Texas may be losing one of its biggest bragging rights. While the state ranks second in population to California, it’s not the same bastion of economic growth it once was.

In fact, it’s no longer much different from any other state.

Texas remains one of the fastest growing states in the U.S., but a report published by the Dallas Federal Reserve Bank showed a significant reduction in the number of people moving to Texas since 2015. That’s left employers — who are already having a difficult time finding workers amid historically low unemployment rates — in an even tougher position.

Since 2016, the share of population growth in Texas from people moving to the state is half of what it was previously. Each of Texas’ four largest metro areas — Houston, San Antonio, Austin and Dallas — has experienced a reduction in domestic migration and overall population growth.

“We’ve seen really good growth, and yet we’re seeing slowing of migration — and that’s not because we’re less attractive. It’s because outside of Texas, things are also very good,” said Keith Phillips, senior economist at the San Antonio branch of the Dallas Federal Reserve.

In other words, the so-called Texas Miracle — the state’s unrivaled ability to create jobs and economic opportunity — now has rivals. Nationwide, most workers can find jobs if they want them, making a cross-country move to Texas in search of a paycheck less appealing.

In the five years from July 1, 2010, through July 1, 2015, Texas saw more than 138,000 people on average move to the state each year from elsewhere in the country. But from July 2015 to July 2018, Texas added just under 96,000 people each year from domestic migration — a 31 percent annual drop, according to the U.S. Census Bureau.

Texas employers are having to adjust.

“Businesses are trying to find new ways to produce things without hiring as many workers as they normally would simply because they can’t find them,” Phillips said. “With this very tight labor market, businesses are more vulnerable, profit margins are squeezed as they have difficulty raising prices in the age of the internet, and yet costs are going up in material prices and labor prices.”

With unemployment a little over 3 percent and declining migration, that’s the predicament many local companies find themselves in.

Nearly 14,000 people on average moved to Bexar County each year between July 1, 2010, and July 1, 2015 — making it the fourth-fastest growing county in the nation during that time, according to the Census Bureau.

But from 2016 to 2018, the county added on average 10,520 people annually from domestic migration, or nearly a quarter fewer people each year.

Hard to attract attention

Some industries — such as information technology — have a harder time finding workers than others.

David Heard, CEO of TechBloc, the San Antonio technology industry group, said the city has had difficulty standing out to potential workers among cities across the nation with promising tech industries, such as Nashville, Tenn., or Columbus, Ohio.

With tech workers in demand in metro areas across the nation, the decision often comes down to which city offers the best quality of life, Heard said.

“These people tend to get paid well,” he said. “Wherever they go, they’re in demand, so the issue is about how being competitive on salary and having job availability often aren’t what charge their decision. It really comes down to lifestyle issues.”

Most cities looking to attract tech workers and other “creatives” have been following the same gospel — investing in public and cultural amenities such as lush parks and concert halls to lure talent — for nearly two decades. The slowdown in migration to Texas makes the challenges for tech companies even more daunting.

The Dallas Fed projects that around 90,500 Americans will migrate to Texas from elsewhere in the country in 2019. That tops the 82,500 people who migrated to Texas last year, but it’s down from the years following the Great Recession, when 123,000 people on average came to the state annually.

“Domestic migration is usually an indication of employment opportunities or a lack thereof,” Lloyd Potter, Texas’ state demographer, said. “Essentially, it’s an indicator of a slowdown of at least one sector of the economy ... The confusing aspect of it is that we have very low unemployment.”

Potter said the decline in people moving to Texas is difficult to parse because of the differing regional economies across the state.

In the Permian Basin, lucrative job opportunities in the oil and gas industry have allowed Midland and Ector counties to emerge as two of the top 20 fastest growing counties in the state.

Harris County, meanwhile, has steadily attracted fewer and fewer people from outside the state since 2016, even before Hurricane Harvey hit.

“We did have this period where there was a downturn in the price of oil in (2017) and (2018) — that probably had some impact,” Potter said of Houston. “One segment of the economy isn’t doing well, then that has a multiplier effect as well.”

But all Texas cities have this in common: a dearth of skill and semi-skilled workers. Employers have an especially difficult time finding mid-skill workers who have a high school education but less than a college degree, according to the Dallas Fed’s September Beige Book report, which characterizes regional economic indicators.

Firms surveyed for the report noted that retention of employees was a challenge, and many businesses have struggled to fill positions because applicants have been looking for higher pay.

One of the primary ways to address the current workforce shortage in Texas, Phillips said, is to boost both domestic and international migration.

The U.S. workforce is rapidly graying — the number of workers aged 65 and older is projected to increase by more than 60 percent in the next decade — meaning the working-age population will likely begin shrinking.

“The thing that can offset that... is international immigration, and Texas has benefited from workers moving in both domestically and internationally,” Phillips said. “So, from a policy standpoint, you can address international immigration by allowing more people to immigrate to fill job openings.”

But for David Marquez, executive director of economic and community development for Bexar County, the region doesn’t require more people to move here. Instead, Marquez said, the solution is bringing workers back in the labor force who have been “on the sidelines.”

“The (Texas) unemployment rate might show 3.4 percent,” Marquez said. “There are many people who are still underemployed or working two jobs who would work in a better job if they had training and opportunities to pursue those.

“We look for those special populations of people who may have been formerly incarcerated, veterans and others who we think they’re still an untapped worker pool.”

Marquez said his focus is on enhancing local training programs such as the Texas Federation for Advanced Manufacturing Education. Such programs can train native workers who are more likely to stay in San Antonio, instead of bringing workers in from outside the state.

“That’s where I think the biggest disconnect comes from,” Marquez said. “Help those people understand what they should be learning and how it will translate to (the workplace), and what opportunities are out there.”

It’s not clear, however, how far skills training alone can go in filling employers’ open positions. Workers moving in from outside Texas could still help meet the demand.

Phillips compared Texas’ recent growth to California in the 1960s and 1970s when it underwent a period of rapid growth — and has since seen its cost of living increase dramatically. Austin and Dallas, he said, have experienced similar sharp increases in housing costs.

“If we can manage growth better, we can continue to see positive net domestic migration in the long run,” Phillips said.

“Is Texas still a place companies can make profits more than other states? Is Texas a place where people can move and get a good standard of living based on the job they’ve been able to get?” he said. “I think Texas is still going to maintain its advantage in those areas relative to many states in the country.”

diego.mendoza-moyers@express-news.net