Border city concerned about stagnant wages, flight of young families elsewhere

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El Paso business leaders look for solutions to avoid looming economic, political crisis

EL PASO, Texas (Border Report) ⁠— An increasing number of young families are leaving El Paso for higher wages elsewhere, a trend that worries business and political leaders here.

That’s why on Tuesday, they unveiled the El Paso 2.0 Economic Development Initiative, a summit to look for ways out of a potential crisis for this West Texas region. U.S. Rep. Veronica Escobar, D-Texas is leading the effort.

“We’re seeing challenges with wage stagnation and lower productivity. None of this is good for us and if we don’t come together with a shared vision, we are going to be a city in decline,” Escobar said. “This discussion is about increasing wages, productivity and competitiveness while recognizing our assets and embracing the opportunities ahead.”

Tuesday’s summit at the Minority Women’s Enterprise Diversity Center revealed troubling trends. El Pasoans as of last year were earning only 67.8 percent of the average weekly wage nationwide, which is a step down from 2011 when that percentage stood at 70.9.

U.S. Rep. Veronica Escobar, D-Texas, and Jon Barela (right), CEO of the Borderplex Alliance, talk before the start of the El Paso 2.0 economic development summit on Tuesday. (photo Julian Resendiz)

El Paso County schools had 167,351 students enrolled in grades kindergarten through 12 during the 2018-2019 school year, a net loss of 6,706 students.

The loss is worse at the youngest grade levels, said Bob Moore, president and CEO of El Paso Matters, which has been studying population trends for the past few months.

“The K-2 enrollment in the last year was 13 percent lower than it was in 2011-2012. This sharp decline in enrollment at the lower grade levels suggests that a lot of the people leaving El Paso are young families,” Moore said. “Sometime in the next couple of years, the number of students graduating from El Paso County high schools will begin to decline because of decreasing enrollment.”

Average wages have fallen in El Paso since 2011 when compared to national and Texas averages.

He added that, since 2013, El Paso has lost 12,000 more residents than it has gained — the slowest growth the city has experienced since the 1930s and the largest population loss of any county west of the Mississippi River — which is something that threatens its political clout.

“Since 1983, El Paso has had five members in the Texas House of Representatives. Because our growth is flat, whereas Texas’s population is booming, El Paso County may only have four reps in the Texas House after the 2021 redistricting,” Moore said.

Business leaders at the summit explained some of the reasons for the area’s low wages, as well as the difficulties in attracting more and better-paying jobs.

Challenges include geographical isolation — with El Paso being a four-hour drive from Tucson, Ariz., and Albuquerque, New Mexico (the closest major population centers), and at least eight hours from San Antonio — and political boundaries.

This graphic illustrates falling enrollment in El Paso County schools since 2011.

“We are blessed with trade routes to Chicago, Los Angeles and Houston. … (But) we have different property law, different tax and contract law. Those systems inhibit trade and commerce,” said Patrick Schaefer, executive director of UTEP’s Hunt Institute for Global Competitiveness, referring to El Paso’s proximity to Las Cruces, New Mexico, and Juarez, Mexico.

A region of 2.5 million people that could have an integrated economy instead sees Southern New Mexico playing up its tax advantages over El Paso and Juarez dealing with U.S. bureaucracy.

“If I am a cheese salesman from Villa Ahumada (Mexico) and I want to sell to Albuquerque and El Paso, I might have to deal with sanitary standards, tariffs, waits on border, spoilage and different tax laws,” Schaefer said. “Take any industry … and the rules that govern the markets and create the valuation of those markets are fundamentally divided.”

He suggested that local leaders look into compacts, trade zones and even international treaties to optimize joint economic opportunities.

And then there’s the issue of negative stereotypes of the U.S.-Mexico border, which sabotages local efforts to bring more industry to the region.

“Those in (Washington) D.C. and the White House who make threats of closing the borders and zig-zag on policies with our bilateral relationship create an air of uncertainty for investment, particularly in this region, and that creates some challenges for us,” said Jon Barela, CEO of the Border Trade Alliance, an El Paso-based business development promoter.

Barela said companies outside the region still perceive the border as a violent, lawless frontier. “We have been unfortunately mischaracterized and that hurts our job optimization potential,” he said.

Barela added that investing federal dollars in improving trade with Mexico would be a boost for the area’s economy.

“We can have the best trade agreement ever, but until we figure out how to improve our port infrastructure and eliminate those wait times which are still, to me, intolerable, we are going to have challenges optimizing our binational trade and job development,” he said. “We have a symbiotic relationship with our southern neighbors. I say, emphatically, that Mexico is an economic and strategic ally of the United States. It is not a foe. And until our country figures that out as a whole, we will not optimize our job creation.”

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