The Texas Workforce Is Resilient and Undervalued

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The Texas Workforce Is Resilient and Undervalued

Texas Leaders Must Champion Dignified Jobs for the Well-Being of Families

Texans deserve a prosperous future where our efforts allow us to thrive without limitations. The labor of working Texans fuels our titan economy, and we deserve job conditions that fully recognize the significant contributions we make to our state’s economic abundance. 

Texans, both native-born and immigrant, have demonstrated resilience in reaching a historically high level of employment, even after the COVID-induced recession. Despite unprecedented challenges that put many out of work, Texas workers successfully rebuilt our robust economy with the help of people-centered federal investments. Stimulus checks, improved unemployment benefits, and enhanced tax credits like the Earned Income Tax Credit and Child Tax Credit were key in rebuilding our economy. 

Beneath the overarching success, however, lies a tale of unevenness and disparity, particularly for Texans in rural areas, communities of color, women, and low-paid workers. Although total employment has rebounded, too many Texans still face persistent challenges – like disparities in unemployment rates and labor force participation – which have worsened with the devaluation of caring, service, and safety work. State policies should support job conditions that enable workers to balance work and family responsibilities. 

State leaders can expand shared prosperity by guaranteeing a living wage, providing access to work apprenticeships, and supporting Texans to take time off to care for our families. At the same time, the state should invest in the well-being of our most vulnerable residents — children, people with disabilities, and the elderly — by increasing caretaker wages and reducing child care subsidy waitlists. This approach fosters economic security for families and boosts state tax revenue for health care, education, and food access. 

A Resilient Workforce, Robust Migration, and Government Investment Created Historic Job Levels

In June 2024, Texas hit a record-high employment of 14.7 million. Despite rapid job loss during the pandemic, Texans (both long-standing and new) showed tremendous resilience in surpassing pre-pandemic employment in two short years. 13.6 million Texans were working at the beginning of the pandemic, but total employment dropped to 11.6 million within a month as measures to contain the virus restricted economic activity. In total, we lost 2 million jobs. 

The robust economy we witness today is a direct result of the unprecedented investments made by the federal government during the peak of the 2020 pandemic. Unlike past recessions, where recovery is slow and gradual, Texas experienced a rapid economic recovery thanks to targeted relief for working families and individuals. This aid prevented business closures and allocated our state and local governments with $40 billion to provide a crucial lifeline that allowed workers to keep their jobs or rejoin the workforce when safe. Key support measures – such as vital stimulus checks, enhanced unemployment benefits, and boosted tax credits – played a pivotal role in preventing severe financial struggles that could have persisted for years. 

In addition to people-centered investments, consistent population growth contributed to the state’s stellar job recovery. Texas is the fourth fastest-growing state in the country, behind Nevada, Utah, and Idaho. From 2000 to 2022, Texas saw significant growth fueled almost equally by natural increase and migration – both domestic (29%) and international (22%). This demographic diversity is reflected in Texas families, with 12% of native-born Texans living with at least one immigrant parent in 2022.

A Strong Labor Market Did Not Guarantee Equitable Job Recovery for All Texans 

Although total employment is a good indicator of economic well-being, job loss provides an additional perspective of a community’s economic health. While some level of unemployment will always exist, as there will always be people between jobs, high unemployment rates often signal economic downturns and that people are facing limited job opportunities or obstacles in securing employment. Unemployment takes a toll on a person and their community; unemployment, especially for more than six months, is associated with reduced well-being for individuals and families, decreased income, poorer health, and lower academic performance for children.

  • The unemployment rate measures the percentage of people who are unemployed (those without a job and actively seeking one) out of the total labor force (the sum of employed and unemployed individuals).

In June 2024, Texas exhibited a 4.0% unemployment rate, slightly lower than the national 4.1%. Unemployment has since stabilized but remains above pre-pandemic levels. Prior to the COVID-induced recession in January 2020, the unemployment rate stood at 3.5%. However, the pandemic led to a sharp increase, reaching a record high of 12.8% in April 2020. It took almost two years to return the unemployment rate under 4.0%.

The strong labor market has not guaranteed an equitable job recovery for all Texans; historical injustices in the criminal legal and immigration systems created an uneven recovery for Texans. Many are still denied opportunities for upward mobility, which leads them to work in low-paid occupations without adequate job security and benefits to care for their families. While every type of work holds value, some jobs are considerably more vulnerable to economic downturns. The employment gaps are especially noticeable among Black and Brown Texans, women, individuals under 55 years old, those with lower education levels, and residents of rural areas.

