The Texas Job Strategy
By David Lammers
The job market is strong now for engineers with semiconductor manufacturing skills.
In Dresden, Germany, GlobalFoundries is hiring many of the former Qimonda manufacturing engineers. “I don’t want to say that we are happy about Qimonda’s bankruptcy,” a GlobalFoundries manager said. “But last month we hired about 150 people in Dresden, and roughly half of them were available to us because of what happened at Qimonda,” he said, adding that experienced talent is becoming more difficult to find in Europe.
GlobalFoundries is generating another wave of hiring in the Saratoga Springs area: Novellus Systems, for example, has a number of jobs openings there to support equipment being installed at the GlobalFoundries Malta fab.
Abu Dhabi also is looking for talent as it prepares to launch its semiconductor manufacturing initiative.
In Austin, Samsung Semiconductor Austin is hiring an additional 300 engineers and technicians talent for its $3.6 billion logic expansion, where SoCs for Apple and other customers will be fabricated. And Samsung is staffing a logic design center in Austin as well. Samsung has more than 400 job openings on its U.S. Web site.
Texas is actively recruiting California companies to move to Texas, touting the lack of an income tax in the Lone Star state. The Texas strategy, explained veteran Texas journalist Neal Spelce, is to avoid an income tax at nearly all costs, thereby luring CEOs from California and other higher-tax states. By convincing C-level executives that their taxes will be much lower in Texas, the belief is that some of these managers will move their companies to Texas. In turn, jobs will be more available here, stimulating spending and home buying (Texas relies on sales and property taxes for most of its revenues). Eventually money will trickle down to the school districts, boosting the per-pupil spending.
(UPDATE: The Austin American-Statesman reported (April 6) on a visiting delegation of California officials and businessmen, seeking to learn why some California companies have located operations in Texas rather than in California. The report quotes the Texas Workforce Commission, which said Texas’ unemployment rate was 8.2 percent in February. The California Employment Development Department said the Golden State’s seasonally adjusted unemployment rate was 12.2 percent in February.)
Gov. Rick Perry has been touting his low-taxes-equals-job-creation strategy to Californians with increasing frequency. Perry said he met with James Plummer, dean of the Stanford School of Engineering, who advised Perry to promote a culture of entrepreneurship at the University of Texas at Austin.
Plummer subsequently told the Austin American-Statesman “we certainly were not making any prediction of whether Austin could be or should be the next Silicon Valley. It certainly has many of the elements to be the kind of place Silicon Valley is.”
From another vantage point Texas is a state in fiscal and social crisis. It consistently has one of the lowest rankings in the United States in educational levels (45th of 50, by one list). Rather than boosting educational spending, tens of thousands of Texas teachers are likely to lose their jobs this year because of a shortfall in tax revenues.
In Austin, for example, the economy is in fairly good shape. The housing market never collapsed, and people continued to move to Austin throughout the downturn, attracted by new companies starting up or moving here. With stores and restaurants relatively crowded again, one might assume that education would also be well supported. Instead, the Austin Independent School District is in the process of laying off about 1,000 employees, the majority of them teachers, because of a shortfall in state funding due to the over-reliance on property and sales taxes.
Texas is a great place to be a highly paid CEO, or even a well-paid engineer. For teachers, at least this year, not so much.