Measuring the Untapped Job Potential in Austin, Tampa, and Binghamton Using Shift Share

EMSI is introducing a shift-share model that helps economic development organizations get a quick grasp on the industries driving their economy and the industries holding their economy back. This analysis shows applications of the new model. We’re hosting a webinar that will walk through the model on Oct. 9 at 2 p.m. EDT (11 a.m. PDT). Sign up here.

How healthy is the Tampa-St. Petersburg economy? If you judged based purely on job growth, you would say it’s doing okay—slightly better than average, at least. From 2009 to 2014, employment in the Tampa metro, a four-county region that includes Clearwater and Largo, has increased 5.2%, a few ticks higher than national job growth of 4.9%.

But zero in on the untapped job potential in Tampa-St. Pete, and you’ll see that the Florida metro could have tens of thousands of additional jobs—and a job growth rate more than twice its actual percentage since the Great Recession if its underperforming industries had followed national trends.

We can quantify the unrealized jobs and earnings in any region with a new shift-share model from EMSI, which allows economic development professionals to quickly contrast potential job growth against actual job growth. The model, based on a regional analysis method called shift share, sorts through more than 1,100 detailed industries so you can explore competitive industries (the ones outperforming national trends) and non-competitive industries (the ones that warrant attention because they’re underperforming).

For this analysis, we compared Tampa with Austin, Texas, and Binghamton, New York, to look at three metro areas with stark differences in their post-recession economic performance. Austin’s job total has swelled 17% since 2009, helping it realize 82% of its potential job growth over that time. Binghamton sits at the opposite extreme: its employment base has shrunk -6% (the most of any metro with at least 100,000 jobs in 2009), far below its potential growth of 8%. And as we mentioned earlier, Tampa has done all right but has reached only 41% of its job potential.

Tampa-St. Petersburg: Slightly Above Average

The Tampa-area labor market has a number of bright spots. General medical and surgical hospitals have added nearly 3,000 jobs since 2009. Jobs at offices of lawyers are up 14% (almost 2,000 new jobs). Post-recession growth in resident-serving industries like supermarkets and restaurants has been massive.

All told, the Tampa metropolitan area has picked up 63,000 jobs (5.2% growth) since the start of 2009. But EMSI’s analysis revealed that Tampa could have grown by another 93,000 jobs if its underperforming industries had merely done as well as they had nationwide. Those extra 93,000 jobs would bring in $4.8 billion in total earnings to the region.

Most of Tampa’s non-competitive industries are mid- to low-paying sectors. But an even greater share of the metro’s competitive industries (230 out of 267) also falls into the mid- to low-wage category, a potential cause for alarm for local developers. Just 37 out of 267 competitive industries are high-wage ($75,000-plus in total earnings).

Non-Competitive Industries

Tampa has especially lagged in two business-support industries: temporary help services and professional employer organizations. Both have lost out on more than 10,000 potential jobs the last six years.

We’ve written about the dramatic reduction of temp jobs in Tampa, a trend projected to continue through 2018. But the decline in professional employer organizations—an industry composed of businesses that provide HR and personnel management services—is even more noteworthy.

Professional employer organizations have gone from more than 95,000 jobs in 2001 to about 1,300 jobs in 2014. The industry has been all but wiped out in Tampa. From 2009 to 2014, it has lost 90% of its jobs in the region (and 68% of its jobs in Florida), making it the metro’s second-most non-competitive industry compared to national trends.

Temp jobs in Tampa, meanwhile, have only declined 0.7% since 2009—but that’s compared to 56% growth nationally. If the industry had followed national trends, Tampa would have 11,500 more temp jobs.

Competitive Industries

The unrealized potential in temporary help and professional employer organizations, along with electronic shopping and a few other industries, is the bad news. But the good news? Tampa has several large, high-paying overperformers.

The most competitive industry since 2009 in Tampa has been corporate, subsidiary, and regional managing offices—which has grown by 6,000 jobs (a 36% spike). That’s 3,300 more new jobs than we’d expect given national trends. Corporate managing offices pay on average $93,108 per job, and there are almost 23,000 of these jobs in the Tampa area.

Hospital and law offices have also been very competitive, adding over 2,000 more jobs than had ben expected. And among low-paying industries, telemarketing bureaus (which probably shouldn’t be the cornerstone of an economic development organization’s strategy) have been the most competitive with 70% growth in Tampa (compared to national growth of 19%).

Austin-Round Rock: Way Above Average

At 17%, Austin-Round Rock has made the biggest jump in employment among large metros since 2009. It’s added just over 138,000 jobs over this time—a total that would have been 30,000 higher if its relatively few underperforming industries had kept pace with national trends. Those 30,000 jobs would have added another $1.8 billion in earnings.

Let’s put that earnings figure in context. Remember, Tampa is missing out on $4.8 billion in potential earnings, and Austin has more twice the number of high-paying competitive industries (78 to 37). Austin also has a large base of solid mid-paying industries that are outpacing national trends—176 compared to 61 non-competitive mid-paying industries. In fact, competitive industries far outnumber non-competitive industries in every wage category.

