Covid Makes Austin a Magnet for New Jobs

Mish

Texas’ capital is attracting corporate jobs and remote workers, lured by lower costs and lower taxes

Austin a Magnet for Jobs

In the winners and losers category, Austin, Texas is Among the Covid Winners for job creation.

Texas’ capital is attracting more corporate jobs and remote workers than ever before, lured by lower costs and lower taxes. Business relocations to Austin announced this year are expected to create nearly 10,000 jobs. That is the city’s highest figure on record for a single year, according to the Austin Chamber of Commerce, and is helping offset the hit from Covid-19 to the city’s tourist-dependent restaurants, bars and music venues.

It helps that Texas has no state income tax, that Austin winters are relatively short and mild, and that social distancing is easier in a city where homes tend to be roomy and many have backyards. Austin has also managed to remain cheaper than San Francisco, Brooklyn and Manhattan by building tens of thousands of apartments over the past decade.

“It’s just a whole lot easier to hire. It’s a lot easier to get housing. It’s a lot easier to get business licenses than it is in other places,” said Greg Schwartz, chief executive of real-estate startup Tomo Networks. His company, based in Stamford, Conn., is preparing to open a co-headquarters in Austin.

Low Taxes Attract Companies and People

Contrast Texas with Illinois. The Illinois solution is five fold.

  1. Higher personal taxes
  2. Higher corporate taxes
  3. Higher property taxes
  4. Higher sales taxes 
  5. Higher taxes disguised as fees

Illinois Exodus

The Illinois Policy Institute says BLAME ILLINOIS EXODUS ON JOBS, HOUSING, TAX POLICY

Illinois lost more than 850,000 residents to other states during the past decade, causing the state’s population to shrink for six consecutive years and suffer the largest raw decline of any state in the 2010s.

According to U.S. Census Bureau data released June 25, the white population shrank by 5.3%, or 438,986 people, and the Black population declined by 1.7%, or 32,143, since 2010. 

Feed the Public Pensions

 Illinois needs higher taxes to feed its broken pension system.

Illinois is the “least friendly” total state and local tax burden for the middle class, according to personal finance site Kiplinger.

It has the largest raw population decline over the past decade, with the high state and local tax burden the most common reason residents say they want to leave.

Illinois is Pension Crisis Ground Zero

For discussion of the plight of Illinois and all such states beholden to public unions, please see Illinois Is Ground Zero for the Pension Crisis

Symptom vs the Problem

The pension crisis is not the problem, it is a symptom of the problem.

The true problem is decades of corrupt politicians getting in bed with corrupt public unions. 

Dead on Arrival

Given that Republicans held the US Senate, a state bailout and Biden's Progressive Agenda is Dead on Arrival in January.

Time is running out for Illinois.

Mish

Comments (38)
No. 1-20
Eddie_T
Eddie_T

A little ray of sunshine in an otherwise dark and dreary time.

Austin was already set to explode, with Apple building a huge new campus here already (including a hotel onsite).....and Tesla working very quickly to get the new truck (and battery?) factory going, the last few months.

Anybody wanna buy my ranch? I have to pay back my bailout.

njbr
njbr

Can't stand the heat, so I'll stay out of the kitchen.

But going to Bolivar in the spring...

Lance Manly
Lance Manly

Funny, Austin was always the Boston of Texas.

Mr. Purple
Mr. Purple

How To Turn A Red State Blue 101

Rbm
Rbm

Haha Short mild winters translates into brutal hot summers

Casual_Observer
Casual_Observer

I grew up in Texas and left in the late 1990s. Texas now has rapid uncontrolled growth similar to California or New York in the 1980s and 1990s. My acquaintances in Dallas, Houston and Austin commute longer than an 1 hour each way when they do have to go to work, which is more often now than it was a few months ago. Quality of life was miserable in Texas when I left. I can only imagine what its like now. My commute to work here in California is about 3 minutes. My kids school is 10 minutes away and my house is worth 50% more than what it was when we bought in 2011. People complain about high taxes or regulations here but I always saw too much growth in California back in the 80s or 90s, which is now more sustainable as people leave. My area is has 50% more population than 10 years ago. You have to make good money to live almost anywhere in California but it is getting more sustainable as some people leave. California and New York always have international people with money coming in. This is also a huge factor that doesn't account for migration. Texas is a middle class existence with traffic to go with it no matter where you go. It is the large employers/employees state with all the traffic to go with it. You can also have low quality housing, tornadoes and hurricanes to go with it. I grew up in that so I know. Texas is all about quantity not quality.

Casual_Observer
Casual_Observer

Mish - Illinois has been a walking zombie for years. In fact the entire midwest is just a zombie economy left behind by globalization. Pittsburgh may be the lone exception.

BobSmith
BobSmith

There's some nice places in Texas but overall not the place I would prefer to live. Sprawling, urban congestion and ridiculous property taxes. Not to mention, it's now a swing state. Bush won it by over 20 points, McCain by 12, Romney by 16, Trump by 9 and 5.5 in 2020.

PreCambrian
PreCambrian

Austin is probably the best of both worlds. You get to have relatively open minded neighbors in a Democratic county with the low taxes of an extremely conservative Republican state. It doesn't surprise me that they would attract people from out of state.

