Cities in Texas, such as Austin, have been attracting more workforce talent since the pandemic began due to a number of factors. Now, Bloomberg reports that salaries in Austin and other large Texas cities are “climbing toward Silicon Valley levels.”
In Austin, pay for office jobs is 25% higher than in 2019, according to an analysis by the Dallas-based firm ThinkWhy, Bloomberg reports. To put this in context, it compares with a less than 2% raise for those workers’ recommended salaries in the San Jose area.
In turn, Bloomberg notes, hiring in Austin is just 27% cheaper than in San Jose, down from 40% before the pandemic.
“The value proposition isn’t what it once was,” Mallory Vachon, a senior economist at ThinkWhy, told Bloomberg. “Now companies are finding they are having to raise salaries to bring people here to afford the current housing and rental market.”
Indeed, Austin is becoming a tech hub and “has the highest share of people working or looking for jobs and the highest growth in payroll employment,” according to a Wall Street Journal study, in partnership with Moody’s Analytics.
For example, Tesla opened a Gigafactory in Austin earlier this year. Oracle also moved its headquarters to the city in 2020.
The Internal Revenue Service is also making a push in the city, saying in March that it is hiring more than 5,000 positions in its service processing centers, including the one located in Austin, as GOBankingRates previously reported.
Bloomberg notes, however, that as costs of living are also rising “and inch closer to that of more expensive US locales, the desirability of Texas could lose some of its luster.”
The Consumer Price Index (CPI) for the West South Central U.S. region — which includes Austin — was 9.9% in May, well above the national inflation, which stood at 8.6% that month, according to Bureau and Labor Statistics (BLS) data. Food prices were also higher in the region, with the CPI food index up 11.7% in May, compared to the national inflation of 10.7%.
More From GOBankingRates