Unless otherwise noted, the following section relies on data from the Economic Policy Institute.

  • Black and Hispanic Texans face higher-than-average unemployment rates. Black and Hispanic Texans face higher unemployment rates and were more harshly affected by the 2020 recession, in part due to working in occupations without much job security, earning lower wages, and existing financial challenges. At the height of the pandemic, the unemployment rate for Black and Hispanic Texans increased the most compared to white Texans, rising by 5.7 and 4.9 percentage points respectively. Although unemployment rates have decreased since 2020 for all groups, they are still higher than pre-pandemic levels. In 2023, white Texans saw a decline in unemployment to 2.7%, while rates increased for Black and Hispanic Texans to 5.8% and 4.9%. 
  • Despite the recovery, women continue to experience higher unemployment rates than men. Unemployment increased for both men and women during the COVID-19 pandemic, though women experienced the largest rise in unemployment and had rates consistently higher than men. Nationally, women left the workforce four times more than men during the peak, mainly due to the need for child care. Even though the pandemic has ended, lack of state investment has left Texans grappling with a child care crisis, with more than half of Texas counties considered child care deserts. By 2023, the women’s unemployment rate increased to 4.1% from 3.7% in 2022, while men’s rose to 3.9% from 3.8%. That same year, an estimated 300,000 children went without care, costing our state $11 billion in lost productivity. 
  • Unemployment rose for Texans younger than 55. Young Texans (ages 16-24) face higher unemployment rates than both adults aged 25-54 and Texans over 55. In 2020, the unemployment rate for young Texans reached as high as 13.3%, due in part to their prioritizing education, having limited work experience, and working in the industries and occupations hardest hit by COVID-19 where remote work was not feasible. While unemployment has been decreasing for Texans older than 55 since 2020, it rose for Texans aged 16 to 24 to 8.7% in 2023 from 7.5% the year before. For Texans aged 25 to 54, it rose from 3.1% to 3.3% in that same time. 
  • Texans with more education generally experience lower unemployment rates. However, the COVID-19 recession affected all education groups and caused significant increases in unemployment rates. While there was some progress in reducing unemployment rates across all education levels from 2020 to 2022, Texans with less than a high school diploma had the highest unemployment rate in 2023 at 6.3%. Unemployment among Texans with a bachelor’s degree or higher was less than half of that, at 2.6%.
  • Three-quarters of Texas counties with unemployment rates higher than the state are rural. In 2023, urban counties experienced a slightly higher average unemployment rate of 4.0% compared to rural counties’ rate of 3.9%. While rural counties have slightly lower unemployment, they also have a wider range of unemployment – from 0.3% in Loving County to 9.3% in Starr County. Of counties with unemployment rates higher than the state’s 2023 unemployment rate, three-quarters are rural. Further economic development in rural areas is crucial in reducing unemployment; according to a recent study by researchers at The University of Texas at Austin, local banks, a diverse and youthful population, a substantial immigrant community, and access to essential health care infrastructure are all key predictors of business creation in rural America.

Texans of All Backgrounds Actively Contribute to Our Prosperity

Unless otherwise noted, the following section relies on data from the Economic Policy Institute.

While the unemployment rate gives us an idea of how many people are actively participating in the labor market – whether working or looking – it does not account for people who are no longer searching for a job or those who have dropped out of the labor force completely. Given that people who are discouraged by the job market are not included in the unemployment rate, labor force participation better reveals how successful the labor market is at incorporating working-age Texans. 

Labor force participation has declined since its peak in the 1990s, driven mainly by a rising percentage of Baby Boomers nationwide exiting the labor force. In 1995, Texas boasted a labor force participation rate of 69.6%. This rate has since decreased to 64.9% in 2023, though it still exceeds the nation’s 62.6%. 

  • Labor force participation is the percentage of Texans who are either working or looking for work (referred to as the labor force) out of the population eligible to work (noninstitutionalized people 16 and older).

Participation in the labor force remains uneven. In 2023, Texans between 25 and 54, people of color, men, and those with a bachelor’s degree or higher education were more effectively integrated into the labor force compared to the overall state average. On the other hand, Texans of color (despite their high participation rate), women, younger individuals, and those with lower educational attainment were more likely to leave the labor force during economic downturns.

