market assessment - The Borderplex Alliance

Transcription

EMPOWERED BY THE FUTURE
THE BORDERPLEX ALLIANCE
MARKET ASSESSMENT
COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY
NOVEMBER 13, 2014
Borderplex Alliance Strategic Plan
Preface
The best plans for economic development are living, breathing strategies made up of the goals set by communities to grow and redefine themselves in a
constantly changing world. At its heart, economic development is about ensuring that healthy communities have a strong quality of life as defined by
their stakeholders. It is about taking control of the future, creating jobs, building a better workforce, helping existing businesses grow and attracting
diverse new types of industries. Economic Development begins by bringing together people, businesses, schools, governments, law enforcement,
hospitals and other segments of the community to define a collective vision.
Effective economic development initiatives help lower poverty and crime rates, build better schools and weather hard times. A good plan encourages
businesses and residents to work together to tackle and solve issues within the area. It identifies strengths and assets a community can leverage to attract
powerful industries and to become a strong player in global markets.
“The time is right for regional
collaboration, but that door
will not be open forever.”
--Stakeholder Interview Respondent
Volunteer Solar Power Installation, Las Cruces
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Acknowledgments
None of the work of an economic development strategy can be conducted in
a vacuum, and no attempt to navigate the regional economy can be
successful without insight and support from local stakeholders. El Paso,
Juárez and Las Cruces each has a long history of pulling its stakeholders
together in times of challenge to plan and implement effective change. That
local spirit of initiative, when applied regionally, will be crucial to the
development and implementation of an economic strategic plan for North
American Borderplex Region. Collective insight from the three communities
has significantly benefited the assessment of the Borderplex regional market.
and visionary members of the Borderplex Alliance Economic
Development Strategic Plan Steering Committee for their insight,
feedback and direction in the development of the plan to unite the
North American Borderplex communities as one powerful regional force
for optimal economic development.
The following regional market report was developed with guidance and input
from residents, business leaders, real estate companies, educational
institutions, utility companies and other community groups. In August,
AngelouEconomics conducted site visits to El Paso, Juárez and Las Cruces,
talking with more than 120 stakeholders during private interviews and focus
groups. On Sept. 25, online business and resident surveys in both English and
Spanish were launched, offering an opportunity for every stakeholder in the
regional community to engage in the economic development process. The
surveys remained open until Oct. 31. In total, 865 people responded to the
survey, 562 residents and 303 businesses.
AE would like to thank the Borderplex Alliance staff for their valuable support
in this effort, in particular CEO Rolando Pablos, EVP Marcos Delgado, VP of
Education and Workforce Development Lydia Nesbitt, and Communications
Director Laura Rodriguez. We also thank the Greater El Paso Chamber of
Commerce, the El Paso Hispanic Chamber, the Las Cruces Chamber of
Commerce, AMAC INDEX Juárez, the University of Texas in El Paso and New
Mexico State University for their participation and assistance.
Finally, we offer our special thanks to Chairman Pat Patton and the tireless
La Equis Monument, Juárez
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Acknowledgments (continued)
Borderplex Alliance Strategic Plan Steering Committee
“Never doubt that a small
group of thoughtful,
concerned citizens can
change the world. Indeed
it is the only thing that ever
has.”
—Margaret Mead
Pat Patton, Chairman . . . . . . . .
Garrey Carruthers . . . . . . . . . . .
Bill Conner . . . . . . . . . . . . . . . .
Roberto Coronado . . . . . . . . . .
Ed Escudero . . . . . . . . . . . . . . .
Miguel A. Fernandez . . . . . . . .
Benito Fernandez . . . . . . . . . . .
Tom Fullerton . . . . . . . . . . . . . .
Kiel Hoffman . . . . . . . . . . . . . . .
John Hummer . . . . . . . . . . . . . .
Woody Hunt . . . . . . . . . . . . . . .
Ivan Jaime . . . . . . . . . . . . . . . . .
Chris Kleburg . . . . . . . . . . . . . . .
Jeff Moseley . . . . . . . . . . . . . . .
Martha Rochford . . . . . . . . . . .
Jorge Ruiz . . . . . . . . . . . . . . . . .
Annette Gutierrez . . . . . . . . . .
Richard Schoephoerster . . . . .
Emma Schwartz . . . . . . . . . . . .
Joyce Wilson . . . . . . . . . . . . . . .
Jacob Prado . . . . . . . . . . . . . . .
Patrick Schaefer . . . . . . . . . . . .
Davin Lopez . . . . . . . . . . . . . . .
Gilbert Mesa . . . . . . . . . . . . . .
Guadalupe de la Vega . . . . . . .
Ian Brownlee . . . . . . . . . . . . . .
Elia Mares . . . . . . . . . . . . . . . . .
Jim Peach . . . . . . . . . . . . . . . . .
Alejandra de la Vega . . . . . . . .
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El Paso Electric
New Mexico State University
El Paso Electric
Dallas Federal Reserve, El Paso
Sierra Finance
Plan Estrategico de Cuidad Juárez
Desarrollo Economic de Cuidad Juárez
University of Texas – El Paso
Pioneer Bank
Steinborn Realty
Hunt Companies, Inc.
Union Pacific
Capital Bank
Moseley Griffiths
Wells Fargo
Baker & McKenzie
Rio Grande Council of Governments
University of Texas – El Paso
Medical Center of the Americas
Upper Rio Grande Workforce
Consul General of Mexico
The Hunt Institute
Mesilla Valley Economic Development Alliance
IDI Gazeley
Grupo de la Vega
Consul General of the U.S.
Philanthropist
Grupo de la Vega
Table of Contents
Preface………………….………………………………………………………………....………………
2
Acknowledgements ………………………………………………………………...………………
3
Project Process……………………..…………………………………….…………….……………..
6
Background……………………………………...………………………………………………………
7
Executive Summary..….………………………………………………………………..………….
10
SWOT………………….………………………………………………………………….………….
13
Regional Assets…....................................................................................
18
Challenges…………………………………………………………………………………………...
23
Factor Analysis.............................................................................................
25
Quality of Life…………………………………………………………………………………….
26
Workforce and Education………………………………………………………………….. 40
Business Climate……………………………………………………………………………….
52
Infrastructure…………………………………………………………………………………….
61
Stakeholder Survey Analysis………………………………………………………….………..
72
Next Steps ……………………………...…..............................................................
76
Appendix ……………………………………..............................................................
80
About AngelouEconomics…………………………...…..........................................
107
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El Paso Cowboy Statue
Project Process
STRATEGIC
ANALYSIS
Report
MARKET
ASSESSMENT
TARGET
INDUSTRIES
Site Visit
Report
Presentation
Report
Presentation
Aug. 24-28
Presentation
Nov. 13
Jan. 15
April 9
STAKEHOLDER
ENGAGEMENT
Visioning
Benchmark Analysis
Stakeholder Interviews
SWOT
Economic Focus Groups
Survey Summary
Identification of Assets
Business Climate
Identification of Issues
Infrastructure
Unique Project Aspects
Workforce & Education
Stakeholder
Communication and
Understanding
Quality of Life
Business & Resident
Online Surveys
Steering Committee
Presentation
Cluster Analysis
Vision
Industry Identification
Industry Requirements &
Scorecards
Preliminary Cluster
Analysis
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Objectives
Strategies & Actions
Niche, Emerging
Industries
Best Practices
Occupational Analysis
Metrics
Site Selectors Perception
Survey Analysis
Implementation Metrics
Cost of Operations
Model
Final Steering Committee
Presentation
Steering Committee
Presentation
Project Rollout
Background
THE BORDERPLEX ALLIANCE
The Borderplex Alliance (Alliance) is a bi-national economic
development organization committed to the economic development
of Doña Ana County, El Paso and Ciudad Juárez through greater
regional cooperation.
