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Texas Employers Rush to Hire Katrina Evacuees

October 7, 2005
Related Topics: Candidate Sourcing, Featured Article, Staffing Management
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With unemployment in Texas at 5.1 percent--the lowest rate in three years--employers in the Lone Star State have been lining up and competing vigorously to hire Katrina evacuees. They’re not just doing it out of altruism, either. They need the hires.

    In the past two years, more than 268,000 jobs in a wide variety of industries were created in the state. "The economy is still growing," says Clayton Griffis, a labor market analyst with the Texas Workforce Commission, the state’s agency for matching up employers with employees.

    Of the 300,000 Katrina evacuees who ultimately wound up in Texas, 50,000 to 60,000 will be looking for jobs, according to Diane Rath, director of the Texas Workforce Commission. They’re very likely to find them. "Employers in Texas are seeing a big expansion, and they need more workers," Rath says. "(The Katrina evacuation) is an opportunity for Texas employers to connect with the workforce they need."

    One of those employers is Goodwill Industries of Dallas. It’s one of the 207 independent community organizations that make up Goodwill Industries International, which generated $2.4 billion in revenue last year and has 80,000 employees worldwide.

    Following Katrina, Goodwill Industries of Dallas hired six people right away, and it plans to hire at least three more. "We’re filling existing positions as well as creating them for new needs," says Colleen Hamilton, director for development. Ironically, some of those new jobs are due to the donations coming in for Katrina victims. Goodwill jobs range from unskilled, such as sorting and hanging clothing, to skilled, such as driving trucks or assembling furniture.

    "The kinds of jobs we offer are those that people can do with few skills," Hamilton says. Pay ranges from above minimum wage to just under $10 per hour. The organization also offers training in computer literacy, job readiness and GED certification. "We have a finite employee base here, but we can provide training for jobs and the expertise to get a job," Hamilton says.

42 jobs open
    Moving from nonprofit to very profitable, jobs in the oil-rich Permian Basin--the region around Midland, Texas--are plentiful, while people available to fill those jobs are in short supply. "We have the lowest unemployment rate in the state," says Morris Burns, executive vice president of the Permian Basin Petroleum Association. "It’s about 3.9 percent. Essentially, we have full employment."

    The association's members stand ready to hire anyone with oil field experience. "One drilling contractor is offering to put 42 people to work," Burns says. "Every drilling or service contractor is always looking for employees. The jobs need to be filled."

    On the second Friday in September, Burns heard about a group of Katrina evacuees with oil field experience who were rumored to be in Huntsville, Texas. It took the association a weekend to get there to offer them jobs. "By then, they’d already been hired," Burns says. "If you’re an oil field worker, the helicopters will swoop in and pick you up."

    The association had nearly 100 oil-field related jobs open for immediate hire as of mid-September, with more coming on line daily. There are other jobs, such as for nurses. There’s also a fund of more than $130,000 created by association members to help out with food, transportation, housing, medical care or anything else "for anyone coming to Midland or the Permian Basin for jobs. It doesn’t have to be oilfield-related," Burns says.

    Burns is sending association volunteers to job fairs all over the state to recruit evacuees for the Permian Basin. Other than getting to recruits before they’re hired, Burns says the biggest problem is the logistical one of contacting evacuees.

    Burns says a starting floor hand can get $17 or $18 per hour. "Wages for oil field workers right now are phenomenal."

    Keppel AmFels’ plant in Brownsville, Texas, which builds marine rigs for oil and other industries, faces the same problem as the Permian Basin--too much work, not enough people. Following the hurricane, the plant created 100 jobs for qualified Katrina evacuees. "We can always use more people," says Gilbert Elizondo, vice president of human resources.

    Positions include plate fitters, pipe fitters, welders, joiners, carpenters, heavy-equipment operators and machinists. Standard pay for these jobs ranges from $10 to $15 per hour, and Elizondo says evacuees will be offered the same rates. "No placements have been made yet," he says. "The process is moving slowly. People are waiting to see about insurance and their homes before going elsewhere for employment."

    Like the Permian Basin Petroleum Association, Keppel AmFels will also offer assistance to evacuees to go to Brownsville, but Elizondo says it will be on a case-by-case basis. A first step was a barbecue benefit for evacuees that raised $2,000. Keppel AmFels matched that amount.

Tight labor market
    With a workforce of 11.2 million people, Texas and its employers will easily absorb the 50,000 to 60,000 potential workers Katrina created. "For Texas overall, the effect is zero," says Jon Hockenyos, managing director of Austin-based research firm TXP.

    For the same reason--their small number--Katrina evacuees who get jobs in Texas will have no effect on wages, nor will they put Texans out of jobs, according to Bernard Weinstein, a professor of applied economics at the University of North Texas in Denton. "There just aren’t enough of them," he says.

    A bigger concern is the evacuees’ skills. "The logical assumption is that it’s a low skill set," Hockenyos says. The Texas labor market can still absorb those workers in hospitality and other consumer-related businesses because the turnover rate in those industries is so high. Weinstein lists even more fields where those with few skills can get jobs: residential construction, landscaping, health care and tourism.

    Long-term effects of the Katrina influx on Texas employers are unknown. "No one can tell what kind of impact the evacuees will have right now," Griffis says. "No one knows where these people will end up and find work."

    In the current tight labor market, Texas employers welcome those who fled Katrina, and they’re hiring them as fast as they can. What Burns says about workers in the Permian Basin is true for the entire state: "Right now, there’s a whole lot more demand than supply."

For more information:
Texas civilian labor force estimates
Total jobs in Texas, 1998-2005
Unemployment rates, Texas vs. U.S.

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