Austin is facing a worsening worker shortage that spans industries and could prove more economically damaging than the pandemic.
In April there were 1.5 unemployed Texas residents for each advertised vacancy, according to the Texas Workforce Commission. This shortage is not unique to Austin or Texas. Instead, it's a "national economic crisis that is getting steadily worse," according to a report released by the U.S. Chamber of Commerce this week. The lobbying group found that there are approximately half as many available workers for every open job as there have been on average over the last 20 years and the ratio continues to fall.
(U.S. Chamber of Commerce)
Although Texas is impacted, it is doing better than some states, notable South Dakota, Nebraska and Vermont, where there are fewer potential workers than available jobs, according to the same report.
A widespread problem
"Now hiring" signs are commonplace in local restaurant windows. The restaurant and hospitality jobs site Poached lists more than 1,000 jobs in the Austin area posted within the last month. The city of Austin is short 600 lifeguards and is unable to expand opening hours or open additional pools as a result. Local residents may have noticed higher rideshare costs as both Uber and Lyft are facing a driver shortage as well, according to KXAN.
Skilled trade and manufacturing industries are also facing a hiring crunch, leading to project delays. A 2020 projection shows Austin will be short 3,130 workers across its 10 most in-demand trade and manufacturing occupations over the next decade, according to a recent report by Workforce Solutions of the Capital Area.
Many business owners lay blame for this worker shortage on pandemic-era unemployment benefits. In a recent survey conducted by the Texas Association of Business, 80% of the 177 business respondents said the $300 federal weekly unemployment benefit should be eliminated, citing it as a barrier to hiring. "This (shortage) is strange because there are still a lot of people out of work," CEO Glenn Hamer said. "It doesn't seem to make sense."
Aware of these concerns, Texas Gov. Greg Abbott announced last month that Texas will opt out of this benefit effective June 26. But economists told Austonia that multiple factors are at play in conjunction with unemployment benefits, including low wages, school and child-care closures that keep parents at home and fear of COVID-19.
Juan Benitez, director of communications for Workers Defense Project, which represents low-wage, immigrant workers in the construction industry, said essential workers are looking for jobs that offer essential protections, such as a living wage, health insurance and safe working conditions.
"This has been a pretty disastrous year for workers," Benitez said, citing a 2020 study that found Austin construction workers were five times more likely to be hospitalized with COVID than workers in other occupations. "Instead of going back to quote-unquote normal, we should be thinking about, 'How do we actually address a lot of the issues that COVID has shed new light on?'"
Workers Defense Project members participated in a third strike outside of the Texas Capitol last month. State lawmakers approved a bill that would prohibit local governments from mandating benefits such as water breaks and paid sick leave. (Workers Defense Project/Workers Defense Action Fund)
A workers' market
Local businesses are offering increased wages and new benefits in an effort to entice workers.
The median pay for Austin Uber drivers is $33 an hour, before tips, CEO Dara Khosrowskahi said during the company's first-quarter earnings call last month. Local companies P. Terry's and JuiceLand also recently raised their wages, the latter in response to an ongoing worker strike. "There's newfound worker power and people power and more reason to organize around labor," Benitez said.
Hamer is optimistic that the combination of "all-time high" wages, an end to the temporary federal unemployment benefits and the continued reopening of the economy will coincide with increased interest in open positions. "There has never been a better time to enter or reenter the labor force," he said.
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Heading to Q2 Stadium? Four months ago, it would've been tough to do so without dropping a pretty penny, but by mid-September, season ticket holders were clamoring to sell their seats for as little as a $10 beer.
While Austin FC continues to sell-out crowds—their most recent match was at capacity despite their record and scheduling conflict with a Texas Longhorns game—demand has dipped as new factors continue to pull down prices.
Austin FC's rocky season has been met with unbridled fan support, but it's also lost that honeymoon-phase traction as they fell to the bottom of the standings, faced a third COVID surge and were met with school, work and good ol' Texas football.
On Sept. 15, Austin FC fan Tanis Olvedo was willing to strike a deal: two beers for a ticket.