“If we want to be known as one
region, we need to start acting
like one region.”
The Alliance is a private, non-profit corporation focused on building
strategic partnerships across the region and around the globe to
unleash the region’s economic potential and boost its global
competitiveness.
--Borderplex Focus Group
Respondent
Formed through a merger between the El Paso Regional Economic
Development Corp and the Paso del Norte Group in 2012, the Alliance
maintains a strong working relationship with regional business and
governmental leaders, drawing upon their resources and expertise to
attract new business to the region. So far the Alliance has successfully
added jobs and foreign direct investment through the recruitment of
financial service firms, business operation centers and manufacturers
to the region. The Alliance is also working to formalize agreements
with other area economic development organizations that include
protocols for companies seeking relocation to the region.
EL PASO
With a diversified economy branching into new fields, El Paso is
primed to propel the regional economy forward. The Ft. Bliss military
base has been a defining pillar of the city, employing 41,000 people
and producing $6 billion in economic activity; numbers of armed
forces have more than doubled since 2007. Military cuts toward
making a “leaner, meaner” military could impact Fort Bliss, though to
what extent is unclear. Call centers are another large revenue
generator, accounting for four of the city’s 10 largest employers.
The Alliance also emphasizes the advocacy component of economic
development through more comprehensive and unified engagement
with the seats of government in Washington, Mexico City, Austin,
Santa Fe and Chihuahua City.
The University of Texas at El Paso is the largest public university in the
region and puts the city in a strong position to attract and retain a
highly specialized work force for the region in years to come. Key
areas of research include health and biomedical sciences and
engineering.
The Alliance will identify target industries for regional recruitment and
implement strategies that improve upon the region’s quality of life,
place, workforce and industry, while changing the perception of the
region as a low-skill, low-wage trap. Rather than take an El Pasocentric approach to development, the Alliancerecognizes that the
region is more attractive and powerful promoting itself with one voice
under one umbrella.
Upscale shopping for a city its size is in short supply, forcing higher
end shoppers out of town. Downtown revitalization, intended to
address the
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Background (continued)
dearth of entertainment options, has been slow to take hold. But a new
baseball stadium, a streetcar trolley and historic building renovations are
being positioned as catalysts for redevelopment.
The city has maintained a significant manufacturing sector, but since 2008,
the number of factories and the number of employees employed in those
factories has been declining. Once focused primarily on textiles,
manufacturing has diversified into automotive, biomedical, defense and
electronics, and the city is a leading point of shipping and distribution, with
direct transportation access to Los Angeles, Denver and the Midwest.
The medical sector is showing great promise, with the Medical Center of
the Americas, which has created the region’s first private biomedical
research facility and a commercialization institute, which the MCA plans to
bring online in 2017. The Burrell College of Osteopathic Medicine will bring
the region’s number of medical schools to three when it opens in 2016.
These medical institutions, spread across Juárez, El Paso and Las Cruces,
can leverage each other’s individual strengths and in the process advance
Given the diversity of its economy, El Paso is in a strong position to lead
economic cooperation regionally. But more public and private sector
leaders will need to relinquish the rivalrous, zero-sum approach to
business in favor of a more collaborative outlook that better serves their
long-term economic interests.
Border inefficiencies are hindering economic activity and regional
integration, though governments on both sides of the border are taking
steps to reverse this challenge, including adding more border personnel
and checkpoints.
JUÁREZ
Manufacturers began arriving in the border town in the 1960s, drawn by
the low-cost labor and proximity to the U.S.. Mexico
implemented a free trade agreement with foreign manufacturers that
allowed them to bring supplies into the country duty-free and tariff-free to
be manufactured and shipped back out to the parent companies.
Maquiladora or maquila factories began to spring up and dominate the
city, taking advantage of the special arrangement. Migrants workers
flocked to Juarez for the higher wages, compared to elsewhere in Mexico.
That worker-fed transformation has had an impact on the entire region.
Today, there are an estimated 250,000 manufacturing workers in the
North American Borderplex Region, 234,000 of them in Juarez. Of those
Juarez workers, 215,000 work in maquila factories.
But despite that outsized economic imprint, Juárez’ progress has been
uneven. Manufacturing in the city lacks diversity, and wages have not kept
pace with inflation, tempting residents into the drug trade, which claimed
10,000 lives between 2008 and 2011.
Removed from the centers of political influence in Mexico City and
Chihuahua City, Juárez has often missed out on crucial developmental
funds. Meanwhile, a recent sales tax increase from 11 to 16 percent, puts
the city on par with the rest of Mexico, threatens to inflict further
economic damage.
And yet Juárez’ success remains critical to the region’s as a whole, with
14,000 jobs in El Paso relating directly to the maquilas and millions of retail
dollars pouring north of the border annually. The Juárez/El Paso MSA is the
largest bilingual, bi-national community on the Mexico/Texas border.
Juárez’ murder rate is at its lowest level since 2007, signaling hope for the
future. People who fled the violence are returning. New buildings are
under construction. Bars and restaurants are reopening. A tourist shuttle
from El Paso started service in October 2014. And with Mexico already the
world’s top destination for aerospace manufacturing investments, Juárez
is positioned to capitalize on the burgeoning aerospace industry in New
Mexico and Texas.
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Background (continued)
Security and good governance will be critical to greater wealth production.
A lack of civic planning and corruption have led to economic inefficiencies
and inadequate infrastructure, while lingering fears of violence have all but
shuttered the tourism industry and alienated potential regional partners.
Equally important will be for the maquilas to progress into research and
design phases of production, as competition from other low-cost locations
grows and U.S. companies look to shift more sophisticated phases of
manufacturing closer to home. More cooperative partnerships between
the maquilas and higher learning institutes through organizations such as
CONREDES can help ready Juárez’ workforce for this transition.
collaboration, but that door will not be
open forever.”
— Stakeholder Interview Participant
DOÑA ANA COUNTY
Smaller than its partnering cities, Doña Ana County is no less critical to the
region’s success. Southern New Mexico is home to a number of
technology-driven entities with the potential for strong regional impact,
including White Sands Missile Range and Spaceport America, home to
Richard Branson’s Virgin Galactic and Elon Musk’s SpaceX.
New Mexico State University has the highest research and development
expenditures per capita among universities in the region and has signaled a
willingness to collaborate with other area universities in areas like
production and research and design. White Sands is expected to grow
through a greater emphasis on areas like simulated warfare product
testing and drone training. New Mexico is strong in life sciences, and
sensors is a viable specialty industry.
Virgin Galactic and SpaceX are set to introduce the world to space travel,
while Ted Turner’s plan to open a nearby luxury resort could help grow
tourism beyond the niche of space exploration. Well-rounded growth will
require advancement in more traditional sectors as well, such as
manufacturing. Manufacturing is down 15% since 2008, though 65% of all
new leads are in manufacturing, according to the Mesilla Valley Economic
Development Alliance. Doña Ana County is attractive to manufacturers
because of its available space and its proximity to Union Pacific Railroad’s
new bi-modal facility in nearby Santa Teresa. For Doña Ana County to keep
pace with this expansion, area businesses will need to work more closely
with technical schools and universities to align skills with the needs of the
marketplace.
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Executive Summary
Recovery from the global recession is evident throughout the
region. Business is back. In 2014, the Alliance helped a slew of new
companies relocate to the area. Datamark and Apogee opened new
call centers. Mesa Airlines announced the location of an overnight
maintenance facility and Prudential Financial announced a move to the
area. Schneider Electric expanded its energy generation operation.
Charles Schwab has also announced a customer service center in El
Paso. Even Whole Foods has recognized the opportunity available in
the bi-national regional market, and is planning a new store location
there in 2016. Since its merger and founding in 2012, it is estimated
that the Alliance has helped bring more than 3,100 new jobs to the
region – a positive indication that regional alliance with strong
strategic direction and leadership works effectively in attracting new
industries to the area.
