Texas Needs Nerds

How a shortage of high-tech workers is transforming our state.

Need a job? if you’re a techie in Texas, you’re in clover. That’s because there is a worldwide shortage of technically skilled workers, and Texas is brimming with vacant jobs. But happy techies are only part of it. In fact, the skilled-worker shortage in Texas is now transforming the state more than any other single economic factor. It not only accounts for sky-high wages in the technology sector but also for growing income inequality within major Texas cities and between cities and the rest of the state. It is causing explosive growth in a few areas and stagnation or decline in many others. In short, the “talent wars” created by the intense demand for tech workers are creating winners and losers in Texas.At bottom, it’s a simple problem of supply and demand. The U.S. needed about 1.6 million information-technology workers this year, but half of those jobs will go unfilled, according to a study done by the Information Technology Association of America. Texas has 34,000 of those vacant tech jobs—a remarkable shortfall that has caused companies here to pay unprecedented salaries, especially to young workers. The average salary of Internet workers is a stunning $84,700 and climbs to more than $100,000 when benefits and bonuses are factored in, according to a report by Texas’ Advisory Council on the Digital Economy, which Lieutenant Governor Rick Perry assembled in 1999. Though the dot-com shakeout this past spring produced a lot of layoffs, workers with core skills, like programming and computer network administration, were rapidly absorbed by growing firms. As the Austin band Timbuk 3 once sang, “Fifty thou’ a year will buy a lot of beer.” Double that will get you the BMW and the boat.

The boom in high-tech employment is reshaping the demographics of Texas too, as people (and their money) relocate to areas where tech rules. Cities with lots of high-tech jobs are busting at the seams—Austin is the second-fastest-growing city in the U.S. now, after Las Vegas—while rural areas of Texas are experiencing a brain drain as smart and talented young people move to where the money is. And nowhere is income inequality growing faster than in areas where there is a lot of high-tech industry. In Austin, for example, the affordability of housing has become one of the hottest political issues, as highly paid tech workers drive up the cost of living. Most other Texas towns have the reverse problem: They are forced to watch from the sidelines, wondering how to get on the high-tech gravy train.

There are no easy or simple solutions to the workforce-shortage problem. One controversial measure recently passed by Congress will increase the number of skilled foreign workers allowed into the U.S. under the federal H1-B visa program. Perry’s Advisory Council has proposed a variety of programs to improve math and science education in Texas public schools. The U.S. Department of Commerce has called for ways to improve the image of technology workers, to shed the stereotypes of the geek and the nerd that turn off many young people.

Because demand for core technology workers is expected to more than double in the next five years, compared with an expected average growth rate of only 14 percent for all other fields, the worker shortage isn’t going to go away soon. Texas is in better shape than most other states, with the second-biggest concentration of technology workers after California. Still, to prevent the state’s economy from stalling, Texas will need to do everything possible to make sure it is a place techies want to work and live. That imperative, in turn, is likely to influence Texas politics and the state’s evolving character for years to come.

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