  • Black and Hispanic/Latino Texans exhibit high labor force participation but experience significant fluctuations. In 2023, Black and Hispanic/Latino Texans showed the highest labor participation rates, exceeding the state average. Black Texans experienced a sharp decline of 4.3 percentage points in 2020 but rebounded thereafter, due in part to economic inequalities that exacerbated the effects of the recession as described in the prior section. While Hispanic/Latino and white Texans did not leave the workforce as rapidly, Hispanic/Latinos saw declines in 2020 and 2021 before growth resumed in 2022. Asian and Pacific Islander Texans recently saw a decline in 2023 of 3.7 percentage points.
  • Women swiftly reentered the labor force after the pandemic, yet barriers prevent them from participating equally to men. During the 2020 pandemic, both men and women faced a similar decline in labor force participation, with men experiencing a 1.4 percentage point drop and women a 1 percentage point drop. However, women’s reentry into the labor force was slower in 2021. The following year, women’s participation rate increased faster than men’s and continued to grow in 2023 while men’s declined. In the long run, however, women’s labor participation rate has remained stagnant since 2000 and lags behind men’s by almost 13 percentage points, impeded by persistent obstacles such as child care responsibilities and lower wages.
  • Texans with lower education levels face more labor participation fluctuations. People with higher education levels are more likely to engage in the workforce, making it easier to navigate economic downturns and enhance overall income. While Texans with higher levels of education left the labor force in 2020, Texans with less than a high school education experienced a larger decline in participation (2.9 percentage points). Texans without a high school diploma did not experience labor participation growth until 2023.
  • Pandemic hit younger Texans’ labor force participation harder, while older workers’ participation remains below pre-pandemic levels. The COVID-19 recession had a noticeable impact on labor force participation, especially among young workers (16-24 years old), who experienced a significant job loss of 3.6 percentage points, the largest among all groups, primarily due to their concentration in industries like leisure, hospitality, and retail trade. While prime-age workers (25-54 years old) have the highest participation rate, the participation of older workers (55+ years old) is about half of theirs. By 2023, labor force participation rates for all groups except for those 55+ years old have either returned to or surpassed pre-pandemic levels.

Immigrant Texans Drive State Economy While Filling Vital Workforce Gaps

As of 2021, 5.1 million immigrants call Texas home. This diverse immigrant population now comprises more than one-fifth of Texas’ labor force – about 3.2 million workers. Undocumented immigrants make up 8% of the Texas’ workforce. Immigrant Texans drive our prosperous economy in every sector. Today, new immigrants and asylum seekers quickly become active members in our state’s workforce, often finding employment as construction laborers, cashiers, housekeepers, agricultural workers, and cooks. Immigrant women fill crucial roles and bridge gaps across health care, social care, and service occupations.

Women Are Twice More Likely Than Men to Work Part-Time Jobs

In 2023, 14.9% of Texans were employed part-time, meaning that they worked less than 35 hours a week across all their jobs. The flexibility to determine working hours is crucial for balancing job and family duties. For many, meeting the necessary responsibility of caring for children or elderly family members is simply impossible with a full-time job. As the burden of child and family care often falls on women, it is understandable why women work part-time at twice the rate of men (20.6%). However, working part-time to meet the demand of balancing multiple jobs and family responsibilities often leads to reduced wages, lack of health and retirement benefits, and restricted entry into higher-paying positions.

Policy Spotlight: Paid Family Leave Improves Workforce Retention and Offers Society Wide Returns

During birth or adoption, Texan parents often face an impossible decision: either prematurely leave their babies with a child care provider if affordable care is available, or risk financial instability and leave their jobs to care for their children. In 2023, 72% of working Texans (10.5 million) did not have access to paid family leave, and 64% (9.3 million) workers did not have access to unpaid family leave. 

If the state of Texas provided paid family leave, our state workforce would have an estimated 602,000 more workers. Every Texan estimates a state administered paid parental leave social insurance program covering all full-time workers would cost $1.1 billion annually – approximately less than 1% of the 2024-2025 state budget. This cost estimate is minimal  given that the state legislature carried over a $33 billion balance last budget cycle. State investment in paid parental leave can offer returns as high as 20 times the cost. Texas can afford to make this strategic investment in a social insurance program that working families and businesses need.

Working Texans in Food Service, Health, and Safety Occupations Are Underpaid and Undervalued

The Texas economy exhibits impressive resilience, enjoying high and sustained levels of employment across a wide range of industries.

In 2023, most Texans worked in five main areas: 

  1. Professional and business services,
  2. Government,
  3. Health care and social assistance,
  4. Retail trade, and
  5. Accommodation and food services. 

In 2022, the professional and business services sector became the biggest industry in Texas, making up 15.3% of all jobs at 2.1 million. This is a jump from 14% in 2018, when it accounted for 1.7 million jobs. Government jobs are in second place, making up 14.7% (2 million jobs).