The interest in the North American Borderplex Region by new
industries is hardly surprising. One of the largest international markets
in North America, with a population of more than 2.4 million, the
region has unique economic advantages, backed by the varied assets
of two countries and three states. The region has a lot to offer new
industries. It is:
Ideally situated at a key location on the largest international border in
the world
A top trade location for North America, with $48.1 billion of maquila
exports, surpassing giant Tijuana in foreign purchases from maquilas
The number one border area in terms of post-secondary education, with
five top universities
The only border area that can lay claim to three medical schools
Number one in border regions for university R&D expenditures
The highest college student population by workforce per capita of any
border region
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The second largest manufacturing employment center on the
Mexico/U.S. border
One of the largest bi-national, bilingual communities in the world
U.S. companies are breaking out of the recessionary slump with
plans. The escalation of nearshoring manufacturing processes will
continue as those U.S. companies react further to the rising labor
and cultural costs of doing business in Asia and the reduction of
transportation costs that come from proximity. Energy costs in
other countries relative to the U.S. and Mexico are rising
dramatically, and the new reforms in Mexico along with continued
fracking technology could act to lower costs further.
Mexico is now ranked as more competitive than China and Russia
for manufacturing operations by industry watchers, including BCG,
which found that Mexico has lower unit manufacturing costs than
China in 2014. Even traditionally cost-competitive countries such
as Indonesia are losing ground due to lack of logistics control.
Mexico’s aggressive new energy policies will open up
unconventional fields along the border to international drilling
companies with advanced fracking technology. Torchlight Energies
has acquired 172,000 acres in the Orogrande Basin and will soon
begin exploratory drilling that could triple wellheads in the area. If
these new fields prove viable and cost productive, energy could
become a major economic driver. The length of impact will depend
on many factors , including the price of oil, the cost of local
production and the play of the field.
In this environment of new opportunity, the Alliance is striving for
the stronger unification of the El Paso, Juárez and Las Cruces area
as one dominant force in international markets.
Executive Summary
BORDERPLEX STRATEGIC VISION
workforce basin spans large areas in two countries, adding a
seemingly unending supply of highly trainable blue collar
workers with good work ethic, strong productivity and a talent
for innovation.
To unite the El Paso, Juárez, Las Cruces and Southern
New Mexico areas as one powerfully integrated
economic region; working with local economic
development organizations to competitively promote
the combined assets of the region on a global level.
Banded together, the three states and three cities have much
greater standing when approaching state and federal
governments to lobby for much needed funding for
infrastructure.
The unification of the region into one cohesive region is a critical
step on the road to success for the communities in the Paso del
Norte area. It allows cities more control of economic development
and the ammunition needed to become much better-equipped
players in the global arena. Everyone wins through regionalization.
That is why, worldwide, communities are banding together to
multiply their impact and stand out above the crowd.
Too many silos exist in the region today. Too many stories are being
told about the cities and the assets to be found in the region. It
confuses the market and diminishes the power that could be
wielded by the region as a whole. The North American Borderplex
Region has one great story to tell. Each city adds a rich chapter.
The area forms an exemplary regional market, with diverse
industries and dynamic universities that introduce a constant
pipeline of skilled workers looking for jobs in the area. The
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The region encompasses three unique cities, each with its own
culture, residential environment and business climate. Each city
has important assets to bring to the table. Juárez has the blue
collar workforce, the population and the maquilas. El Paso brings
logistics and distribution, UTEP, retail and Fort Bliss. Las Cruces
adds geographic advantage, available land, NMSU and the White
Sands Missile Range.
Combined, the cities give the area the strength and flexibility to
attract the kinds of new industries needed and to grow its
economy strategically. Leveraged together, their assets have the
scope to attract a range of integrated industries no one city
could attract on its own. The diversity provided by regional
alliance allows El Paso, Juárez and Las Cruces to each achieve
more stability and better weather adversity. In the new age of
globalized industry competition, no one should be left to battle
alone.
Executive Summary
The region is blessed not only with a large number of assets with
which to stand out above the competition, but also in the strength of
those assets. Key regional assets include:
•Geographic and International Border Location
•Abundant, Low-Cost Workforce
•World Class Manufacturing Infrastructure
•Low Cost of Doing Business
•Low Cost of Living
•Strong Universities and Medical Schools
•Strong Life Sciences Factors
•Military Presence
•Bi-national, Bilingual Culture
•Tourism Elements
Corruption in Mexico has been imbedded in the government and
business culture of the area for generations. The result has been
a confusion as to the cost of doing business, illogical housing
developments and the unusual placement of assets in the region.
Easing the level of corruption would benefit economic
productivity.
The maquilas in Juárez have powered the regional economy and
put the region on the international map. The growth of the
manufacturing industry and the lack of growth in others has
created a lack of diversity of industries in the city.
The distance of all three regional anchor cities from their national
and state realms of influence has resulted in a lack of adequate
infrastructure funding. That lack of funding has created a
significant problem with delay issues at border crossings.
Important considerations in a strong economic development strategic
plan are issues within the region that could deter optimal growth. All
communities have challenges to address. The key is the identification
of important issues and the action to address them.
While the region has an extremely strong workforce base relocating
from areas in and outside the cities, industry leaders complained of a
lack of soft skills and higher-level technical training.
The escalation of violence in Juárez from 2008 through 2012 had a
palpable impact on businesses, workforce and many industries,
especially tourism. While the violence has dropped dramatically from
the peak, a higher than normal level still exists, and the perception of
violence still mars the area.
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The understanding of opportunities that the region may be able
to capitalize upon in the years ahead is an important component
in developing the strongest strategic plan. So is the assessment of
risks the region faces. The following SWOT chart provides an
assessment of a fuller range of strengths, weaknesses,
opportunities and threats inherent to the current regional
market.
Companies need to develop upward
mobility paths and educate workers on
how to move ahead.
-- Stakeholder Focus Group Participant
Borderplex SWOT
Strengths
Weaknesses
Geographic/International Location
Driver of Major Logistics/Distribution Route
Low Freight Costs
Low Labor Costs
Low Cost of Living
Large, Young Labor Source
Sunlight Factor
Reputation for Product Quality
Major Military Bases
Strong Universities
Strong Hospitals/Medical Schools/Healthcare
Emerging Life Sciences
High Number of Graduating Engineers
Varied Tax /Incentive Options
Bilingual/Bi-cultural
Lack of Appropriate Workforce Skills/Inadequate Career Paths
Lack of Adequate Industry Diversification
Underdeveloped Supply Chain
Inadequate Freight Rail Infrastructure
Inadequate Port Entry Infrastructure
Perception of Violence
Distance from Realms of Influence/Lack of Regional Lobbying
Weak Public Education/Low Graduation Rates
Areas of High Poverty
Disassociated Governments
Lack of Direct Communication with Businesses
Lack of Trust Between Key Stakeholders
Inadequate Venture Capital/Angel Funding
Lack of Regional Incentive Planning
Opportunities
Threats
Regional Coordination of Local EDOs
Defense Cutbacks
Additional Leverage of International Airports, Especially Freight
Future Military Base Downsizing
Coordinated Historical/Cultural/Space Port Tourism
Corruption
Medical/Biomed/Medical Tourism
Violence/Drug Trade/Gang Activity
Integrated Aerospace Manufacturing, Testing
Water Supply
Santa Teresa/Airports/Union Pacific
Lack of Regional Team Play by Politicians
Advanced/Value Added Manufacturing
Increased Retention of Retiring Military Personnel, University Graduates
Increased Cooperation between Universities
New Oil and Gas Production from the Western Permian Basin
Reshoring Trend
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Executive Summary
To better understand the dynamics that drive the regional
economy, AngelouEconomics studied the market through an
examination of four important factors:
•Quality of Life
•Workforce and Education
•Business Climate
•Infrastructure
advancement into higher-skilled job categories. That lack of
career paths tied into the blue collar workforce translates into
very little possibility of upward mobility for many low-wage
workers. Poverty has a significant impact on life in the region.
collaboration, but that door will
not be open forever.”
