Sunday, May 03, 2009
Greater Waco workers in the 2000s have seen their biggest pay gains in decades, and local economic development officials give much of the credit to a healthy manufacturing sector. But those higher-paying jobs also demand higher skill and training levels and are as likely to involve a computer as a wrench, they say.
McLennan County’s annual per-capita personal income grew 31 percent between 2000 and 2007, from $22,710 to $29,730, according to a new report from the U.S. Bureau for Economic Analysis. The figure reflects the population of people who actually received income, which excludes children and many college students but includes workers and retirees.
The average income figure trailed Texas as a whole, which saw personal income surge to $37,083 in 2007. The state mirrored the county’s 31 percent growth rate since 2000.
“We’ve had good, strong growth,” said Scott Connell, vice president for economic development at the Greater Waco Chamber of Commerce. “It’s still a bit behind Texas as a whole. But the increase is pretty remarkable, especially considering we had a pretty significant recession just seven years ago.”
Recession effects
Connell said it’s too early to tell how the current recession will affect average income, but the employment losses this year in McLennan County and Texas have been modest compared with the rest of the country. McLennan County’s March unemployment level was 6 percent, compared with 9 percent nationwide.
Connell said local income gains reflect growth in high-skilled jobs. Since March 2008, education and health jobs have grown by 600, not counting several hundred Veterans Affairs hospital and administrative jobs that have been added in the last year, Connell said.
Manufacturing remains a cornerstone of the Waco economy, and he’s seen growth in high-skill manufacturing jobs at companies such as L-3, Caterpillar and Allergan and smaller factories.
Manufacturing accounts for 14 percent of the Waco economy, compared with 9 percent for the state of Texas and 10 percent for the U.S.
Between 2004 and 2007, McLennan County added 2,300 manufacturing jobs, including 341 in the aerospace industry, which the chamber is targeting because of its high wages. Manufacturing has lost 100 jobs in the last year ending in March, but Connell said he expects the sector to keep growing.
“Manufacturing is important because it brings in dollars from outside our market,” Connell said. “We’re not walking away from manufacturing. We make stuff in this town. We have the training and support for industry. Companies in other parts of the world know it’s a good place to manufacture. But we’re looking for the next thing.”
The kind of 21st-century industries Greater Waco leaders are targeting don’t necessarily have smokestacks and rolling assembly lines.
Many hire scientists and engineers and require technical training of their rank-and-file factory workers. Many do intricate custom work instead of rolling out thousands of standardized products a day the way General Tire once did.
Custom work
At Texas Machine-Tool International in Bellmead, a workforce of 20 is trained to build, rebuild or customize machine parts for a variety of industries, including oil and gas drilling, robotics and aerospace. One customer is L-3 Communications, which does aircraft modification at its Waco plant.
On Thursday, workers were calibrating a machine with diamond inserts that would be used by a Houston company to manufacture oil field drill bits. They were using electronic equipment to machine the tools to a tolerance of about two microns — about one-140th the width of a human hair.
Company president Mike Sullivan said the factory jobs typically require at least a technical degree from a place like Texas State Technical College, followed by an apprenticeship training program at the factory. Factory wage earners make between $12 to $28 per hour, and engineers can make up to $85,000 a year, he said.
“All of this is very custom work,” he said. “It requires a huge amount of intellectual energy.”
Sullivan’s company, which opened in 2003, recently built a new factory behind the Home Depot in Bellmead, using land offered by the Bellmead Economic Development Corporation. He hopes to double his workforce in the next couple of years and begin manufacturing aircraft parts.
In the meantime, the company is weathering the recession by offering its services to help companies maintain and repair their equipment.
Sullivan, a veteran of other precision tool companies, said Greater Waco is a good place to do business because of its central location, quality of life and low cost of living. He said he believes the aerospace industry has a strong foothold here and can continue to grow.
“We want to be involved and speak on behalf of Waco and what the community has to offer,” he said.
High-skill, custom manufacturing is also the name of the game at Diversified Product Development, a company that employs 32 people at 1001 Webster Ave. in downtown Waco. The company provides engineering services and builds prototypes for mobile equipment in the mining and utility fields. Customers include Caterpillar and a wind turbine company.
