What's Different About the Border Economy?

On the national stage, Texas' economy is its best selling point. But this so-called "Texas Miracle" doesn't extend statewide: In the border region, unemployment reaches as high as 13.2 percent, and the median income is 30 percent lower than the statewide average. The Rio Grande Valley has been "probably hardest hit of any area in the state" by the national recession, said Tom Pauken, chairman of the Texas Workforce Commission.

The McAllen-Edinburg-Mission area has the highest unemployment rate of any metropolitan region in Texas. Brownsville has the lowest median income at $21,800 a year — 30 percent lower than the statewide median, and 35 percent lower than the national median. El Paso has the highest annual income of Texas' border cities, at $25,717 annually. But the unemployment rate, while lower than in Brownsville and McAllen, is still 10.9 percent, compared to 7.6 percent in Austin-Round Rock and 8.2 percent in San Antonio. 

Interactive: Explore the unemployment rates, job creation and annual income of Texas cities.

So what's different about the border? Experts say it's a combination of demographics and education — coupled with the competing interests of trade back-ups and the drug war across the Rio Grande in Mexico.

Tom Fullerton, an economics professor at the University of Texas at El Paso, said agricultural regions like the Valley “almost always” have higher unemployment rates because of seasonal work. The large number of non-English-speakers in the majority-Hispanic workforce, combined with sky-high school dropout rates, also leads to higher unemployment, he said.

 

“In many of these counties, the working-age adults are ill-equipped to compete for service sector jobs that require software skills and reading skills and quantitative skills,” Fullerton said.

Nelson Balido, president of the Border Trade Alliance, sees another challenge. Despite high unemployment rates and low wages, he said, many of the border economies are “actually growing.” If U.S. Customs and Border Protection was sufficiently staffed to handle the legal transfer of manufactured goods and Mexican nationals at Texas ports, he said, the economies would do even better. Even with many officers working 12- to 14-hour days, he said, there are "two- and three-hour wait times and some days up to four hours on peak periods," which prevents "the folks from Mexico coming into the United States and buying and spending money here." 

 

Many technology products like flat-screen televisions, tablet computers and BlackBerry cellphones are manufactured in Ciudad Juárez, across the border from El Paso, not overseas, Fullerton said. But these port wait times disrupt manufacturing and trade. “After 9/11, when wait times exploded as a consequence of new administrative practices … it made a lot of companies reassess their plans,” he said.

At a speech on the Hidalgo-Reynosa Bridge on Tuesday, U.S. Sen. John Cornyn said he plans to file legislation to facilitate commercial traffic across the border and relieve state law enforcement agencies. He proposed spending $6 billion to increase the number of customs and border protection officers from 20,000 to 25,000, hire 350 more support staff and purchase enhanced communication equipment, according to The Monitor

The legislation would also “help our agents out in the field to identify the bad guys, or the bad loads,” said Balido, who supports Cornyn's proposal.

The impact of drug trafficking can't be discounted when measuring the growth of border economies, said former state Sen. Eliot Shapleigh, D-El Paso. “I hate to say it, but the one private sector growth area is drugs,” he said. “Without question it is part of the statistical overlay of border communities." 

Measuring the economic impact of illegal drug trafficking is difficult, Fullerton said. Better inspection practices may help, he said, but the problem will persist as long as there is demand for narcotics. "It's probably going to be something that continues to disrupt commercial and economic ties between the two countries," he said.

Cities like McAllen, Brownsville and El Paso share these challenges. But Pauken said El Paso has performed better economically largely because of Fort Bliss. 

Fort Bliss became the site of the largest military expansion in the U.S. when the federal government passed the Base Realignment and Closure Act in 2005. The El Paso Economic Development Board estimated in 2009 that the growth of Fort Bliss — from 14,000 soldiers to more than 37,000 — would also create 24,000 civilian jobs in the area.

“Many of the major construction projects associated with the expansion got under way in late 2008 and really helped shield the local economy from a lot of the downturn that was experienced elsewhere in the United States,” Fullerton said.

 

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