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November 10, 2022
| 360° in 365 El Paso Takeout |
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Dallas Fed President Laurie K. Logan met with El Paso business and community leaders in mid-October to learn about the region’s strengths, challenges and prospects. El Paso was his second stop. 360° with the 365 Listening Tour President Logan can travel through District 11 to reach out to local voters, represent the district in national policy debates, and be a force for good in the country. Over the next year, this listening and learning will help her and the Dallas Fed identify policy priorities that will have the greatest impact on the region in the long term. Describe the El Paso area and share what was discussed. |
Located on the U.S.-Mexico border across from Ciudad Juarez, El Paso is a center of international trade, part of the fifth largest manufacturing center in the Western Hemisphere, and one of the largest bilateral communities in North America. .
Cross-border commerce is important, with 49,000 daily visitors from Mexico boosting El Paso’s retail and foodservice sectors and accessing its healthcare services. The federal government’s presence is also extraordinary. The metropolitan area is home to Fort Bliss, her second largest base in the Army, as well as important contingents of Customs and Border Patrol and other federal agencies.
El Paso’s population is predominantly Hispanic, and while the local economy is expanding, education and income levels are relatively low. Digital infrastructure is lacking and Internet access is limited compared to other large cities. Strong and thriving institutions such as the University of Texas at El Paso (UTEP) and El Paso Community College are educational anchors. However, the region is experiencing a net outflow of particularly young skilled workers.
During a visit from Dallas Fed President Rory Logan, community and business leaders highlighted three long-term priorities. The first is to increase the depth and breadth of the region’s labor pool by increasing education levels and slowing the brain drain of skilled workers. The second is to attract forward-thinking manufacturing companies to the region through the growth of the aerospace and defense manufacturing sector, which is the focus of UTEP’s research and development.
A third priority is to improve the living standards of low-income households. Part of that is establishing affordable and accessible broadband Internet access.
Educate, attract and retain highly skilled workers
El Paso’s educational standards lag behind the state and nation. According to the 2021 American Community Survey, about 81% of El Paso adults over the age of 25 have a high school diploma, compared with 85% in Texas and 89% in the United States.
Local business leaders cite limited educational backgrounds as part of the difficulty in finding and hiring qualified workers. Complaints like these are widespread, and many companies are having trouble securing jobs for his IT worker, accountant, and nurse.
When Logan visited UTEP leaders, she learned how the university is trying to meet local labor demands. One of her pillars of this mission is to improve access to higher education by increasing acceptance rates and meeting students where they are. Another pillar is to increase the interest of prospective students in UTEP’s more popular programs, such as computer science and nursing.
UTEP has an enrollment of 24,000, and its student body and faculty, in particular, reflect the demographics of the community. 95 percent of students are racial and ethnic minorities, 50 percent are first-generation college students, and the highest proportion of Hispanic faculty in top research. (R1) University.
UTEP and local leaders are also working to promote advanced manufacturing in the region. UTEP’s WM Keck Center for 3D Innovation and the school’s Aerospace Center are developing an ecosystem for additive manufacturing, a computer-controlled process of creating three-dimensional objects by depositing materials in layers, similar to 3D printing. is in the early stages and is running. Aerospace, defense and energy research. The U.S. Economic Development Agency’s Build to Scale program has awarded the center his $1.5 million grant in 2021.
Local leaders told Logan they believe additive manufacturing will build on the strengths of the region and provide an opportunity to revive manufacturing along with quality jobs and higher wages. A local additive manufacturing capability would also help ease disruptions to his chain of supply in the future, they said.
Returning Asian production to Ciudad Juarez fulfills promise
Much of the production from Ciudad Juarez’ maquiladoras (a foreign-owned, Mexico-based manufacturing plant) flows to the United States through the El Paso Trade District, the 12th largest of the country’s 46 trade districts (chart 1).
Proximity and cross-border links to Ciudad Juárez have fueled the growth of El Paso’s service sector industries, complementing manufacturing production and international trade, including transportation and logistics, warehousing, accounting, finance, and commercial real estate. increase.
Neighboring cities often share their economic ups and downs. For example, when China joined the World Trade Organization in 2001, some manufacturing plants and business investments left the region for Asia, with negative effects felt on both sides of the border.