“A lot of companies are outsourcing their engineering for product development,” said company president Ray Fritel. “What might take them two and a half years to develop, we can have ready in 12 to 14 months.”
Entry-level workers begin at about $12 an hour, and the firm employs seven designers and seven engineers, who Fritel said earn relatively high salaries.
He has had to bring some engineers from outside of Waco, but he also employs two graduates of Baylor’s engineering school and has employed TSTC students as well.
Despite the recession, Fritel expects his business to grow 20 percent this year, with some business coming from electrical grid improvements.
Income increases
Connell said the chamber hopes personal income levels will increase along with high-skill industries.
“We’re focused on higher-paying industries, but we’re still cost-effective compared to a place like Connecticut,” he said. “We believe we can still be competitive and see wages go up.”
Waco City Manager Larry Groth said city and county incentives for companies with higher wage scales have paid off.
Currently, the local governments offer incentives to companies that pay at least $12 an hour and provide health insurance, but Groth said he would like to raise the wage standard.
“A lot of the things we’re working on pay way above that,” he said.
He said improving the community’s overall pay scale is a high priority.
“We’ve got a lot of social problems, and while it may not solve everything, creating wealth helps,” he said. “If we do nothing but create higher income jobs, we’ve done a lot. When a family has the opportunity for a better-paying job, the impact is tremendous.”
jbsmith@wacotrib.com
757-5752
Comments
By reality
May 4, 2009 12:45 PM | Link to this
Waco has to want to work. Waco does have a lot of people living below the poverty line, but some of that is that Waco doesn't want to work. As I used to tell friends of mine, McDonald's is always hiring when he told me there are no jobs. The problem in Waco, people can't hold that job at McDonald's. Recently in North Dallas, I saw they had a McDonald's had a hiring problem up there too, the difference being they couldn't keep their workers because Taco Bell across the street was paying $12/hr.
We have to get rid of this attitude that jobs are beneath you. If you feel like working at places like McDonald's are beneath you, then being a thief, robber, dealer, etc should be far below. Those people don't earn anyone's respect who they should be proud of, just contempt. The only people who respect those type of people are strung out drug users who would eat manure if it got them their next fix.
By the next big thing
May 3, 2009 10:33 PM | Link to this
For real. 27 Grand when 37 Grand is pretty much the Texas average? Come on. I know people in towns of 8,000 people who make more than what Waco averages. I really didn't believe so many people in Waco were at or below the poverty line until I started doing a little research, and using Google. Waco as a city seems to expect and settle for mediocrity. Mr. Connell, if you call this progress, you are sadly mistaken. I moved here to with the open option of staying to settle down after finishing my degree. I am not going to school to settle for a $12 an hour job. I have already made more than that. By the time a person pays their health insurance, and bills, they are at the poverty level. No thanks. So like a lot of other people, Waco is being considered as a temporary stop for me. Waco actually has some good things going for it. An interstated running through town, a university, a community college, a technical school, a river running through town. The quality of life here is just not that great. Crime, low wages, bad schools, bad child care facilities. It's like the Greater Waco leaders just settle for the worst.
By TX proud
May 3, 2009 9:33 PM | Link to this
We need more livable-wage jobs in McLennan County! We can preach education all day long but until there is real opportunity for us to strive for, we will not make much progress inspiring ambition. My son has a Waco education and had to move to Dallas to find work. He found a job within 2 weeks starting at $17 per hour with decent health and retirement benefits. The best he found in Waco was making $10.50 doing something he loathed. He wanted to stay here where his friends and family are. Where his roots are.
With all of these empty buildings in McLennan County, what can we do to encourage industry in our backyard? I'd like to see a wind mill manufacturing plant open up here or a medical research facility. It seems like our out-dated conservative ways deter progressive business from coming our way. What can we do to make Waco attractive to progressive minded people so they will want to live, work, and invest here?
By betty
May 3, 2009 4:50 PM | Link to this
$12 an hour jobs? Sounds like the good old boy system is still keeping the wage rate down in Waco. More chicken plant jobs, that what the wages sound like to me.
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