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Austin’s tech boom comes with plenty of cash—for people in the industry

Is IT job growth widening the wage gap?

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It’s hardly a revelation that Austin has experienced a sustained and profound tech boom over the past few years. Even before the Amazon’s second-HQ search gambit fell publicly and spectacularly apart, several big tech companies (Amazon included, as it turns out) were already pursuing the opposite strategy: quietly but substantially beefing up their work forces in several American cities.

Austin, of course, is one of the chosen (or most effectively branded, depending on your point of view). According to a recent report by the unfortunately named RentCafe (which gets its studies from Yardi), the Austin metro now has the fifth-largest share of IT jobs in the country (6%), surpassed only by San Jose, California; Washington, D.C.; Seattle, Washington; and Madison, Wisconsin.

The area also comes in ninth in the study’s ranking of IT job growth among the country’s biggest metros, showing an 18% boom between 2014 and 2017, adding 60,000 new jobs in that sector.

The problem with all the delicious job growth from that particular sector in this particular metro, however, is obvious if almost completely unspoken: Workers in the tech industry make more money—a great deal more money—than do workers in other fields.

The Rentcafe study reports that tech jobs in the metro area offer average annual salaries of $92,000. The median 2018 salary for a one-person household (i.e., median salary for one person) in the Austin-Round Rock metropolitan statistical area, according to the City of Austin Neighborhood Housing and Community Development Office, was $60,200.

At 11.4%, the wage increase for tech workers in the Austin area over the past three years was also on the high end of those in the study’s “emerging tech hubs.” It’s no surprise that the study finds rents in the area have gone up by 6% between 2016 and 2019—averaging $1,349 per month. Other studies put Austin’s year-over-year rent growth as high as 3.1%—the fourth highest in the nation in the past year.

Taken separately, none of these statistics distinguish Austin from other cities in which the tech industry figures prominently—and the city is no doubt at a particularly dramatic point in a transition other hubs have either gone through or will likely experience in the future. But the combination of lax state regulation, a putative “low cost of living” (due in part to the lack of a state income tax), weak or nonexistent worker protections, and a creative environment now struggling to survive might have positioned Austin for some very particular wage-gap and affordability problems—ones best addressed sooner rather than later.