Texas’ Greatest Opportunity and Greatest Challenge

 Texas’ Greatest Opportunity and Greatest Challenge

Data shows Texas education and workforce needs are inextricably linked.

It goes without saying that education is extremely beneficial to individuals, the economy, and society. For individuals, education is associated with a lower probability of unemployment, higher earnings, and work that is often more personally satisfying. Options and opportunities are more plentiful for those with high school diplomas and post-high school training. 

From the perspective of the economy, education is crucial to workforce preparedness and, therefore, prosperity. Long-term demographic trends are not working in our favor, and worker shortages will persist for decades. Texas is better positioned than many states due to our younger population and in-migration, but only if students are well prepared. 

Excellent public education is the single most important factor in securing our future prosperity. Key patterns and trends herein will affect Texas education, as well as workforce needs, in the decades to come.

Population Growth Trends

The Texas population now tops 30 million, according to recent estimates from the US Census Bureau. With a gain of 470,708 people from July 2021 to July 2022, the state saw the largest population increase in the nation in that time. In fact, about 37.5 percent of the net expansion in the entire country was in Texas. Population expansion in Texas last year was fueled by gains from three components: net domestic migration (230,961), net international migration (118,614), and natural increase (118,159). A number of states are losing population, including New York (down 180,341) as well as California and Illinois, which each had six-figure decreases. 

The choice to move to Texas reflects a range of factors, from the dynamic economy to greater affordability. At the same time, a younger population contributes to the natural growth rate. The Perryman Group’s long-term projections indicate that the state population will likely reach 43.5 million by 2050. These patterns will profoundly affect the school-age population.

Student Demographics

According to data from the Texas Education Agency, total enrollment in Texas public schools increased by nearly 429,000 students (8.6 percent) over the past 10 years, and many schools are severely overcrowded. With much school funding tied to average daily attendance, some districts will likely face declining enrollments and decreasing resources, while others must deal with rapidly expanding student populations. It is a complex issue, which may require a variety of responses to ensure quality education for students even as districts face divergent challenges. 

Another difficulty faced by Texas schools is that nearly 61 percent of all students are identified as economically disadvantaged, and the number is rising. In addition, the percentage of students identified as English learners is also growing and now approaches
20 percent, higher than any other
state and well above the national average. Both of these groups may require additional resources in the classroom and are critical to our
future workforce. Largely because of the low adult literacy rate in Texas, many students enter school with inadequate early childhood preparation.

Pandemic Effects

Standardized test scores are showing a notable ongoing learning loss in the wake of the pandemic. Results from the National Center for Education Statistics indicate that average scores for 9-year-old students in 2022 fell significantly compared to 2020. The five-point drop in reading, from 220 to 215 on a scale of 500, was the largest average score decline since 1990. In math, scores fell—for the first time ever—seven points (from 241 to 234). Performance from state to state was not uniquely tied to spending per pupil, although resources are important. To make matters worse, students who were the most vulnerable were hit particularly hard, with scores in both reading and math dropping more for lower-performing groups than those for higher-performing groups. 

Data indicates that Texas public schools fared somewhat better than others states’ school systems through the pandemic, though the disruptions wiped away years of improvements. Texas scores for the most part were not statistically different from national averages, with students performing better in some areas (fourth grade math and eighth grade science) but worse in others (eighth grade reading). Compared to other states with large populations, Texas scored notably better than California in several areas, with some areas better and some worse when compared to Florida, New York, and Georgia. The demographics of the Texas student population affect performance on these national tests because while bilingual (English and Spanish) test booklets are offered for the mathematics assessment, they are not permitted for the reading test.

A good signal in the data is that the gaps between scores for White students and Black or Hispanic students, while substantial, are significantly smaller in Texas than in most states. Positive results are occurring across racial/ethnic groups, which is not the case in some regions of the country.

Future Workforce Needs

The underlying drivers of future jobs and workforce needs are  patterns in expansion by industry. The Perryman Group’s latest long-term projections for employment in the Texas economy by detailed industrial sector were combined with the firm’s occupational system to estimate future employment by occupation. This model uses extensive surveys conducted by the US Bureau of Labor Statistics. It is also extensively localized for every county in the state and adjusts for changes such as technology shifts.

