A New Way To Keep Texas ‘Business Friendly’

This time last year, Texas was wrapping up a year of record low unemployment and job growth in which nearly 1,000 jobs were being added every day. Economic growth seemed limitless, driven by a business-friendly climate and a relatively stable energy market.

Fast forward a year:  2020 has disrupted Texas’ economy and hobbled our job-creation engine. As Texas 2036 has reached out to talk with chambers and business leaders across the state, we’ve found that our state might have to redefine what “business-friendly” means.

Understandably, business leaders are worried about the short-term impact of the pandemic on key industries (notably in the travel, restaurant, entertainment, oil and gas and retail sectors) — but, more importantly, about the large number of Texans whose jobs aren’t coming back due to business changes and automation that was accelerated during this disruption.

The main concern we hear most from Texas businesses is that our state, with its growing population, lacks the skills needed to fill critical positions within their companies. Much of Texas’ past success has come through the high-skilled workers and college graduates who have moved here from out of state.

These comments from business leaders match the research, which shows only 27% of native Texans hold a bachelor’s degree or higher, compared to 41% of domestic migrants and 42% of international migrants. 

Business leaders have a clear message that we must do more to educate Texans — especially through post-secondary degrees or training programs — and arm them with the knowledge and skills to succeed in a modern economy and fill employers’ needs.

That’s why we, along with chambers of commerce and non-profits across this state, see the upcoming state legislative session as a critical opportunity to take bold action that will hone Texas’ competitive edge. It is clear that there is a limited window to address the state’s growing need for access to opportunity — and Texas must seize this moment.

To remain a business-friendly state, we need to look closely at how to use limited state budget dollars and any federal funding we can leverage.

Many Texans would likely be surprised at the number of positions that Texas business leaders say are unfulfilled today due to the lack of applicants with two-year degrees or certification after high school. Today, only one-in-three Texas high school graduates earns any credential; two-thirds do not. Unfortunately, these Texans have been most affected by the economic downturn this year, especially Texans of color.

Several business leaders have told us that companies have had to create their own training programs to prepare undereducated Texans for entry-level job opportunities. To create more opportunities than these individual private efforts can offer, Texas needs to build more robust education and workforce training systems to produce skilled and productive workers in the fastest growing, high-wage jobs that employers need to fill. That will change the lives of those Texans, energize our economy and help employers grow without having to bring in talent from outside the state.

While last session’s House Bill 3 was a historic investment in educational initiatives like pre-K and teacher effectiveness, its workforce impact might not be felt for a decade. This critical legislation was the right step, as assessments before the pandemic indicated that only 3 of 10 Texas 4th graders were reading at grade level. But even the most successful school reforms take time to implement, and the students who stand to benefit most — the youngest students — won’t enter the workforce for years. 

Starting in January, we need to devote similar attention and action to Texas’ education-to-workforce pathway. We must find a better alignment of Texas degree and credential programs to employer demands, expand reskilling and upskilling programs for current workers and applicants, and strengthen support services to ensure that more students and employees complete effective programs that will elevate their career prospects.

To ensure Texas remains a business-friendly state — one where every Texan can prosper — we must embrace the message from our state’s CEOs: It’s time for Texas to invest wisely in our human capital.

Margaret Spellings, the former U.S. Secretary of Education, is Texas 2036’s President and CEO. To learn more about what Texas CEOs are telling us, visit https://texas2036.org/ceos/.