QUALITY OF LIFE
A rich culture is woven through the North American Borderplex
Region, and the ability to experience a different country and a
different perspective to life requires only a walk or drive across the
border. Not only does that provide incoming businesses and
employees a more interesting daily life, but the protected
hereditary genetics also helped attract a Texas Tech medical school
to El Paso and provide significant opportunity for clinical testing,
adaptive medical research and responsive bi-cultural product and
media testing.
Fairly unique to the quality of life in the area is the dual structure of
the population. Two distinct worlds appear to exist in the region,
especially in Juárez. One world is inhabited by white collar and
management employees, along with some highly-skilled blue collar
workers that exist in accordance with a higher pay scale, live in a
different standard of housing and have a different general quality of
life than low-skill workers and the long-term unemployed.
There are 215,000 maquila workers in Juárez. Wages for those
workers are low, and there is very little opportunity for
14
Juárez is the population driver for the region, giving the large
population of low-skilled workers that live there more of an
impact on the regional economy than more affluent population
segments in other areas. Without strategic intervention through
strong economic development, the regional population will
likely experience slow to moderate growth through 2030.
-- Stakeholder Interview Respondent
The lower cost of living in the region offsets the lower income
levels for white collar workers, allowing companies to benefit
from the lower wage expense without significantly reducing the
quality of life for employees that would impede employee
attraction. The same relative number of residents pay 25
percent or more of their income for housing in the region
(64.4%) as in the U.S. on average (63%).The balancing of lower
cost of living with lower wages is less true for unskilled workers.
Low crime rates in El Paso and Las Cruces are a positive factor in
attracting both businesses and people interested in living in the
area.
High violent crime in Juárez, though significantly decreasing
since its peak in 2010, is still at a level that could deter many
businesses and white collar workers. Perception of crime can
linger a long time after the issue begins to normalize, making a
directed approach to marketing the decreasing crime rate in
Juárez a priority.
Executive Summary
WORKFORCE AND EDUCATION
BUSINESS CLIMATE
The development of the huge manufacturing industry in the region
sprung from the area’s large, low-cost work force from Mexico. The
supply of those workers continues unhindered today, but the skill
level of those workers is basic.
Employers throughout the region report a lack of adequate soft skills
and a shortage of highly trained technical workers. Maquila owners
and plant managers report that the factories must take on the
responsibility of adequately training workers, even local engineering
graduates. A lack of appropriate jobs and low wage levels force
graduates from NMSU and UTEP to relocate out of the area upon
graduation.
Most jobs in El Paso are in the retail sector, while in Las Cruces/Doña
Ana County healthcare and social assistance accounted for the
largest share of jobs followed by retail. In Juárez the bulk of jobs are
found in manufacturing related to maquilas.
Two large U.S. universities, New Mexico State University and the
University of Texas at El Paso, account for $220 million in R & D
expenditures, and issue roughly 13,000 undergraduate and graduate
degrees a year, most of them in the humanities, business and
engineering. The Autonomous University of Juarez has 24,000
students within engineering and technology programs, accounting
for upward of 5,000 graduates, biosciences more than 6,000 and
social sciences around 8,000. R&D funding at Autonomous is
estimated at $12,000.
Much of the R & D is concentrated on engineering-related fields like
aerospace, biomedicine, and electronics. Juárez is also home to
several sizeable universities with significant programs and graduates.
The region has two medical schools now operating and a third
expected to open in 2016. Low venture capital levels are reported
by local entrepreneurs.
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Business climate in the region is generally supportive. A byproduct of three different state governments, it will be a
challenge to coordinate similar policies for prospective
businesses. Permitting processes and incentive policies should
be reviewed for more regional collaboration opportunities.
Varying tax structures allow companies the option to locate
within city that offers the best option for that company.
notleaders
be open
Juarez business
reportedforever.”
that corruption helps shape the
business environment. Region-wide, licensing and permitting is
affected by the level of personal connections a company has
-- Stakeholder
Interview
developed and nepotism
has an impact
on how Respondent
things run
throughout the region.
The large number of medical schools in the area have a positive
impact on the business environment, as does the region’s strong
military presence.
Corporate tax rates in Texas and New Mexico are moderately
attractive, as are sales taxes in the two U.S. states. New Mexico
offers a very low property tax rate. While Texas has a high
property tax rate, it has no state income tax, and ranks high in
terms of business friendliness. Both states offer considerable
incentives to attract new businesses. Combined with the options
in Juarez, the cities offer many options for tailoring location
benefits.
Reliable, comprehensive business and economic data in Juárez is
hard to collect, and when available is not comparable to data on
the U.S. side of the border.
More lobbying efforts are needed to overcome the lack of
government attention.
Executive Summary
INFRASTRUCTURE
The high level of manufacturing, international trade and logistics and
distribution activity in the region makes infrastructure a critical
element of a healthy economy. The region has a superior geographic
location for North American trade. An interconnected series of
highways in good condition tie the area to the eastern two-thirds of
the U.S. and Canada and to Phoenix and Tucson. Highways also
connect the region with a good portion of North Central Mexico. All
three cities have active commercial corridors.
Although the region boasts international airports in both El Paso and
Juárez, air service appears lacking to adequately support direct
business travel and to move significant amounts of freight. The
Alliance is currently active in a campaign to increase direct flights to
and from El Paso, which would result in a considerable attraction
factor for companies that conduct national and international
businesses.
The area has five inland port or border crossing stations. Infrastructure and personnel at stations are insufficient to handle either
the amount of trucks that must flow through the area to transport
goods north from maquilas in Juárez or supplies south from the U.S.
Long delays cost businesses dependent on the interstate movement
of cargo in terms of employee time and lost contracts. More open
lanes and larger numbers of agents staffing the port infrastructures
are badly needed.
Rail infrastructure in the region is not established logistically to offer
much assistance with the transportation of manufactured goods,
adding to the stress on vehicle port stations and on the highways that
feed them. Union Pacific’s new Santa Teresa station was built by the
company as a fueling station and to improve the logistics of
16
transporting their existing supply. UP does not see the viability of
increasing north-south rail transportation in the region, but
instead supports the expansion of bi-modal truck-to-rail methods.
Industrial space costs less in the region than in other Mexico/U.S.
border cities. The market in Juárez took a heavy hit during the
recession, and recovery signs only began to appear in 2012 and
2013. Both El Paso and Juárez currently have significant vacant
industrial space, keeping the cost of space low and attractive to
prospective businesses. Construction is underway in the north,
west, central and southeast areas of the city.
not be open forever.”
Housing in the area is an attraction point for the North American
Borderplex Region. It is primarily newer single-family, detached
infrastructure with affordable pricing.
El Paso outperformed the U.S. in housing statistics during the
recession, aided in part by increasing troop numbers at Fort Bliss
and subsequent low vacancy rates. Las Cruces was harder hit by
tough times, with a 32 percent increase in vacant housing
infrastructure.
Juárez suffered not only from the recession in both Mexico and
the U.S., but also from the affects of an extreme surge in violent
crime that suppressed investment in the area and drove some
manufacturing to other locations. Many workers lost their jobs in
the 2007-2012 time period. The double hit of unemployment and
fear of violent crime caused many residents to flee the area,
building a large surplus in unoccupied housing.