Competitive Industries

The most competitive industry in Austin is also one that has added the second-most jobs from 2009 to 2014: custom computer programming services. Austin is well-known as a tech hub (see a summary of the region’s tech ecosystem), and customer computer programming has more than doubled its job total since 2009, going from 8,200 jobs to 16,600. Those 8,400 new jobs are almost 6,400 more than expected based on national trends.

Tech-related manufacturing industries in Austin are outpacing national trends as well. This includes computer and computer peripheral equipment and software merchant wholesalers (19% growth; 3,100 more-than-expected jobs); semiconductor manufacturing (28%; 2,500 more than expected); and printed circuit assembly manufacturing (507%, 2,395 more than expected).

Growth in the tech sectors is pushing important sections of the resident-serving economy: elementary and secondary schools (5,407 more jobs than expected) and local government (3,094) are also growing in Austin while stalling or declining nationally. This push vaults both of these industries into the competitive industry list.

Non-Competitive Industries

Local government industries are doing better than expected in Austin. But state government industries top the list of the most non-competitive, led by colleges, universities, and professional schools (which declined 5%, a loss of 1,500 jobs, though it was expected to gain 1,500 jobs).

And while “hard” tech industries are doing well in Austin, there are others (such as bare printed circuit board manufacturing and electronic computer manufacturing) that are leaving potential jobs on the table.

Binghamton: Way Below Average

The numbers across the board aren’t pretty for Binghamton: 6,700 lost jobs since 2009, a 6% drop, and a 2% reduction in population. But had the region followed national trends across all of its underperforming industries, its labor market (and perhaps its population base) would look far different.

How different? Instead of a 6% decline in jobs, Binghamton would have seen an 8% employment increase. That’s nearly 16,000 new jobs and $790 million in potential earnings that would flood into Broome and Tioga counties.

And things get worse in the detail: Only seven of Binghamton’s 106 competitive industries—again, those that are outperforming the nation—pay above $75,000 in yearly earnings. And only one (electric power distribution) pays above $100,000 per year.

Non-Competitive Industries

When an economy gets smaller, the industries that serve residents usually start to shrink, too. That’s what’s happening in Binghamton. Local government industries are contracting. Offices of physicians are rapidly losing jobs. Even full-service restaurants, which are exploding nationwide, are barely growing.

There’s a high-tech component to Binghamton’s economy that’s suffering. Printed circuit assembly manufacturing has dropped nearly 1,000 jobs, a 55% nosedive, when it was expected to gain 200 jobs. A similar loss of potential jobs has occurred in search, detection, navigation, guidance, aeronautical, and nautical system and instrument manufacturing (960 potential jobs lost) and electronic computer manufacturing (555).

The solid-paying jobs in those industries alone would pump $238 million in direct earnings into the Binghamton metro if they had performed at the same level as the nation.

Competitive Industries

Most of Binghamton’s competitive industries don’t employ more than a few hundred people, and as we said earlier, most don’t pay high wages. The two strongest industries are electric power distribution and general medical and surgical hospitals. They’ve exceeded expectations by nearly 1,000 combined jobs.

Motor and generator manufacturing, despite its relatively low average earnings ($39,972), is another bright spot: it’s grown 43% and outdone expectations by adding 171 jobs.

About Shift Share and EMSI’s Model

Shift share is a regional analysis method that attempts to measure how your local industries are performing. It looks at how much of job growth in an industry, cluster, or occupation can be attributed to national factors and how much is due to unique regional factors—the competitive effect.

EMSI’s shift-share model synthesizes a huge amount of local data to give economic developers a pulse on their region’s overall industry and labor market health (relative to the nation) and to reveal the industries that have performed much better (or much worse) than national trends—industries that economic developers would do well to focus on.

The model is targeted to help economic development organizations improve business retention efforts and keep a scoreboard of healthy and potentially endangered industries. It pinpoints competitive, neutral, and non-competitive industries, and shows how many in each category are high-wage, medium-wage, or low-wage (depending on the wage criteria selected by the user).

How are we defining competitive and non-competitive local industries?

• Competitive industries are those that have grown faster regionally than nationally. They could also be industries that lost jobs in the local area, but at a slower rate than at the national level. These are overperforming based on national trends.
• Non-competitive industries are those that lost jobs at a faster rate regionally than nationally, or gained jobs at a slower rate regionally than nationally. They are underperforming, based on national trends.

Potential or “unrealized” jobs come from non-competitive industries. We derive potential jobs (and their earnings) by looking at expected job change (given national trends), actual job change, and base-year total jobs.

A region’s potential growth depends on two things. First, it depends on a region’s mix of industries relative to the nation. A region with a disproportionate share of fast-growing industries will show greater potential growth than a region with mainly slow-growing industries. Second, it depends on the number and amount of actual growth in excess of expected growth: Industries that outperform (i.e., add more jobs) than their national counterparts boost the region’s potential growth. Potential growth in a region with no outperforming industries would simply reflect industry mix relative to the nation.

Sign up for EMSI’s webinar on our shift-share model here. It will take place Oct. 9 at 2 p.m. EDT. For more information, email Josh Wright or read our other shift share-related analyses. Follow EMSI on Twitter (@DesktopEcon) or check us out on LinkedIn and Facebook.