Austin FC went from $200+ tickets to this 😪 we down bad pic.twitter.com/Q3yOr7UBiC
— Darth Concha (@davidhidalgo44) September 15, 2021
Although he later sold at cost to another season ticket holder, many fans have seen the value of their season tickets take a serious dip. By Wednesday, Sept. 15, tickets that were once no lower than $36 had dropped to as little as $14.
Austin Anthem member Phil Stanch used his accounting skills to map out the dip in his ticket sales prices.
Phil Stanch found that the predicted value of his season tickets (in orange) will continue to trend downward. (Phil Stanch)
Here are the main reasons why fans say Austin FC's ticket prices have taken a tumble:
Austin FC's first home game on June 19 seemed like perfect timing—by June 16, 51% of Travis County residents were fully vaccinated. Mid-May saw Austin lift its risk-based guidelines to Stage 2 for the first time since the pandemic's onset just in time for the brand-new Q2 Stadium to open at 100% capacity.
But with the third surge sending Austin back into Stage 5 and hospitalizations skyrocketing in late summer, some diehard fans reluctantly began opting for the couch over a 20,738-capacity stadium.
That safety-consciousness comes tenfold for parents of young children who are still ineligible to get vaccinated, at-risk fans and the older population.
School starting and unvaccinated kids. That’s why we haven’t gone in a while. We are season ticket holders, so we have just given ours away to friends and coworkers that can go.— jae (@jae98342926) September 23, 2021
Austin has stuck to capacity and hasn't added any masking or testing requirements, garnering some criticism from fans.
I stopped going because of the COVID surge. I tried to sell my tickets a couple of times and they didn’t move. Then I decided to eat them to make space. Not happy the club didn’t create a mask or vaccination requirement.— Ruben Cavazos (@rcavazos) September 24, 2021
Just as the surge reached its peak in mid-August, schools across Austin once again opened in-person, leaving many families unable to go to late-night games on weeknights. Ten of the club's 17 home games have been on Wednesdays, Thursdays or Sundays—days that have quickly transformed into "school nights."
With 9-5ers unable to justify 8:30 p.m. weeknight games and kids tucked in bed by 10, fewer fans have been able to make their way to the games.
And with school comes another conflict of interest- tried-and-true Texas football is fully underway, and though Sept. 18 saw a sold-out crowd, a few Verde seats were left empty as the two teams played at home at the same time for the first time.
A combo of a number of things:— Tom H (@hallockitup) September 23, 2021
- Wednesday or Sunday games that end around 10pm are not appealing to people with jobs or kids.
- Being in last place hurts, no matter how passionate people are about the team. Nothing on the line.
- This is still Texas, and it’s football season.
While COVID and fall responsibilities have played a factor, Austin FC is also dealing with the unfortunate reality of being a last-place team.
Season ticket holder Doug Mayo was one of the 4% of season ticket holders who didn't renew his deal with the team. Once confident that he would easily sell the coveted tickets for their original price, the team's record plummeted alongside his own ticket prices. Mayo said that the team's 5-4-16 record caused their honeymoon phase to end prematurely.
"The newness wore off fast," Mayo said. "Nobody wants to go to a sporting event when it's 99% certain the team they support will lose."
For Mayo, it'll take a better record and more passionate play on the field to get him back in the 20,000-member season ticket waitlist.
"Mainly (I want) them to start acting more like a professional team," Mayo said. "We were so excited to have something to look forward to throughout COVID and it's just been a disappointment."
I've been a big supporter in general, I went to 4 games in the first half of the season, but no amount of "fan camaraderie" makes me want to spend $30-40 to see a team that plays without heart. And that's bc the last game I saw we actually won (albeit Houston was down a man).— Brown and in Austin (@DisraelTV) September 23, 2021
Still other reasons abound: some fans say it's those $10 beers themselves that cause prices to dip, while others say tickets were overpriced in the first place. Although Austin FC says 96% of season ticket holders decided to renew for 2022, many did so with a grain of salt, including longtime fan Shawn Collins.
"I have tickets in 110 (the Lexus Club) and even when the demand was crazy high I couldn't get face for my tickets because they were so high to begin with," Collins said. "When I got them I figured I'd make back what I paid on games I couldn't attend."