Overall, the availability of vacant housing in the region has helped
suppress housing values, making the purchase of a home less
expensive for workers moving into the area.
Executive Summary
STAKEHOLDER SURVEY
An online survey ran in both English and Spanish versions during
the month of October 2014, offering regional businesses and
residents an opportunity to weigh in about economic development
in the area. In total, 865 people responded to the survey: 562
residents and 303 businesses.
Residents clearly indicated a need for more and higher-level jobs in
the area and a desire for more public and private investment in
high tech infrastructure. Public education was ranked as a very
important factor, but the quality of that public education in the
region was perceived as lacking.
Residents asked for more affordable housing, better skills training
for students and more support for entrepreneurship. Most
reported they felt there had been significant improvements in
safety in the region during the last five years.
Business respondents said that the region was a good place for
business. They indicated a need for improvements to the number,
quality, efficiency and personnel investment of port crossings as
the number one area need. The most important factors to local
businesses were reported to be access to customers and the
attraction and retention of a skilled workforce.
Juárez businesses cited security concerns as a roadblock to
expansion. Businesses also reported issues with unreliable labor,
accessibility of capital and insufficient infrastructure.
17
Business respondents expressed a need to grow existing
manufacturing sectors and to diversify into new types of
product areas. A need to develop and integrate the local supply
chain was also reported.
collaboration,
that
door
willof
AngelouEconomics
will now turn but
attention
to the
next part
the economic
project - the analysis of
notdevelopment
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NEXT STEPS
target industries and a business case analysis.
Stakeholder
Interview
Respondent
To determine which--industries
offer the
most opportunity
and
the highest potential for attraction to the North American
Borderplex Region, AE will conduct cluster analysis and
occupational analysis to determine needed work skills. As a
part of that analysis, growth potential and national and global
trends will be taken into consideration.
AE will also provide a cost of operations model that a potential
business would face when considering location to the area. Top
site selectors will also be surveyed to determine their current
perceptions of the region as a potential site for their clients.
The final phase of the economic development project will be
the development of an action plan that can lead the way to the
realization of the strategic goals for the region.
Borderplex Assets
Today, the North American Borderplex Region stands in a strong position, ready to compete with a great deal of advantage in the global
market. To do that, the region will benefit from strategic economic alliances and the full leverage of all the assets at its disposal.
Fortunately, the community has an enviable arsenal of advantages to draw upon. Those assets will actively support development initiatives
that will help local businesses grow and allow the region to stand heads above the crowd in attracting new industries.
INTERNATIONAL BORDER LOCATION
The Mexico/U.S. border is one of the busiest international borders in the world, and the El Paso/Juárez area is the second busiest land port
along that border, surpassed only by San Diego/Tijuana’s San Ysidro entry port. The area has strong, well-connected highway
transportation infrastructure. Last year, more than $46 billion moved from Mexico through the El Paso/Juárez border. That powerful
advantage gives the region opportunity to become one of the best practice regions for international logistics and distribution and opens
the door for even greater numbers and more diverse types of manufacturing as well as innovative new industries.
Mexican-Side US-Side
Student
Student
University
Population as Population as
Total Exports Total Exports
Total Labor Force
R&D
a Share of
a Share of
(U.S.)*
(Mexico)**
Expenditures
Total
Total
Workforce Population
Region
Population
Borderplex
2.4 Million
950 Thousand
8.6%
13.5%
$233 Million $14.8 Billion $46.4 Billion
San Diego/Tijuana
4.7 Million
2.2 Million
8.2%
11.8%
$1.2 Billion $17.9 Billion $30.7 Billion
Laredo/Nueva Laredo
650 Thousand
250 Thousand
7.6%
10.2%
$3.3 Million $5.5 Billion $91.6 Billion
McAllen/Reynosa
1.4 Million
560 Thousand
6.6%
8.5%
Brownsville/Matamoros
900 Thousand
350 Thousand
8.0%
7.3%
$9 Million
$5.2 Billion $16.6 Billion
$8.3 Million $4.6 Billion
*Data reflects exports from U.S. through the regional ports. **Data reflects exports from Mexico through the regional ports.
18
$5.9 Billion
Borderplex Assets
ABUNDANT, LOW-COST WORKFORCE
The North American Borderplex Region has another major asset to
offer industries - one of North America’s largest workforce basins, with
850,000 people currently employed and a steady supply of workers
ready to fill new positions. The regional workforce is diversely skilled,
inexpensive and multilingual. Local universities graduate large
numbers of engineers and technically-oriented potential workers each
year, and three major military bases add highly-skilled retiring troops
and military spouses to the range of skills available.
Manufacturing Employment as a Share of Total
Population
14%
12%
10%
8%
6%
4%
2%
0%
13.1%
10.4%
8.1%
5.4% 5.1%
4.3% 4.0% 4.0% 3.8% 3.8%
A sizeable portion of the workforce is employed in retail,
manufacturing, hospitality and customer relations. The region is the
largest manufacturing center per capita in North America, with
250,000 production employees. Maquilas in Juárez specialize in
Source: Bureau of Labor Statistics
assembling a range of electronics, automotive parts, plastics, and
metals. Highly trained-technical workers in the region include experts
EXISTING MANUFACTURING HUB
in specialized areas, including defense, and healthcare.
The region is the second largest per capita manufacturing area in the
U.S among the top manufacturing cities identified by Forbes
Total Foreign Payments for Maquiladora Goods and
magazine. There are 310 Maquila factories now operating in Juárez
Services (2008-2013)
that contribute to the $46.4 billion a year in exports from Juárez into
Juárez
Tijuana
the U.S. The manufacturing industry in the region is rebounding
Querétaro
Nuevo Laredo
$6,000,000,000
Reynosa
Matamoros
from the effects of the recession with predictions for strong growth
in the coming years. Juárez began out-producing giant Tijuana in
$5,000,000,000
2012.
$4,000,000,000
A low-cost workforce helped send the region to the top of the charts
for manufacturing industries, but today many maquila owners are
expanding into more advanced manufacturing processes,
implementing more innovative equipment and vertically integrating
into more complete product manufacturing. That shift will help to
diversify the workforce and develop higher regional skill levels.
$3,000,000,000
$2,000,000,000
$1,000,000,000
$0
2008
2009
2010
2011
2012
2013
Source: Instituto Nacional de Estadística y Geografía
19
Borderplex Assets
UNIVERSITIES
At 13.5%, the region has an impressively high percentage of
university students to its adult population on the U.S. side of the
border. That provides a significant draw to industries positioning
themselves into an educated population and workforce.
The region’s three main universities, the University of Texas at El
Paso, New Mexico State University in Las Cruces, and the
Autonomous University of Juárez together employ more than 8,000
people. Their location has been crucial to regional economic
development. UTEP and NMSU’s research and development
expenditures amount to more than $221 million and cover a widerange of fields, including life sciences and engineering, computer
science and physical science. Other research focuses include
agricultural science and aerospace.
LIFE SCIENCES
Academic R&D Expenditures in El Paso/Las Cruces
by Discipline (2013)
$24,528,000
Engineering
$3,861,000
Computer Science
Environmental Science
Life Science
$95,458,000
$54,461,000
Mathematical Science
Physical Science
$5,925,000
$9,905,000
Source: National Science Foundation
There are two publicly funded medical schools now operating in the
region, and a third private medical school is set to open soon. The health, neuroscience, infectious diseases, cancer, Hispanic health
medical schools are a draw to many life sciences industries, related and cell physiology. Both have a reputation for the installation and
companies, technology developers and manufacturers, prescription use of innovative medical machine technology.
drug companies and suppliers.
