Chapter | 2 The Changing Race and Ethnicity of Workers

❖ How can balance cultural challenges?

that growth is concentrated in only a few Introduction geographic areas. Texas is a state in transition. A Rural Texas is losing people at a faster fast-growing population and other key rate than in the past. In 2000, Texas had changes are combining to create the 68 counties with declining population. perfect storm for employers, according By 2008, the U.S. Census Bureau to Karl Eschbach, former Texas state estimated that 119 counties in Texas demographer. were losing population. Even the midsize “A lot of change is happening in Texas “micropolitan” cities of fewer than 100,000 at the same time,” Eschbach noted. The residents are seeing little growth. following key trends are at play in this The lion’s share of population growth perfect storm for Texas workers: in Texas is concentrated in the Big 4 • Baby Boomers, who are reaching metropolitan areas of -Fort Worth, retirement, make up a significant portion , and Austin. These of the current Texas workforce. cities saw their urban populations grow • The number of Hispanic workers by 15% from 2000 to 2008, according to continues to increase. Census Bureau reports. • Texas continues to struggle with In addition, the big cities’ suburban worse-than-average high school dropout areas grew almost 40%. “Available land and rates. relatively inexpensive housing is helping to drive growth for the big suburbs,” • Overweight workers are developing Eschbach said. diabetes and other chronic health problems, leading to rising health costs These population trends are expected to for companies. continue. “The competition for high-skill “The Big 4 will likely expand, especially workers in this state will soon get intense,” in the suburbs. They will likely enjoy a Eschbach said. “The real big, bad thing sizable competitive advantage over their rural would be if the high-dollar job creation and micropolitan neighbors,” said Charles stops in Texas because of a lack of educated Gilliland, research economist at the Texas talent, while the low-education workforce A&M University Real Estate Center. “I don’t continues to grow.” see anything in place to halt the movement from rural areas to the towns and cities.” Opportunity lay in that growth: the | What’s Happening increasing population will need houses, infrastructure and shopping, all at Some existing population trends in reasonable prices. “Devising solutions will Texas started to speed up in 2009. As it provide opportunities for creative minds to enters a new decade, Texas is the state with prosper, while making Texas a stronger and the fastest-growing population; however, more vibrant place,” Gilliland said.

12 | CHAPTER 2 Meanwhile, obesity rates have also been effects on children’s health have not been on the rise across the nation, and Texas seen. is no exception. An overweight workforce “Teachers are worried about losing their concerns Texas employers, say many job over test scores. They’re not going to human resources managers. About one in lose their jobs if the kids are overweight,” three Texas schoolchildren is overweight, said Brown. which raises concerns about the future Another factor at play in the changing workforce. demographics of Texas is ethnicity, “Couch potatoes are not going to be as especially growth in the Hispanic good of workers as people who are fit and population. “Hispanic growth is prevalent have more energy,” said Shelton Brown, everywhere in Texas, and the Anglo professor of public health at the University population is only growing in the suburbs of Texas at Austin. “It’s hard to make a case — and it is barely growing,” said Steve that diabetes and obesity improve worker Murdock, a sociology professor at Rice productivity. And companies are concerned University and former state demographer. about productivity. This is an economic “The cities of Texas are increasingly issue for Texas.” Hispanic cities, and you’re seeing it first Brown is encouraged that Texas schools in the schools, where the majority of kids are starting to roll out programs to combat moving through the school system now are obesity and require more exercise, though Latino.”

“Couch potatoes are not going to be as good of workers as people who are fit and have more energy. It’s hard to make a case that diabetes and obesity improve worker productivity. And companies are concerned about productivity. This is an economic issue for Texas.“

