I just read an article on Monster.com that lists the best cities right now for job growth. Many of those cities are in Texas, with Austin ranking #1 on the list. The reasons cited are many, including a favorable business climate, technology initiatives, and collaboration between business and UT (University of Texas).
Overall, Texas is the only state in the entire country experiencing job growth. Why? It is a conservative, fiscally responsible state with a diversified, business-friendly economy.
But everyone wants to live in Austin, because aesthetically it is a very beautiful city. Located in the Hill Country of Central Texas, Austin offers rolling hills, trees, lakes, deer, and beautiful landscaping.
I lived in Austin for 12 years, from 1996 to 2008. Today I live in Houston. When people in other parts of Texas think of Austin, the first thing they ask me is “Oh, it’s so beautiful, how did you get to leave?” But that’s just a cursory view, and I’ll tell you why, as well as why you can actually No to be the best city in the nation for job growth, all based on first-hand knowledge and experience.
With a population of less than 1 million, not counting the Austin metropolitan area, Austin qualifies as a mid-size city. It also happens to be the capital of Texas. Like most state capitals, Austin is not a major city. It’s a quaint college town. Unlike Houston, there is no real industry in Austin; The top three employers are: 1) the state of Texas, 2) the University of Texas, and 3) the high-tech industry, which includes Silicon Valley companies and Internet startups.
In Austin, wages are low and prices are high. Why is this? Well, first of all, the State is one of the largest employers, and historically, the State is a low-wage entity. Second, Austin is not only the capital of Texas, it is also a college town, and therefore the market is flooded with highly-skilled college graduates willing to work for anything just to stay in Austin. You can forget about negotiating a job offer because unless you accept the salary offered, chances are there are at least 20 or more highly qualified candidates lined up right behind you who are willing to take the same job.
These two factors combine to suppress wages across the board. On top of that, the state caps salaries (just like any government job, because of the pay scale), and employers in the high-tech sector (Dell, FreeScale, AMD, etc.) are continually laying off and downsizing so your job is always in danger. When we lived there, I knew a lot of people in high tech who were constantly looking for a new job or switching from one company to another.
In the early 1990s, a large wave of high-tech companies from Silicon Valley opened manufacturing facilities in Austin, contributing to job growth. People moving from other states laughed at how cheap it was to buy a house compared to California, and prices went up. Today, real estate in Austin is overvalued. On top of that, it is the most expensive city in Texas in terms of cost of living. Everything (restaurants, groceries, gasoline, dry cleaning, you name it) costs more and adds up. Property taxes are also higher. So over time, Austin has become a city of low wages and high prices.
People laugh in disbelief when I say it, but Austin is still a small city in many ways. Many of the people who live there originally come from smaller towns in other parts of Texas: primarily Del Rio, Victoria, Corpus Christi, and Wichita Falls, so for these transplants, Austin is a “big city.” Also, Austinites don’t like outsiders and unless you’re a member of a certain “group”, that is. a UT graduate, politically connected, or Austin native will find many doors closed.
Take my brother-in-law, for example. He has lived in Austin for over 10 years and worked as a vice president for a non-profit organization. He was ready to take on more responsibilities, so he applied for a job as CEO of another organization, but didn’t get the job. Instead, he was offered to the sister of a local politician. So even though my brother-in-law was the most qualified candidate, he was not the most politically connected candidate. While I realize that this type of thing can happen anywhere at any time, for some reason it is more prevalent in Austin.
The brother of another friend of mine moved to Austin from Oklahoma City. Lawyer, he fought to start his private practice. As an outsider, he couldn’t do any business in Austin and ended up moving back to Oklahoma. These are pretty typical examples, and just go to show that people and place matter.
As a city, Houston has a lot to offer. First of all, people are much more open and accepting of newcomers. It’s much easier to settle down and make friends and/or business connections. Second, there is so much more to do, in terms of entertainment, and the cultural scene is second to none for live theater and a world-class Museum of Fine Arts. Houston is also a city of high-paying jobs and a lower cost of living, especially when it comes to real estate, so your money goes a lot further than in Austin. And I’ll let you in on another little secret: there are places in Houston (The Woodlands) and other parts of Texas that are just as beautiful as Austin!
So the place does matter. Particularly when you are starting a business. Austin versus Houston? I’ll take Houston any day!