The Burrell College of Osteopathic Medicine in Las Cruces is set to
The Texas Tech Paul L. Foster School of Medicine in El Paso and the open in 2016, with an eventual planned enrollment of 1,200
Universidad Autonoma de Cuidad Juárez Institute of Biomedical students. The combination of three highly regarded medical
Sciences. Both have highly-respected department heads and staff. schools is an important advantage that will attract the attention of
They focus research and funding in biomedical, genetics, diabetes, industries from research companies, to engineering firms to
medical equipment manufacturers.
environmental
20
Borderplex Assets
CULTURAL DIVERSITY
The area has been building a healthy bilingual, bi-national community
for more than 400 years. The result is one of the largest bi-cultural
drawing points in North America. The pull was strong enough to lure
the Texas Tech Paul L. Foster School of Medicine into El Paso, based
in large part on the opportunity to study genetic impact on diseases
in an area where families have remained together for generations
and where large household populations still exist. The medical school
also has research focused on Hispanic health.
Other industries and organizations that benefit from bilingual
population or from the preserved bi-national culture will highly value
the cultural strength of the area. The region would be ideal for
private academies offering immersion classes in both English and
Spanish.
LOW COST OF DOING BUSINESS/COST OF LIVING EXPENSES
The cost of doing business in the area is low, with lower wages, a
variety of tax environments and a low cost of procuring labor. At the
same time, the community offers a high standard of living, as money
goes further in the area, with lower housing costs, rent, and a price
parity index that affords residents nearly 10 percent more buying
power.
The combination of low cost of business and living expenses is a
heady mix to offer a wide range of prospective businesses looking for
higher profit margins and the ability to attract a large workforce.
21
Old Stage on the Butterfield Trail
“There is a rich history between El
Paso and Juárez - a lot that people
have forgotten. The whole region
should be a living museum of culture.”
Borderplex Assets
MILITARY
Combined regional military bases employ thousands, contribute
billions of dollars to the regional economy, and boost demand for
contractors and specialized talent in the region. The area is home to
three major military bases - Fort Bliss, Holloman Air Force Base and
White Sands Missile Range. Together the bases cover more than 3
million acres of land, and have been critical in cushioning the region
from the effects of the global economic downturn. They compliment
the region’s growing focus on science- and technology- driven
industries. They are a major attraction factor for industries with ties
to aerospace, aviation and defense contracting and provide leverage
for the manufacture of related materials.
Significant downsizing of some bases is expected in the future.
Holloman trains pilots, and tests and maintains manned and
unmanned aircraft. It supports about 21,000 military personnel,
retirees and their families and estimates its regional economic impact
to be nearly $700 million.
The location of nearby space ports and plans for the well-financed
development of adjoining property into resort facilities offer a
possibility to leverage tourism with the aerospace and related
aspects of military bases, manufacturing and testing facilities.
White Sands is among the largest military installations in the U.S. and
tests weapons in the U.S. military’s arsenal. It conducts research,
development and training for the military, as well as select private
and public entities, including NASA. The base is also an alternate
orbiter landing site and a training site for astronauts preparing for
shuttle missions.
Fort Bliss Army base specializes in brigade modernization and missile
defense, among other areas, and is fitted to conduct live exercises
with most U.S. army weaponry. Construction on the base has grown
rapidly in recent years, as it begins to house more soldiers and
conduct more heavy armor training and maneuver exercises. Total
personnel civilians employed by the base is approximately 37,000
and its economic impact is $5 billion, according to a 2013 UTEP
study.
22
TOURISM
The region has vast potential for the development of tourism
industries. The rich past of the combined area draws together the
opportunity to develop a triad of related cultural sites drawing on
the history of the Old West in El Paso, Old Mexico and Mexican
culture in Juárez, and Native American history and culture in Las
Cruces. Developing cooperative tourism locations and industries
that tie together planned activities could provide an interesting
draw for domestic as well as international tourists.
Challenges
WORKFORCE SKILLS
A common complaint found among employers in all cities was a
shortage of “soft skills,” which cover communication, social graces
and overall professionalism. Much of the white collar workforce
comes to the market with strong creative and theory skills, but lacks
needed practical experience.
The regional workforce notes a shortage of career opportunities,
particularly for low-skill maquila workers. That in turn is stunting skills
development in the existing workforce. Low wages are also reducing
workforce commitment to develop higher skills outside the
workplace.
Universities are now beginning to focus on soft skills as a workforce
issue. Many have begun to offer courses in English as a second
language and have added certification courses to boost the skill levels
and diversity of the blue collar workforce. Community colleges in the
area appear to have a focus on advancing students into four-year
universities. It could be necessary to develop more community
college focus on the development of mid-level skill sets and
certifications.
BORDER INFRASTRUCTURE
Roughly 18 percent of U.S.-Mexico trade crosses El Paso and
Juárez. Border waits and operating hours have affected businesses’
bottom lines, notably in the maquila industry. Some maquila
management noted that
Customs-Trade Partnership Against
Terrorism (C-TPAT) status, which fast tracks an operation’s
shipments, can save a major company an estimated $1 million USD
annually.
23
But most maquilas ship cargo without C-TPAT status, resulting in
costs rather than savings. Growth in border crossings has
outstripped infrastructural improvements. Improvements to one
side are less impactful without improvements to the other; five
lanes on the U.S. side of the Zaragoza bridge, for instance, are
met by two on the Mexican. The completion of the TornilloGuadalupe Bridge, the crossing at Santa-Teresa-San Jeronimo,
and the all-lanes initiative are expected to alleviate traffic to an
extent.
Meanwhile, U.S. Customs and Border Patrol is exploring
technologies that would reduce wait times. Juárez and El Paso
authorities are considering an all-electric, 15-mile elevated
monorail to ship cargo between the two sides. Obtaining the
appropriate funding for these measures will be challenging, as
members of Congress don’t represent border districts and fail to
make the connection between border efficiencies and the
national economies.
INDUSTRY DIVERSIFICATION
The region is heavily dependent on manufacturing, within which
much of the activity centers on electronics and automotive parts.
Greater diversification will advance skills development and grow
employment opportunities. It will attract more dynamic forms of
investment, create new linkages between regional entities, grow
profit margins and cushion the region during economic
downturns.
Challenges
UNDERDEVELOPED SUPPLY CHAIN
Most inputs into the maquila sector’s supply chain come from
abroad. The remaining mostly tier-2, -3, and -4 manufacturing
processes pressure wages downward and stunt skills
development. Local employers often cite skills shortages
among their reasons for not growing their supply chains.
Mexico in fact produces 100,000 engineering graduates a year
(more than Germany and Canada combined, according to MFI
International), while several maquila managers in Juárez we
spoke with ranked available talent in Juárez very high in terms
of competency. Localizing supply chains can improve speed to
market, intellectual property protection, freight and input costs
and quality control. It will also deepen the maquila industry’s
ties to the local economy, facilitating the goal of greater
DISTANCE FROM CENTERS OF INFLUENCE
Juárez and El Paso are on the farthest edges of their states’
respective centers of influence and farther still from their
countries’ federal seats of power. This has made it difficult to
get an ear on issues of local importance. The fact is many of the
region’s most pressing issues, from border infrastructure to
industry diversification, impact Mexico and the U.S. as a whole.
Local government and business leaders will need to
communicate this connection at the national level, and lobby
their cause relentlessly, highlighting similar successes from
around the world wherever possible.
24
VIOLENCE
The media have noted with some regularity that the
violence in Juárez has not slowed down the maquila
industry; to be sure, foreign direct investment per capita in
Juárez remains among the highest in Mexico. This storyline,
however, does not account for the surge in investment the
region may have received if Juárez had not become one of
the world’s deadliest cities. During the peak years of
violence between 2008 and 2010, global players including
automakers and toy manufacturers settled in other parts of
Mexico. Tourism across the region took a hit, as many
tourists used to land in El Paso and Las Cruces with an eye
toward stepping across the border. Homicides may be down
substantially – from a peak of 3,700 homicides in 2010 to
497 last year – but further improvements to Juárez’
reputation are essential to realizing regional goals, from
growing medical tourism to moving up the value-added
chain.