More recently, there have been signs that the trend of offshoring to China may be reversing. Local leaders told Logan that companies with operations in China, Malaysia and Taiwan should move or build new factories in Ciudad Juarez to reduce supply chain risks and avoid U.S. tariffs on Chinese goods. They said they expected a positive knock-on effect to the El Paso economy as demand for logistics and other business services increased. However, a significant increase in cross-border flows of goods, services and people could strain existing infrastructure.
Bridging the Digital Divide
Logan also visited members of Borderplex Connect. Borderplex Connect is a regional coalition of stakeholders investigating ways to improve broadband Internet availability and access. The group is working with the Dallas Fed’s Advancing Digital Inclusion initiative. This initiative helps communities by convening stakeholders and providing training and technical assistance to assess community needs and infrastructure gaps.
Borderplex Connect leaders shared an analysis that found that 43% of El Paso County residents and 27% of businesses do not have access to a broadband connection.
Residents of the Lower Valley, east of the city, have one of the poorest postcodes in the country and are experiencing a digital divide on a scale that limits the ability of the local economy to grow. Without broadband Internet access, simple tasks become obstacles as students cannot do their homework, people cannot apply for jobs or access online banking.
The coalition’s next step is to work with community leaders and residents to develop strategic regional plans to address broadband infrastructure and affordability, as well as IT skills. El Paso County and City are allocating funds for digital equity projects.
Management of international migration to the region
Adding to El Paso’s challenges is the need to address international migration, much of it humanitarian migration from Latin America and the Caribbean. Border Patrol encounters with immigrants will reach record highs in 2021 and 2022. This reflects an unprecedented amount of border crossings.
Immigrants who have been processed and released to the United States may receive assistance from a network of U.S. nonprofit organizations. The El Paso Immigration Welcome Center serves as a connection for immigrants to their chosen destination (often New York or Chicago) once they arrive at the border.
During Logan’s tour of the center, leaders shared how they were particularly nervous when the normally 200 to 300 migrants per day ballooned to nearly 1,000 in three weeks in September. . They noted that almost all immigrants who came to the center were from Venezuela, many were unsponsored, and most had applied for asylum.
Most Venezuelans have been turned back by border officials since a federal rule change on October 12, leading to a sharp decline in travel to El Paso.
Overcome challenges with resilience and vision
El Paso has shown remarkable resilience and adaptability over the decades. El Paso has been exposed not only to economic shifts in both the United States and Mexico, but also to trade and immigration policies and, most recently, pandemic policies closing all borders to all but essential activities and personnel. After all the shocks, the region has adapted, gained a foothold and continued to thrive.
El Paso officials have a vision of building on the region’s strengths for the future. Whether it is investing in higher education, fighting the digital divide, or working together to attract new business investment, the right move today is to boost economic growth, improve educational attainment, and empower communities. It should slow the outflow.
About the author
Luis Torres
Torres Senior Business Economist at the San Antonio Branch of the Federal Reserve Bank of Dallas.
Caton Hines
Hines is an economic programmer/analyst in the Research Division of the Federal Reserve Bank of Dallas.
11th District 360° with 365 Tour: Visit El Paso
October 18th
- Reception and dinner at the El Paso branch with the Dallas Fed and El Paso branch board and advisory board members.
October 19th
- Meeting with leaders from the University of Texas at El Paso. Tour of WM Keck Center for 3D Innovation and his UTEP Aerospace Center.
- Meet with members of Borderplex Connect to explore the widening digital divide in El Paso County.
- Luncheons and roundtables with CBRE business and community leaders. Greater El Paso Credit Union. School of Business, University of Texas at El Paso; Providence Hospital; United Way, El Paso; Tekma Group; El Paso Chamber of Commerce; Western Heritage Bank; Borderplex Alliance and Sundt Construction.
- Briefing and tour of Fort Bliss. This includes a meeting with base command to discuss the economic implications of the installation.
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Visit the El Paso Fusion and Migrant Welcome Center to observe and learn about efforts to assist border crossers arriving in the United States
Economic Development Labor Manufacturing Texas Mexico and border areas
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