Realist
Realist

In case anyone cares about Texas Public Pensions:

Funding Ratios of Texas Public Pension Plans end of 2018

TCDRS 89.1%

TMRS 87.4%

TESRS 80.2%

TRS 80.5%

JRS II 90.8%

ERS 70.1%

LECOS 66.0%

Eddie_T
Eddie_T

"Contrast Texas with Illinois. The Illinois solution is five fold."

  1. Higher personal taxes

Correct. Texas has no personal income tax.

  1. Higher corporate taxes

In either (or any) state there is a federal corporate tax of 21%. There is no additional corporate tax in Texas.....but Illinois has a state corporate income tax of 5.25 and an additional 2.5% “replacement tax" whatever the F that is.... so a total of 28.75% .

  1. Higher property taxes

Correct...but only because IL property taxes are off-the-charts......at (county tax rate) 2.89% (avg).....(more than 2X the national avg).

Texas property taxes are high-ish too, at (avg county rate) 1.80).

Property taxes are what fund schools in Texas. Some few public schools in Texas are good...most aren’t. Not sure about Illinois. But I think people blame schools too much for the poor education level....I say you can lead a horse to water, but.....

  1. Higher sales taxes

Combined sales tax in Chicago is 10.25%. Austin is 8.25%...Both are high. The state portion is 6.25% in both cities.....cities in both states are allowed to tack on a little more.

  1. Higher taxes disguised as fees

We have that too...but my son lives in Chicago... and I think Illinois does beat Texas on that stuff....but we’re catching up. I can remember when most licenses and fees in Texas were fairly nominal...not anymore.

njbr
njbr

Texas is absolutely the hottest and most insufferable state in the entire nation. Forget about Death Valley, Arizona, Nevada, Florida—none of them measures up. Texas alone has the right to be known as Number One, the worst.

This distinction has not been established merely by consensus or legend, but by scientific investigation. The proof may be found right on page 50 in a little text called Environmental Physiology, a book written by and for doctors who study how we adapt—or fail to adapt—to things like climatic conditions. I quote with italics added:

A review of worldwide effective temperature data for summer reveals that the Red Sea and the Indus Valley are the worst. In the United States the lower Rio Grande Valley and a section of the Gulf Coast are worst. These values are even worse than those for typical tropical areas, such as Devil’s Island in Guiana.

There you have it—even worse than Devil’s Island. A summer more sweltering than a tropical island’s. And that’s in terms of “effective temperature,” which is not simply the reading on a mercury thermometer, but an index that takes into account humidity and air movement as well—similar to the chill factor which combines the effects of wind and temperature. There are a handful of other similarly sophisticated indicators—the discomfort index, the temperature-humidity index, desert equivalent temperature—all of which add up to the same conclusion: Texas, all climatic factors considered, is unquestionably the hottest.

Just how hot? Well, along the Rio Grande, we’re talking about an average —that’s day and night—desert equiva­lent temperature* of 102° Fahrenheit every summer.

Rbm
Rbm

The way ive always looked at it. Its all proportional. How much you make an hour verses how much it cost to live Taxes are taxes the govment gonna get theres one way or another. Cities grow and become more expensive / homeless /drugs etc. wait till elon gets busted for weed.

PecuniaNonOlet
PecuniaNonOlet

A few years ago, Austin has a major draught and there was serious doubt if it could continue to support growth given the water problems. With climate change, I suspect Austin will continue to turn into a desert. Ironically, all the bashing of Illinois, it happens to be near a huge body of fresh water.

Didnt I read somewhere, Wall Street is starting to trade water futures?

BobSmith
BobSmith

I don't understand why big American cities are garbage? Prague, Warsaw and Belgrade are all large with all major amenities yet they are fairly well organized, clean, low crime etc.

Dodge Demon
Dodge Demon

Mish,

Those two Republicans in the Georgia US Senate runoff will lose. The real conservatives will sit that one out. Better to let the RINOs go extinct. I prefer the FSA any day, no pretense with them.

You know who was on the other side of that phone call where Illinois Governor Blago was saying “this thing is f-ing golden!” (Filling the Obama Senate seat)? That would be current Governor Fatso. Don’t expect the FBI to take down that corrupt blimp.

Austin does not have way kewl places like the Ann Sather Restaurant. It’s run like a speakeasy to circumvent the COVID restrictions by Governor Fatso and Mayor Lootfoot. Go to the back door and tell ‘em Alderman Tom Tunney sent you, ask for the “sticky buns”. That’s the password.

Rhet
Rhet

Are taxes actually lower in Austin? I ran the numbers and when you add in high property taxes in TX and weigh them against high income taxes in CA it's basically a wash.

Eddie_T
Eddie_T

As someone already reported on another thread, Oracle announced yesterday they are moving their headquarters to Austin.

Eddie_T
Eddie_T

Larry Ellison won’t be moving to Austin. He’s going to continue to work from home....He owns Lanai, pretty much. One of those islands we call Hawaii.

He likes islands, apparently. He used to own a house on a private island adjacent to Tortola, BVI. It was for sale for $50M...not sure if it sold or not.


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