Austin FC's dip in ticket sales may be more of an MLS problem than a unique issue: gameday employee and University of Texas sports business student Ben Patterson said that prices shot up due to pre-season excitement and are now at more normal levels.
"The initial hype of finally having a pro sports team is likely what drove up season ticket prices at the start of the year," Patterson said. "Now that excitement has cooled off, ticket prices have dropped in value steeply."
But while five straight losses are enough to drive at least some fans away, plenty are committed to staying Verde through thick and thin.
It might not be easy being green, but thousands of fans are now enjoying the benefits of $20 tickets as they continue to pack Q2.
Let's not question why tickets are NOT expensive.
Let's just keep buying tickets at $20. Whaddaya say? https://t.co/HkhOjczzZJ
— AC (@Arc34_) September 24, 2021
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In May, Circuit of the Americas chairman Bobby Epstein looked back on 10 years of Formula 1's U.S. Grand Prix at COTA confident that the race would be here to stay in Texas. But sources tell Austonia that securing another contract may be in jeopardy.
Some insiders worry that COTA's 2021 Grand Prix race might be its last.
The multi-day fest from Oct. 22-24 will include a 56-lap race over the 3.3-mile track, food and musical performances from two acts, including Billy Joel at COTA's 1,500-acre facility in Southeast Austin. But after this year, the U.S.' first F1-specific track could lose its headline event.
The facility's inability to secure a contract thus far comes down to the Texas Legislature, a new threat in Miami, and, most importantly, money.
The first F 1 race will take place in Miami next year. (Hard Rock Stadium)
Every year, Formula 1 receives roughly $25 million from Texas' Major Events Reimbursement Program, a taxpayer-funded initiative that helps bring big sporting events like 2017's Houston Super Bowl to the state. A 2019 report by the Reimbursements Program on that year's race said the "data is inconclusive" on if the event has a positive or negative economic impact on the state with the resources given. In 2018, the Austin-American Statesman reported that COTA had brought back a total of $75.7 million between 2015 and 2017 for hosting the U.S. Grand Prix.
Legal issues have also barred Epstein and Co. from securing another 10-year contract earlier: in 2018, the company lost its yearly $25 million bid after failing to submit a human trafficking prevention plan as part of its yearly application.
That same year, F1 managing director of commercial operations Sean Bratches told the Associated Press that the organization hopes to stay at COTA "for many years to come."
However, in May, the racing league announced that it had secured a 10-year contract to hold the Miami Grand Prix as American interest in the sport soared following the three-season "Drive to Survive" documentary, which gives behind-the-scenes looks at drivers and races of the Formula One World Championship.
Epstein is optimistic about the new U.S. location and told Autoweek in May that "more races in our time zones are good for the sport."
"I think we're getting double the impact this way," Epstein said. "Miami should sell out huge the first year and maybe the second year and then after that, I think we'd be spitting audience if we were around the same time on the calendar. So the spread is fantastic."
Bobby Epstein recognizes the 1 millionth customer of COTA in 2013. (COTA/Facebook)
The new F1 venture may impact COTA's contract, however: in an opinion piece for the Fort Worth Star-Telegram, writer Mac Engel said Texas is unlikely to fork over taxpayer money if the facility is no longer the only F1 track in the U.S.
According to Engel, the Major Events Reimbursements Program agrees to provide funding only "if Austin holds the only F1 race in the country."
Epstein hasn't addressed such claims; by contrast, he feels as though there's room for a third race in the U.S. as ticket sales rebound after COVID.
"In the first week, we sold pretty much all the tickets we put up for sale and we plan to break the 2019 attendance record," Epstein told Autoweek. "Texas was the first place to lift COVID-19 restrictions (in the U.S.) and put on sporting events, and we're full. We're at 100% capacity.
Despite ventures to diversify revenue at COTA—Epstein's USL soccer team Austin Bold has seen its own share of troubles, and the facility plans to develop into a multi-faceted entertainment arena complete with music venues, a waterpark, condominiums and an 11-story hotel—a loss of its primary event could be devastating for the $300 million complex.
F1 has rarely lasted more than a decade at venues in the U.S. over the last century; let's hope Austin breaks that curse.
COTA's media relations team did not immediately get back to Austonia for comment.
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