The other sectors – health care and social assistance (1.6 million), retail trade (1.4 million), and accommodation and food services (1.3 million) – collectively comprised 31.8% of total employment (4.2 million Texans), down from 32.2% in 2018. Texans working in these areas are often paid poorly despite making up an important portion of the workforce. 

The leisure and hospitality sector, including accommodation and food services and arts, entertainment, and recreation, faced the second-largest decline in employment during the pandemic (15.5%). Black women, Hispanic women, Asian Americans, and Pacific Islanders nationwide (both men and women) experienced disproportionate job losses in the leisure and hospitality industry. Since these workers are less likely to be found in higher-paid management professions, even within the industry they face higher job insecurity in not being able to work from home. 

All work is important and deserves dignity. Yet, closer examination of the largest three sectors reveals that a significant cohort of our peers are underpaid and undervalued. Within these areas of work, 2.4 million Texans work in major job occupations that are underpaid, with a median wage below $15 per hour or $31,200 annually. Fifty-one percent of these Texans work in food and preparation, 24% in health care support, 15% in buildings and groundskeeping, and 9% in personal and child care. Though they make up a significant share of the labor force, their crucial roles – preparing and serving meals and beverages, fostering the overall health and wellness of adults and children, and maintaining the safety and cleanliness of our surroundings – are undervalued.

Occupation Spotlight: State Investment in Care Occupations Will Improve the Lives of All Texans

Despite our daily reliance on care and domestic sector workers, Texas’ care workers are systemically undervalued. This injustice is rooted in historical systems of oppression – including slavery and Jim Crow segregation – when care and domestic labor were performed by people who were enslaved. Federal policies like the National Labor Relations Act, which protects workers’ rights to collective bargaining, purposefully excluded domestic and care workers as a concession to Southern segregationists. Child and home-based care has historically been seen as women’s work and is disproportionately occupied by women of color and immigrant women.

The state government’s underinvestment in the care sector workforce is felt daily by working families seeking affordable child care. Texas’ child care system is in crisis due to a workforce shortage that cannot be resolved by raising pay alone. The median Texas child care worker earns $11.31 per hour ($23,530 per year), and 48.9% of child care workers must take on an additional job to cover their expenses. Currently, Texas parents pay on average $777 per month ($9, 324 per year) for child care while providers struggle to cover their operating costs. The federal government provided stabilization funds to child care businesses and providers during the COVID-19 pandemic, but these funds expired on Sept. 30, 2023. Ten states elected to continue public investment in child care programs and workforces to avoid closures, keep tuition costs down, and bolster an essential public need. But Governor Abbott did not prioritize public investments in child care, which led to increased closures, workforce shortages, and unaffordability. Today, more than half of Texas’ counties are considered child care deserts where there are three times as many children as licensed child care provider slots.

Better Wages for All, Childcare Investment, and Family Paid Leave Will Strengthen Working Texas Families

Texans strive for prosperity, but disparities persist among women, low-wage workers, and marginalized communities. Our state policies do not allow workers to adequately support their families. To achieve shared prosperity and foster a robust multiracial middle class, Gov. Abbott and the Legislature must make long-overdue public investments in Texas’ workforce to close participation gaps (particularly for women) and improve pay and conditions for care and domestic workers. Federal investment and recovery policies shortened the pandemic, prevented a recession, and laid a strong foundation for economic recovery with historic job and wage growth. It is now time for state leaders to enact policies that address the persistent pre-pandemic workforce gaps. 

The Texas Legislature should enact policies that promote dignified jobs and a robust child care system rather than placing the burden on individuals. In doing so, the state will enable workers to adequately care for our families. 

Better Wages and Employment Opportunities

  • Raise the state minimum wage to address the high number of working Texans earning poverty wages.
  • Invest in pre-apprenticeship and DOL-certified apprenticeship programs to improve unemployment rates for youth, rural, low-income, and Black Texans. 
  • Enact a state-administered paid parental leave social insurance program that provides at least 12 weeks of paid leave to parents of a newborn baby or recently adopted child.

Improved Child Care and Early Childhood Education

Support for Caregiver Workers

  • Use the state budget to provide targeted raises for both public and private sector workforces dedicated to caring for our disabled and aging populations. 

Note: The child care policy solutions recommended in this SOWT edition are researched and recommended by Texas’ lead child care experts: Children at Risk and Texan Cares for Children. This State of Working Texans edition research is supported by the Economic Policy Institute. Every Texan lives its values and is proudly represented by Every Texan United, a bargaining unit of the Nonprofit Professional Employees Union. 

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