“If you want something done in
Mexico, you have to have feet planted
in Mexico City.”
--Focus Group Respondent
Factor Analysis
Quality of Life
Business Climate
Infrastructure
BUSINESS CLIMATE - The general environment for and factors affecting business establishment and growth including key economic drivers,
permitting, business costs, tax climate, availability of capital, access to markets, and incentives.
WORKFORCE AND EDUCATION - The available workers and their skill levels and experience. Important factors include colleges and
universities, workforce training programs and young professionals.
SITES AND INFRASTRUCTURE - The resources necessary to the functioning of a community and economy including available land, real
estate product balance and availability, utility infrastructure, transportation and telecommunication .
QUALITY OF LIFE - The factors affecting the daily experience of community members, including cost of living, housing, healthcare, crime
rates, recreation and entertainment, and others.
25
QUALITY OF LIFE
QUALITY
OF LIFE
Las Cruces Cultural Heritage Festival
Photo by Ben Vilmer
El Paso Fun Run
Quality of Life
Quality of life is an important factor in economic development,
competitiveness and prosperity. Studies suggest that strong quality of
life fosters creativity, innovation, entrepreneurism and business
growth. Businesses around the world are paying more attention to
quality of life factors when deciding where to locate and expand.
Environmental quality, culturally desirable working and living
conditions, safety, quality healthcare, convenient amenities, good
schools and a sense of place set the stage for a high quality of life.
There are standard indicators by which to evaluate quality of life in
an area, including cost of living, household Income, rent levels, and
commute times. But there are many other factors that can come into
play when determining how easy and satisfying it can be to live
in a community.
The region is somewhat unusual in that it supports two distinctly
separate standards of living within its one community. This is
particularly true in Juárez, where white collar workers and their
families live in accordance with one wage scale, while unskilled
workers live under a separate and much lower range of wages.
Overall, quality of life is good in the region. Income levels are lower
than average, but a pay check goes further due to lower costs of
living. Commute time is reasonable, as long as a border crossing is
not required. While large areas of poverty exist, vast numbers of
people have migrated to the area in search of jobs and a better
quality of life.
The colorful and cooperative bi-national, bi-cultural, bilingual
personality of the area is one of the region’s strongest assets. It helps
bind the region together with a unique and valuable character. The
27
variety of cultures in the area – Western American, Hispanic and
Native American – and a long and colorful history, provide
potential for much greater leveraging of tourist activities. The
large bilingual population also affords advantages for attracting
additional international companies. The multi-cultural region
could be a rich location for major Spanish-as-a-second-language
and
English-as-a-second-language
immersion
learning
institutions.
Juárez is the population and workforce driver of Chihuahua State
and of the region, with a city population estimated at more than
1.4 million. Of the 950,000 workers in the North American
Borderplex Region, it is estimated that more than half (500,000)
live in Juárez.
The population of Juárez is estimated to have jumped a
remarkable 75 percent between 1990 and 2013. Less than half
the size of Juárez, El Paso (614,433) grew roughly 30 percent
between 1990-2013, comparable to the average U.S. growth rate
of 27 percent. The smaller city of Las Cruces (101,324), grew at
double the U.S. average at a rate of 60 percent during the 13year time period.
The region felt the bite of the recession. Growth in El Paso slowed
to 12 percent between 2008 and 2013, and growth in Las Cruces
slowed further to six percent. Juárez suffered a double hit from
the recession and a violent crime wave. Estimates vary for the
impact on the city in terms of population , but it is likely the city
lost a slight percentage of population during the time period.
Quality of Life
Without major changes in economic policy, experts predict growth will
be slow to moderate in the region through 2030.
Median Household Income (2013)
For many years, the region, Juárez in particular, has been known for its
seemingly endless supply of low-wage workers. This has been a boon
to the manufacturing and low-skill industries for the last 50 years. That
low-wage factor will continue to attract companies looking to nearshore manufacturing processes. But the flip side of a low-wage
workforce is a population with low incomes, a factor that affects
quality of life. Borderplex cities and businesses will need to strike
balance between the attraction of industries through low wages and
salary levels necessary to maintain quality of life.
$60,000
Both personal income and household income are much lower in
El Paso and Las Cruces than in the benchmark city of San Antonio and
much lower than the U.S. average. Nearly half the households in Las
Cruces and 45 percent of El Paso households earn less than $35,000 a
year. Real per capita personal income in El Paso is only 71 percent of
the U.S. average and only 72 percent in Las Cruces.
$10,000
For practical purposes, there appear to be two distinct wage structures
governing Juárez, one for unskilled labor and one for higher level
employees and executives. The differences between wages earned by
the two segments vary dramatically, making averages and medians less
meaningful. The average salaries for white collar jobs in the city are
estimated to range from $25,000 USD for an engineer to $132,000 USD
for a plant manager. Wages for unskilled workers are estimated to
range between $2,600 to $5,000 USD per year.
While income levels are lower than average in the area, a paycheck
stretches further due to lower rent prices and other costs of living. In
general, prices are nine percent lower in El Paso and seven percent
lower in Las Cruces than in other U.S. cities. Prices in Juárez for most
commodities are lower than in sister city El Paso, and lower than in the
benchmark city of Querètaro.
28
$51,716
$52,250
San Antonio
MSA
US
$50,000
$40,000
$39,195
$35,098
$30,000
$20,000
$0
El Paso / Las
Cruces
McAllen
MSA
Sources: U.S. Census Bureau
The prices residents pay for housing each month in El Paso and
Las Cruces are in line with lower salaries. El Paso and Las Cruces
residents pay 20 percent less than the U.S. median rent. In
general, regional residents pay the same percentage of their
monthly income on housing as most other U.S. residents.
Housing values are lower along the border than in other parts of
the U.S. Housing prices in Juárez vary greatly. NUMBEO reported
that an average 1,500 square-foot home in the center of the city
would cost $372,000 USD, and the same size house outside the
central area would cost $257,000 USD. These values appear high,
and likely do not represent the cost of all segments of housing in
the city.
Quality of Life
city. Molloy attributes the escalation of homicides to drug cartel
wars and gang extortion.
Cooperation by citizen groups and the government has helped to
bring the murder rate down. Violent crime does not appear to
have spilled across the border. El Paso violent crime rates are
similar to other areas of the U.S., and Las Cruces has less violent
crime than average.
Tourism is already beginning to return to the area. Buses
transporting passengers from downtown El Paso to downtown
Juárez and back each day launched services in the summer of
2014.
Borderplex bikers
As long as commuters do not cross the border into Mexico each day,
they spend less time getting to their jobs than most people in the U.S.
Overwhelmingly, El Paso and Las Cruces commuters drove alone to
and from their jobs. Virtually none of them used public transportation.
In contrast, nearly 40 percent of Juárez residents take public or private
buses to work. With income levels drastically lower in the city, fewer
people own vehicles.
The wave of homicides in Juárez that escalated in 2008 and began to
diminish in 2012 has had a severe impact on the region. Violent crime,
and the lingering perception of high violent crime, has deterred
tourism, consumer activity and business location in the area. A New
Mexico State University study by Molly Molloy shows the peak of the
crime wave hit in 2010 with 3,622 homicides in the city. Molloy
Poverty has a significant impact on quality of life within the region.
Children who grow up in families in poverty are at greater risk of
low educational achievement, lower income earnings, heavier
reliance on government social programs and higher likelihood of
criminal activity and incarceration.
A Colegio de la Frontera study last year found that nearly half a
million Juárez residents live in poverty or extreme poverty, and 37
percent of the population is unable to provide for basic needs.
