Wrestling with the Upjohn Report

by Ashley Bean Thornton

On October 27 last year I used this blog-space to say how excited I was that the City of Waco was hiring the W.J. Upjohn institute to do a study of income and employment in Waco. The folks from Upjohn delivered their report to the City of Waco on May 16. Since that time I’ve read through the “Upjohn Report” several times. It’s pretty complicated, and I’ve been struggling to find a way to mentally process it.

In the course of the last few years I have heard several theories about why our rate of poverty in Waco is so high. It occurred to me that one way to try to process the Upjohn report would be to see to what extent it seems to confirm or deny these theories. So, here goes. Here are six theories on why the rate of poverty is so high in Waco, and what I think the Upjohn report has to say about them. Note: throughout the report Upjohn puts economic information about Waco in the context of how we compare to nine peer Metropolitan Statistical Areas, or MSA’s, throughout Texas. Those nine MSAs are: Abilene, Amarillo, College Station – Bryan, Killeen-Temple, Lubbock, Odessa, San Angelo, Tyler, and Wichita Falls.

Theory 1: People just aren’t looking for work. – This does not seem to be the case. According to the report, “The good news is that in the City of Waco labor participation rates are relatively strong. This is especially true for the city’s Hispanic population. More than 70 percent of the city of Waco’s Hispanic working-age adults are in the labor force—either employed or looking for work (Figure 17). The participation rate for African American residents of the city is lower, 62.4 percent; however, it is higher than the average for the reporting peer MSAs, 56.0 percent” (p19).

Theory 2: We don’t have enough jobs. – It does seem clear that we are not adding jobs as fast as the rest of Texas, and we are also slightly behind our peer communities in this regard. Here’s a statement from the report that seems to apply: “Employers, the demand side of the area’s labor market, are generating employment opportunities, but not at the pace required to pull substantial numbers of residents out of poverty” (P. 13).

Theory 3: A high percentage of our jobs are low-paying jobs. – This seems to be true, not only for us but for our peer communities. Here’s a quote: “As shown by three separate data sets, employers in the Waco MSA and its peer MSAs appear to be seeking a relatively high number of unskilled workers” (P. 15). It is assumed that these jobs, since they do not require much skill, will generally be low-paying jobs.  

Theory 4: A high percentage of our workers are only qualified for low-paying jobs. – This seems to be an important part of the problem. According to the report, “It has been repeatedly shown that education matters for income growth (Figure 4). More than 36 percent of the individuals who are living in poverty conditions did not complete high school (Figure 5). But, you can’t stop only at high school. High school completers account for 26 percent of the persons living within 200 percent of the federal poverty guidelines. What is disturbing is that nearly a quarter of the city’s impoverished population completed some college or has an associate’s degree. While the data do not allow us to separate out the associate degree holders from individuals who attended but did not complete their college degrees, it is very likely that most of the individuals who are struggling in poverty are noncompleters. Clearly the importance of educational attainment cannot be understated” (p. 7). For the purposes of this report, Upjohn and the City of Waco agreed to define “in poverty” as having a household income of less than 200% of the federal poverty guidelines.  If I am adding up the numbers correctly, the preceding statement is telling us is that somewhere around 85% of the people in Waco who fit that definition of “in poverty” have an Associate’s degree or less, with the vast majority of them having less.

Theory 5: You get paid less in Waco for doing the same job someplace else. – According to the report, this is not a big part of the problem. Here’s the statement: “Finally, in many of the conversations conducted with area community and business stakeholders, a shared perception was that Waco employers pay lower wages, in general, than other locations. As shown in Table 6, Waco area wages are generally lower than state levels, especially for some key occupations such as industrial production managers, welders, and first-line supervisors; however, they are higher for licensed practical nurses and plumbers. Although not shown, we compared Waco’s occupational wage rates with those of the nine peer metropolitan areas and found no significant differences. While it is true that wages in Waco may be modestly lower than in larger metropolitan areas in the state, so is cost of living in the city. In short, it does not appear that wages, in general, are a problem in attracting qualified workers.” (P. 17).

venn diagramTheory 6: As soon as people start earning more money, they move out of Waco to the surrounding suburbs. – The Upjohn Report does not address this issue. The only thing in the report that might even touch on this idea is a Venn diagram on page 22 of the report that shows Metropolitan Waco Commuting patterns. According to the diagram there are over 67,000 people who are working in Waco but living outside of Waco. Are these higher wage earners who work in Waco but live in neighboring communities? Possibly, but the Upjohn report does not comment on that possibility.

There is much, much more information in the report than what I have offered here. I’m still processing what it all means. I’d love for you to read it and let me know what you think are the most important points. Here’s the link again, let me know what you figure out: The Upjohn ReportLet’s get a conversation going!

me and omarThis Act Locally Waco blog post is by Ashley Bean Thornton, the Manager of the www.www.actlocallywaco.org website and the editor of the Friday Update newsletter. The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email [email protected] for more information.

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