Occupations with
the highest demand
in Texas through 2030

1. Fast Food and Counter Workers

2. Home Health and Personal Care Aides

3. Retail Salespersons

4. Waiters and Waitresses

5. Laborers and Freight, Stock, 
and Material Movers, By Hand

6. Restaurant Cooks

7. Stockers and Order Fillers

8. Cashiers

9. General and Operations Managers

10. Software Developers and Software Quality Assurance Analysts and Testers

11. Customer Service Representatives

12. Registered Nurses

13. Heavy and Tractor-Trailer Truck Drivers

14. Janitors and Cleaners, Except Maids and Housekeeping Cleaners

15. Office Clerks, General

Each industry involves a mixture of jobs across a spectrum. A manufacturing facility, for example, might need managers, accountants, engineers, skilled workers of multiple types, truck drivers, janitorial staff, clerical workers, and numerous other categories. To get estimates of the total demand, our occupational system also considers the numbers of people leaving various professions due to retirement or other reasons. 

The categories with the largest numbers of new jobs are concentrated in food service and retail. Even with recent labor-saving technology in these fields, this pattern is common given the person-to-person nature of these segments. Among the top 30 occupations, eight are in this area (including fast food workers, cooks, retail salespersons, and cashiers, among others). Logistics is another high-growth sector, including materials movers, stockers, and laborers as well as truck drivers. There will also be substantial need for home health aides (with almost 140,000 needed in Texas by 2030), registered nurses, nursing assistants, and medical assistants. High demand is also projected for managers, software developers, janitors, customer service representatives, security guards, salespersons, landscape workers, accountants, and construction laborers. There is also a widely chronicled shortage of teachers at all levels.

Looking at the fastest-growing sectors in terms of percentages (as opposed to sheer numbers), rapid expansion is projected in renewable energy jobs such as wind turbine service technicians and solar installers. Several medical occupations are also on the list, including nurse practitioners, occupational and physical therapists, and massage therapists. Technology-oriented occupations such as information security analysts, data scientists, and statisticians will also be needed. Exercise trainers, animal caretakers, manicurists, and skincare specialists will see notable growth.

These jobs span a broad range of educational requirements and reflect the diversity of the state’s vast business complex. There is an increasing trend toward jobs that require some type of professional or technical certification that can be obtained in a relatively short period of time (and often as an option available in a secondary school setting). Not surprisingly, the longstanding general correlation between educational attainment and lifetime earnings remains firmly intact. As the population ages and baby boomers retire, there will be ongoing challenges in finding people to fill jobs.

Return on Education Investment

To provide a perspective on the importance of investing in education, The Perryman Group recently estimated the magnitude of returns on incremental state investment in public schools, including spinoff and productivity gains. We estimated that every incremental dollar the state invests in public education yields a total of lifetime economic benefit of $56.76. The major channels of impact include direct private-sector benefits from student productivity and earnings ($17.24) and multiplier effects on incremental production ($31.38). Each dollar yields $26.21 in gross product and $16.12 in personal income. 

There are also benefits in the form of additional long-term tax revenues ($6.99 for each dollar invested) and reduced costs from lower outlays for health care and various social services ($1.15). Thus, governmental entities receive more than $8 for every dollar expended. These benefits dwarf other types of public outlays. For example, transportation infrastructure, which is both highly beneficial and essential to the economy, yields an estimated economic return per dollar invested of $8.01. The benefits are also well above those for any private-sector industry, where the maximum is $17.81 (less than one-third of the public education return). 

In the current moment, it is particularly crucial to fund public schools, as students are still recovering from the pandemic.  

Texas schools are facing a variety of challenges, and sufficient resources can improve outcomes. Given national demographic patterns, the availability of well-qualified workers is the currency of economic development in the future. The primary reason to provide sufficient resources to Texas public schools is to build up the students, both now and when they enter the workforce. 

Dr. M Ray Perryman

Dr. M. Ray Perryman is President and CEO of The Perryman Group (www.perrymangroup.com), an economic and financial analysis firm that has served the needs of over 2,500 clients over the past four decades, including more than half of the Fortune 100, two-thirds of the Global 25, and ten US Cabinet Departments.

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