— Shelton Brown, University of Texas

CHAPTER 2 | 13 However, the rate of high school | The Data graduation for the Latino workforce does In this new decade, the first members not equal that of Anglo counterparts in of the Baby Boom generation (born from Texas. Nationwide, the percentage of 1946 to 1964) will turn 65. While Baby American students who earned a high Boomers account for a little more than a school diploma in four years in 2006 was quarter of the Texas population, they are 69.2%, whereas Texas graduated 65.3% of a big part of the workforce — about four its students, according to the researchers million employees, or more than one in at Education Week and the Alliance for three workers in Texas. Excellent Education in , D.C. As the Baby Boomers, a group made Breaking down dropout rates by gender up mostly of white people, move to does not improve the numbers. Male retirement, the number of Hispanic students in Texas posted a 61% high school residents and workers in Texas continues to diploma rate (versus 65% nationally), grow. For decades, the Hispanic population and female Texas students had a 69% in Texas has grown faster than other ethnic rate (versus 72% nationally). Such below groups. Still, the pace of this growth has average high school completion rates have quickened in recent years. From 2000 to raised the ire of Texas employers. 2007, the Census Bureau calculated that The Alliance also points out a key racial the Anglo population in Texas grew by disparity among the following Texas high about 12%, the African-American and Asian school graduation rates: populations grew by about 10%, and the •  Asians: 85% Hispanic population grew by more than • Anglos: 77% 60%.  Meanwhile, birthrates are also changing. •  Hispanic: 56% The national birth-to-death rate for the •  : 53% United States in 2005 was 1.3 births for •  Native Americans: 52% every 1 death, according to Census Bureau Though this disparity follows national data. In Texas, 1.5 non-Hispanic babies are high school trends, Texas employers are born for every 1 death, whereas 8 Hispanic not pleased to note that more than half babies are born for every 1 death. of Texas students are in the educationally Eschbach expects these shifting struggling Hispanic population. demographic trends to become even more Another concern of employers is dramatic in the coming decade. Older the types of degrees that Texas college Anglo and African-American populations graduates earn. In particular, human in Texas are past their childbearing resources managers express concern about years, whereas younger Latino and Asian the lack of women and minorities who hold populations continue to grow, a result of degrees in science, technology, engineering high birthrates and continued immigration. and math (STEM). These younger Hispanic and Asian workers will soon dominate the Texas workforce. In 2009, the Texas Higher Education

“The majority of the executives in this state within 10 to 20 years will be Latino.”

— Steve Murdock, Rice University

14 | CHAPTER 2 Coordinating Board reported that women Human resources managers need to make up 58% of state university graduates do a labor analysis to determine which but only 23% of the STEM graduates, skills their companies will need in a few and Hispanics make up 24% of university years and which skills are available now graduates but only 20% of the STEM in their communities. The results may graduates. African-Americans fare worse: shock corporate executives into becoming 9% of all university graduates but only 6% involved in their local school systems, said hold a STEM degree. Nestor Rodriguez, a sociology professor Ethnic disparity is also seen in obesity at the University of Texas Population rates. Texans, particularly the African- Research Center. American and Hispanic populations, weigh “Latinos are at a disadvantage,” more than in previous generations. In Rodriguez said. “To prepare for the Texas “Instead of seeing fact, obesity rates in Texas are outpacing workforce you need more education, them as foreigners, national trends. The same holds true but [Hispanic] dropout rates are some of for diabetes, a disease linked to obesity. the highest. We need to press for higher companies need According to Eschbach’s research, 1 in 10 education for Latinos, but not necessarily to see Latinos as Texans had diabetes in 2007, compared at the university level. Associate’s degrees customers and to 1 in 13 Americans nationwide. The need to be promoted more, but community following list shows the ethnic breakdown colleges are left to promote themselves workers. You’ve of Texans with diabetes in 2010: alone.” got to interact •  12% overall in Texas Rodriguez sees a key problem: Hispanics with our Latino •  11% Anglos often lack what he calls racial capital — the understanding of how the business community because •  15% African-Americans world works and how to network in this community •  13% Hispanics business. Many white parents expose their is a reality of the •  9% Asians and other ethnicities children to career paths and behaviors Eschbach predicts that the diabetes rates of the business world; however, too workforce.” for Texans will grow from 10% in 2007 to many Hispanic children miss out on this 12% in 2010, reaching 17% in 2020 and exposure, Rodriguez noted. — Nestor Rodriguez, 24% in 2040. Rodriguez points out that some United University of Texas at Obesity has a direct effect on employers. Way agencies are linking Texas companies Austin Overweight workers cost American private with local Hispanic and African-American companies an estimated $13 billion a young people through summer internships year, and obesity-related health issues are and school mentoring. These efforts help responsible for an estimated 27% of annual students understand potential careers and medical insurance premiums, according to expose them to the workforce. But more the National Business Group on Health in initiatives are needed, especially within the Washington, D.C. Hispanic community of Texas. “Instead of seeing them as foreigners, companies need to see Latinos as customers | So What? and workers,” Rodriguez said. “You’ve got “In Texas, it’s soon going to be a bunch to interact with our Latino community of old Anglos being taken care of by a because this community is a reality of the bunch of young minorities. If you don’t workforce.” believe me, go to a Texas nursing home Larger numbers of Hispanic workers and see the young, female non-Anglos means more Hispanic executives and taking care of the old Anglos,” said Steve corporate and political leaders, say Murdock, former state demographer who demographers. is now employed by Rice University. “This “The majority of the executives in this is happening across the country. The state within 10 to 20 years will be Latino,” Texas of today will be the United States of Murdock predicted. tomorrow.” CHAPTER 2 | 15 “We have a tremendous opportunity in Texas because we have this young workforce that we can still help. Many states are facing an aging population but don’t have the cadre of young workers coming up, and they’re really going to be in trouble compared to us.“

