Growing Jobs in Texas is a Team Effort

by Bryan Daniel, Commissioner Representing the Public, Texas Workforce Commission

April marked the sixth consecutive month the state of Texas set a new record for total payroll jobs. Before this streak, the previous record was February 2020, when Texas had 12.9 million payroll jobs. Today, we have about 13.2 million.

When we add those payroll job totals to the other types of employment, the overall Texas labor force now stands at 14.5 million people, an all-time high, and 3.7% percent larger than our pre-pandemic total in February 2020. The 6-month streak that started last November marked our official net recovery from jobs lost resulting from the pandemic. Texas was the third state to recover the net jobs lost (Utah and Idaho were the first two).

Considering the Lone Star State saw a decrease of 1.4 million jobs during the early months of the pandemic, this record-setting job growth puts us back on the growth trend we saw prior to COVID-19. Since the beginning of this year, Texas employers have created 178,200 net new jobs. Since 2001, Texas’ labor force has grown by more than 38%, which is more than triple the growth rate of the other 49 states.

Although we see headlines about labor shortages or mass resignations, the Texas Labor Force Participation Rate has returned to prepandemic levels as well. The March rate stood at 63.4%, a full percentage point higher than the national rate, and equal to February 2020 (the last pre-pandemic month).

With net increases in employment, Texas is paying unemployment benefits to fewer claimants than we saw immediately prior to the pandemic, in February 2020. For example, in the first two weeks of May 2022 around 70,000 claimants received unemployment benefits, 38% less than we saw during the last two weeks of February 2020.

Despite having fewer Texans receiving benefits payments, the Texas unemployment rate sits at 4.3%, which is higher compared to our February 2020 rate of 3.5%. Considering the unemployment rate is a self-attestation an individual is unemployed, but looking for work, this slightly elevated rate indicates the state has opportunities to continue to grow the workforce.

Not only have we seen overall growth in job creation, Texas continues to see net growth in job postings as well. In fact, we’ve seen an increase of 30% in job postings over the last year, with somewhere between 600,000 and 700,000 job opportunities in the state right now.

When we look at the job positions with the most vacancies, we find a list that looks just like the pre-pandemic list. Healthcare (specifically nursing and related jobs), general sales reps, customer service reps, retail sales and computer programmers top the list.

Of course, there are other vacancies as well. Statewide, the Accommodations and Food Service sector continues to report unfilled job vacancies and staff shortages. These shortages are real, but they don’t align with the popular narrative on the reason. Jobs in the Accommodations and Food Service sector have surpassed the pre-pandemic level by 3,200 jobs. Meaning, the sector has regained more than the nearly a million jobs lost during the pandemic. That fact, coupled with other economic measures, would indicate some of the shortages are due to both competition for employees and overall workforce expansion.

As we’ve looked at the growth in the top jobs with vacancies, the Texas Workforce Commission (TWC) has noted the presence of a skills gap. A skills gap means there are jobs where not enough potential applicants have the skills necessary to fill all the jobs immediately. A good way to describe the skills gap is this: right now, there are about 621,000 unemployed Texans and more than 650,000 listed job openings. Based on those numbers, no one should be unemployed, and the state should have no job vacancies. The reason those jobs don’t get immediately filled with those job seekers is because those jobs likely require skill sets those particular job seekers don’t currently have.

One of many services TWC and their Workforce Solutions partners offer to employers, job fairs offer an opportunity for local businesses to connect with available talent.

The skills gap is particularly noticeable in middle skills jobs. By definition, middle skills jobs require some training after high school, but don’t require a university degree. Examples of middle skills jobs include electricians, patient care technicians, plumbers, IT specialists, mechanics and more. Although we classify them as middle skills, these jobs can often be high wage, some providing a 6-figure salary.

Middle skills jobs represent more than half the jobs in the state, but only about 45% of Texans have middle skills training. Like the other trends we’ve explored, this middle skills gap started well before the pandemic. Closing the skills gap is important both long term and short term to ensure Texas continues to see increased job growth and employer participation.

A key tool to address the middle skills gap will be upskilling and reskilling opportunities for the Texas workforce. The Texas Workforce Commission (TWC) continues to focus on these opportunities.

TWC’s Skills Development Fund provides a good tool for employers to use to reskill employees or upskill new hires. Working with a community college or other eligible applicant, an employer can develop a customized training program. The state has facilitated training for 32,000 employees with a $58 million investment in the last three fiscal years using the Skills Development Fund.

Additionally, the Jobs and Education for Texans program provides funds for public schools and community colleges to upgrade career and technical education facilities to provide students with access to the equipment necessary to learn the current technology they’ll use on the job. TWC has invested $23 million in 106 schools in the last three fiscal years.

Particularly for middle skills jobs, TWC’s apprenticeship programs provide employers with an opportunity to establish a sustainable workforce pipeline, especially for jobs with more comprehensive credentialling or licensing requirements. The TWC program provides a way for the state to assist employers and apprenticeship providers with the classroom instruction portions of a registered apprenticeship program. In the last three fiscal years, TWC has invested $19.4 million into this instruction for more than 27,000 apprentices.

In addition to the work TWC is doing, high schools, community college, technical schools and employers are all providing upskilling and reskilling opportunities. TWC works with those institutions along with the Texas Education Agency and the Texas Higher Education Coordinating Board to maximize the state’s resources to accomplish this task.

Upskilling and reskilling aren’t the only tools we will need to eliminate the middle skills gap in Texas. TWC has also invested in 15 projects to address the middle skills gap in diverse ways. Examples of TWC’s Middle Skills Initiatives that are currently in progress include a career pathways app for students and job seekers to learn about available positions in a format that’s intuitive and timely, as well as career coaching that provides free access to one-on-one support for those looking to take advantage of the state’s rewarding career opportunities.

TWC awarded a Jobs and Education for Texans grant to Rosebud-Lott ISD to purchase robotic equipment for automated manufacturing training.

As the Texas workforce continues to build more skills, they will certainly build more opportunities for better work. That, too, creates some of the mismatches between open jobs and available workforce. The situation many in the media dubbed “The Great Resignation” was, in reality, an example of the workforce maximizing their skill sets to secure higher paying or more flexible jobs. The so-called “Great Resignation” wasn’t about quitting; it was actually about better employment opportunities. Workers have to leave one job to take a better one.

Many of the tools used to mitigate the middle skills gap will also help ensure Texas employers have the skilled workforce they need to backfill vacancies and create new positions.

Some of the staffing challenges aren’t related to workforce skills or better jobs, either. Job creation in Texas isn’t always dispersed statewide. Part of the reason for that is 56% of the Texas population lives in ten counties, and 87% lives in the area bounded by Interstate 35, Interstate 45, and Interstate 10. Which means there can be a concentration of jobs in one particular area. For example, rural areas have seen 2.5% job growth since 2011, while the overall job growth statewide was 25% over the same period.

Job creation happens in local communities, based on the needs of the employers in that community. TWC works with local chambers of commerce, economic development organizations and our 28 local workforce boards to ensure those local needs are met. In the final analysis, I think you’ll find, local leaders, using the available resources, can provide meaningful help to ensure employers can create and fill those jobs.