This month’s edition of the Greater Houston Partnership's Houston: The Economy at a Glance provides an in-depth analysis of the nation's 20 most populous metro areas, exploring how metro Houston compares to its peers in terms of diversity, educational attainment, spending and more.
Houston: The Economy at a Glance is a free monthly publication, which offers the latest data along with expert commentary on the Houston region’s economy.
To subscribe to Glance, please click here.
Houston and Our Peers
In the October issue of Houston: The Economy at a Glance, the Partnership analyzed data from the U.S. Census Bureau’s American Community Survey (ACS) to show how the region’s economic and demographic profile has shifted over the past 10 years. In a nutshell, Houston has become better educated and more ethnically diverse. Workforce participation has declined, however. A large portion of the population remains uninsured. And for many households, income has not kept up with inflation.
In this issue, the Partnership examines ACS data for the nation’s 20 most populous metro areas, exploring similarities and differences between metro Houston and its peers. Metro Houston includes Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller Counties. In a nutshell, metro Houston has one the youngest and most diverse populations in the nation. The region also has one of the nation’s largest foreign-born populations. But we lag in educational attainment, labor force participation, and health care coverage. Houston also has the highest share of residents whose income falls below the poverty line. Details follow.
Race and Ethnicity
Houston remains the nation’s most racially and ethnically diverse metro. The Partnership defines “diverse” as being the most evenly distributed among racial/ethnic groups. No individual race or ethnic group represents a majority of the region’s population. Other metros also have large racial/ethnic populations, but they lack balance among the groups. San Francisco has large white and Asian populations but fewer African Americans. Miami has large white and Hispanic populations but few Asians. Detroit has large white and black populations but few Hispanics.
Houston’s ethnic diversity has long been a strength for the region, providing cultural, business and civic opportunities not available in less diverse metros.
In ’18, nearly one in four Houstonians was foreign-born—far more than the one in seven nationally. Only four other metros—New York, Los Angeles, Miami and Chicago—have larger foreign-born populations than Houston.
Over the past decade, the foreign-born population in metro Houston grew by nearly one-third, from 1.2 million in ’08 to 1.6 million in ’18. To put that in perspective, Houston’s foreign-born population now exceeds the total populations of the Jacksonville, FL, Oklahoma City, OK, or Raleigh, NC metros.
A large foreign-born population is important for several reasons.
Immigrants are risk-takers. They left their homes and families to start new lives in a different country. Risk-taking begets innovation, which spawns new technologies and new growth opportunities.
Immigrants are entrepreneurial. According to the Small Business Administration (SBA), immigrants are twice as likely to start a business as native-born citizens.
Immigrants maintain ties to their homeland, facilitating the flow of trade. When the Houston Airport System works with foreign flag carriers, a question routinely asked is, “What’s the size of the expat and immigrant population?” The airline wants assurances that all the seats will be filled when a plane leaves the runway.
The presence of a large expat and immigrant community is important to foreign corporations seeking to open offices in Houston. First, they want to follow in the foot-steps of other successful companies. Second, they want to know their workers on temporary assignment will feel comfortable living here.
Growth in an immigrant community is self-reinforcing. A foreign national is more likely to relocate to a city with a large population of his countrymen.
A growing immigrant community reflects dynamism in the local economy. It’s rare that immigrants move to a metro whose economy is dying and offers limited job opportunities. That’s why they left home in the first place.
Labor Force Participation
The labor force participation rate is the share of the working age population who are either employed or unemployed but actively seeking work. The U.S. rate peaked at 67.3 percent in early ’00 and has trended downward since. It has fluctuated between 62.4 percent and 63.2 percent the past five years.
Houston’s rate peaked at 69.4 percent in ’08 and has also declined over time. In ’18, Houston’s labor force participation rate was 66.4 percent, the midpoint of its peers. Denver, with a booming economy and a young and well-educated workforce, has the highest rate among the top 20 metros. Tampa, whose population tends to skew older, has the lowest rate.
Why should Houston’s lower rate be a concern? A lower labor force participation rate is associated with slower economic growth and lower tax revenues.
Continue reading this month's Economy at a Glance for more in-depth analysis of the nation's 20 most populous metro areas, an employment update and more details regarding the Houston Region Economic Outlook event in December.