— Sally Andrade, Andrade & Associates

In addition, the Hispanic middle class have not gotten the messages about — those with a current annual household career paths or how to go to college. And income of more than $100,000 — is also Hispanic students who go to college are growing and will likely flex its political and reluctant to take out student loans for fear investment muscle in Texas in this new of encumbering their family’s financial decade. health. This aversion to debt also causes At current growth rates, Hispanics Hispanic students to limit their higher will become the majority population in education options to part-time status at Texas by 2021. “When Latinos become nearby state colleges, which limits both the majority of the elites, it will make a their academic progress and their career difference in social policies,” Eschbach said. options and slows growth of an educated workforce in Texas, Andrade said. Improving education for this new workforce majority is the most important “We have a tremendous opportunity issue facing Texas, said Sally Andrade, a in Texas because we have this young national education consultant and head of workforce that we can still help,” Andrade Andrade & Associates in El Paso. said. “Many states are facing an aging population but don’t have the cadre of Numerous studies by the Intercultural young workers coming up and they’re Development Research Association in San really going to be in trouble compared Antonio and other education researchers to us.” have shown that many Hispanic students

16 | CHAPTER 2 Chapter 2 | Suggested Strategies

 Think Globally, Plan Regionally people] learn in the middle class from seeing their fathers behave or visiting them at the office,” said Stephen Kleinberg, “I recommend that human resources managers get out a sociology professor at Rice University in Houston. and speak to every high school in their area — especially “Companies that are smart will adopt schools and bring those with large Latino populations — at least once a year kids to see how their workers work and behave.” With to discuss what they expect from workers,” said Andrade. four generations of workers now in the workplace, Texas “We also have to change expectations. Employers and organizations have plenty of opportunities for this tacit their CEOs have got to insist to members of the legislature knowledge transfer. and the state board of education that they expect all children to graduate from high school and most of them to Kleinberg and his students have conducted public go to college. It’s a moral and an economic imperative.” opinion polls of Houston-area residents for three decades. These surveys show that respondents who are 60 years old Andrade, Rodriguez, Murdock and other experts and older are 70% Anglo, whereas 75% of the respondents suggest that the young Hispanic population can be who are younger than 30 years old are non-Anglo. a strength of the Texas economy, if they receive the necessary education and skills training. “Our city and our state will not succeed if we don’t do more to educate young Latinos and African-Americans,” Community colleges are becoming the modern career Kleinberg said. “They will be the workers and the voters linchpin. With tuition costs rising at many universities, of tomorrow, and there is no force that can stop that. If many students are opting for the community college path these young Latino and African-American people don’t get for higher education. Community colleges appear to need educated more, then our economy in Texas is done.” more interaction with high schools, as well as interaction with employers, to link their curricula with both the Houston has made strides in this area with the skills being taught in high schools and the personal and Management Leadership for Tomorrow program, which technical skills demanded by local managers. is a training program that offers Hispanic and African- American high school students the opportunity to take The workplace also may be the place to address the classes in business and leadership and spend time shadowing other challenges raised by a shifting population in Texas, managers inside companies. Shell, Marathon Oil, including worker health and retirement of older workers. Transwestern Commercial Real Estate and the Houston The National Business Group on Health says all Rockets are some of the companies that participate in the companies should create health programs in the workplace, Management Leadership for Tomorrow program. including, if need be, incentives and public praise for “If Texas is going to succeed, it has to be inventive workers who improve their health and lower the insurance with its young Latinos and African-Americans,” Kleinberg costs to the employer. Employers also should consider said. “All companies have a stake in this. There is a critical bringing more teenagers into the workplace, especially business case for investing in education and managing this teenagers of ethnic origin. Including them in the workplace ethnic transformation, but businesses are focused on the exposes them to jobs, knowledge, and work behaviors. bottom line and the quarterly report. Encouraging older workers to interact with younger workers can promote mutual understanding and improve “These new realities require that we think more long communication across both ethnic and age groups. term,” Kleinberg added. “The 50-year-old executive at Exxon may succeed, but that doesn’t guarantee that Texas “There’s a tremendous amount of soft skills that [young will succeed.”

“There’s a tremendous amount of soft skills that [children] learn in the middle class from seeing their fathers behave or visiting them at the office. Companies that are smart will adopt schools and bring kids to see how their workers work and behave.”

— Stephen Kleinberg, Rice University CHAPTER 2 | 17