Low wages

It’s no secret that El Paso’s hourly wages and salaries are low. But a 2018 salary guide by Robert Half, a national firm that specializes in placing finance professionals, puts El Paso last among 140 cities in the U.S.

Half’s guide shows salaries in El Paso as being 28 percent below national averages and the only below-average city among the seven largest cities in Texas. The closest is San Antonio at 1 percent above average.

The next lowest in the nation is Youngstown, Ohio at 24 percent below average and the highest is New York City at 40 percent above average, followed closely by San Jose, California at 37.5 percent.

Half’s figures are based on the company’s own experience and research, along with national data, and are generally in line with other sources, including Workforce Solutions Borderplex.

Denise Pacillas, a Half vice president and branch manager of the company’s El Paso-Las Cruces office, said that while the -28 percent El Paso figure is painfully low, it is 2 percent better than it was two years ago.

“Last year, we actually took a 2-percent rise, which is outstanding because we had been at 70 percent for a while,” Pacillas said. “We just placed a CFO at $150,000, which is significant, and we’ve got another position now that would pay $170,000.”

However, if that is 72 percent of the national average for the positon, the same job would likely pay $238,472 in San Antonio, using Half’s percentages.

And that is what El Paso has been up against, said Mayor Dee Margo, who didn’t dispute Half’s figures.

“All I can say is yes we’re aware of it,” he said. “We’re doing everything we can to overcome it. Now, our housing costs are less than a lot of communities, and we have our quality of life.

“Across the board, we want to raise our standard of living, which includes the ability to buy goods and services, which improves our sales tax revenues and benefits us all around.”

One part of the problem of low wages and salaries is tied to El Paso’s relatively low education attainment, Margo said, and the other is the inability to retain college graduates who can find higher paying jobs elsewhere.

“I would say the piece of the puzzle that is most concerning is the availability of jobs, not so much the compensation,” he said.

Joyce Wilson, the CEO of Workforce Solutions Borderplex, said one factor that is going to push compensation up is the city’s 4 percent unemployment rate.

“I do think we’re seeing an upward shift to the benefit of wages,” Wilson said. “I also think that as the labor market continues to tighten up, businesses will have to start adjusting so they can pay what the market’s demanding.”

Her agency’s latest figures on wages support Half’s salary data and show the average weekly wage in the first quarter of this year was $732 in the El Paso area, compared with $1,124 in Texas and $1,111 nationally.

El Paso marketed itself as a low-wage town for decades, leading to the growth of sewing factories for clothing manufacturers – a market that vanished with the implementation of the North American Free Trade Agreement in 1994.

Wilson said it wasn’t until the early 2000s that community leaders began to focus effectively on promoting better jobs to retain and attract the city’s college graduates.

The growing number of medical and nursing school graduates and the expansion of the job market that has come with new hospitals and clinics, are making a difference in El Paso’s rising economy.

“We’ve been working closely with the El Paso branch of the Federal Reserve, which has taken a stronger interest in the medical workforce as a component of the economy,” Wilson said. “The reason is it provides more purchasing power, more opportunity to save and to spend.

“All those factors drive the economy and drive business growth and development.”

One indication that the expansion of the health care sector in El Paso is raising the average income could be the growth in earnings in the small 79911 Zip Code in Northwest El Paso. The 182-bed Hospitals of Providence Transmountain Campus opened there in January and new high-end residential developments are going up nearby.

This year, that area overtook the Westside’s 79912 as El Paso’s second wealthiest Zip Code with an average household income of $104,331 and an average net worth of $601,260, data collected by global analytics firm Esri show.

El Pasoans like to point to the city’s low cost of living as a big advantage, especially when it comes to home prices, but Wilson said it’s really not a significant factor in El Paso’s favor.

“We looked at that, and even though housing prices may be lower, if you look at taxes, utilities and other factors, our cost of living is not dramatically lower than some other areas,” she said. “So we can’t use that as the overriding reason to keep wages lower.”

One indisputable bright spot, she said, is the improving skills level of the workforce.

“We’re producing a lot of talent,” she said. “The challenge is retaining that talent. I think we’re seeing a reversal of that as more talent is staying, more is returning and more people are coming from elsewhere with really good skills.”

Email El Paso Inc. reporter David Crowder at dcrowder@elpasoinc.com or call (915) 534-4422, ext. 122 and (915) 630-6622.

Map of Westhiest Zip Codes (Credit Esri)