward to in terms of job growth and the boom in healthcare jobs. Austin could be a job haven for both tech and infrastructure but what is hurting this city is an expensive housing market for reasons discussed above. Slowing job growth is merely a symptom – Austin has others problems to solve as well.