During interviews with stakeholders, business owners repeatedly
listed poverty as a leading contributor to inadequate regional
workforce skills.
Strategic economic development planning, diversification of
industries
and de
theCiudad
introduction of new types of jobs into the
Catedral
Juárez
Chihuahua
region will do much to combat poverty in the long term.
Cathedral de Cuidad Juárez
29
Quality of Life: Population
Regional Population Estimates (2013)
3,000,000
2,500,000
2,445,474
2,000,000
2,277,516
Juárez is the population center of the region with
more than 1.4 million residents. The combined
region outnumbers even the San Antonio MSA in
sheer population.
1,475,165
1,500,000
841,282
1,000,000
500,000
Barring a change in economic development
planning, growth for the area is expected to be
slow through 2020 and moderate into 2030.
0
Borderplex
McAllen
Region
Querétaro
San Antonio
MSA
Sources: U.S. Census Bureau; Secretaria de
Gobernacion – Consejo Nacional de Poblacion
Population Projections (2020-2030)
3,000,000
2,500,000
2,565,790
2,332,250
2,000,000
1,727,491
1,528,129
1,500,000
1,000,000
1,016,031
918,943
1,014,713
893,961
500,000
0
2020
Borderplex (City Population Only)
2030
McAllen/ Reynosa
Sources: Texas State Water Board; City of Las Cruces; Secretaria de
Gobernacion – Consejo Nacional de Poblacion
30
Queretaro
San Antonio
Average Household Size (2013)
4
3.6
3.1
2.9
3
2.7
The current size of households in El Paso and Juárez is
higher than the average size of a U.S. household. This is
likely due, in part, to culture, and in part to the fact that
wages in the area are low. The larger household size is
indicative of larger family size and an increased burden on
the economy presented by non-working residents.
2
1
0
El Paso / Las
Cruces
McAllen MSA
San Antonio MSA
US
The lower average household size in Las Cruces could be
a result of the number of older university students living in
the smaller city with permanent resident status.
Source: U.S. Census Bureau; Instituto Nacional de Estadística y Geografía
Average Household Size (2000-2010)
Juárez
5
4
4.1 4.2 4.0
Querétaro
4.5
Chihuahua
Household size has been decreasing slightly in Juárez and
Querètaro. The three cities are not affording more living
space to residents than rural communities within each
state.
Querétaro (State)
4.2
3.8 4.0 3.8
4.0
3.7 3.9 3.6
2005
2010
3
2
1
0
2000
31
Quality of Life: Demographics
The majority of residents in El Paso and Las Cruces are
Hispanic or a cultural mix that includes Hispanic. The Hispanic
Juárez population is subdivided into a number of indigenous
Indian and other contributive backgrounds.
Race and Ethnicity (2013)
100%
0.2%
1.4%
2.0%
90%
The cooperative bi-racial, bi-cultural, bilingual nature of the
region is one of the area’s greatest strengths. El Paso/Juárez
is the largest bi-national, bi-racial single community in North
America. Centuries of healthy coexistence have produced a
regional community with no obvious major racial tensions.
17.1%
80%
5.0%
54.5%
70%
60%
3.2%
12.3%
Household sizes are larger, and many families have
remained intact within the region for decades. The moderate
isolation of the area helps to preserve ethnicities over time.
This large pool of protected genetic and ethnic populations
has attracted significant interest from researchers, including
decision makers that opted to locate a medical school in El
Paso.
78.1%
91.0%
50%
2.1%
40%
6.2%
62.4%
30%
20%
10%
1.0%
2.8%
“In this area, we don’t really see color. We see
the faces of next-door neighbors, the clerk at
Home Depot, doctors, teachers and all the
other people who make up our daily life. Race
is not a divider here. We celebrate and share
our different cultures.”
35.1%
16.7%
1.0%
0.4%
7.3%
El Paso / Las Cruces
McAllen MSA
0%
San Antonio MSA
White (non Hispanic)
Black (non Hispanic)
Hispanic or Latino
Other
US
Asian (non Hispanic)
Source: U.S. Census
Bureau
32
Quality of Life: Household Incomes
Household Income by Income Group (2013)
100%
4.8%
3.2%
17.5%
17.0%
80%
60%
32.3%
40%
27.3%
9.9%
24.5%
24.6%
33.5%
31.5%
20.8%
21.1%
12.8%
13.0%
29.9%
26.2%
20%
18.1%
8.3%
23.6%
0%
El Paso / Las
Cruces
McAllen MSA San Antonio MSA
Less than $14,999
$15,000 to $34,999
$75,000 to $149,999
$150,000 or more
US
$35,000 to $74,999
Charts Source: U.S. Census Bureau
33
The border region between Mexico and the U.S.
has long enjoyed a reputation as a low-cost labor
base, attracting the kinds of industries that consider
wages a major determining factor. However, those
low wages translate into significantly lower income
than in non-border areas of the U.S.
Income levels within Juárez vary dramatically
between unskilled laborers and the white collar
executive or management workforce. The average
annual salary for white collar workers can range from
$25,000 USD for an engineer to $132,000 USD for a
plant manager according to NUMBEO. In contrast,
stakeholders reported during interviews that the
average maquila worker earns between $2,600 to
$5,000 USD annually.
Quality of Life: Cost of Living
Real Personal Income (2012)
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Regional Price Parity Index (2012)
$39,436
$42,693
100
100.0
$30,587
95.0
$25,008
94
91
90.0
85
85.0
80.0
75.0
El Paso/Las
Cruces
McAllen
San Antonio
US Total
El Paso/Las
Cruces
Source: Bureau of Economic Analysis
McAllen
Source: Bureau of Economic Analysis
Price Comparison 2014
Incomes are 28 percent lower in the region than in the U.S.
average. That is partially offset by the fact that money goes
further in the region. El Paso has nine percent and Las Cruces
has 7.5 percent more buying power than the average U.S. city.
While that does not completely balance the inequity of
salaries in the area, the price parity does incrfease the
competitive advantage of the area in the eyes of prospective
businesses.
Rent prices are 26 percent lower in Juárez than in
Querètaro, and restaurant prices are 16 percent lower.
Groceries, however, are 20 percent higher on average in
Juárez than in Querètaro, indicating that Juárez residents are
affected by higher grocery prices across the border and may
be limited in their ability to access lower cost food stores.
34
San Antonio
US Total
2013 Median Gross Rent (Dollars)
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
Average Juárez Housing Cost (Monthly)
$857
$718
Monthly Rental Price
$905
Apartment 1 BR City Center
Apartment 1 BR Non-Central
Apartment 3 BR City Center
Apartment 3 BR Non-Central
$655
Pesos
U.S. Dollars
$2,250
$2,500
$4,750
$6,000
$167
$185
$352
$444
Source: NUMBEO, based on .074 Mexico/U.S. Exchange Rate
Rent as a Percentage of Household Income
(2013)
100%
El Paso / Las
Cruces
McAllen MSA
San Antonio
MSA
US
Source: U.S. Census Bureau
The monthly cost of housing is lower in El Paso and Las
Cruces than in San Antonio and significantly lower than in the
average U.S. city. Estimates for the monthly cost of housing in
Juárez is dramatically lower than in any of the U.S. cities
tracked. Juárez housing conditions vary in the extreme, and
include a high number of poverty-stricken colonias within the
city.
90%
13.3%
14.4%
12.4%
12.1%
80%
11.7%
11.8%
14.1%
12.3%
70%
10.6%
13.7%
13.6%
12.6%
60%
13.9%
12.4%
11.4%
9.2%
8.4%
39.1%
42.5%
38.7%
50%
40%
8.8%
11.5%
9.0%
30%
20%
42.5%
10%
0%
El Paso / Las McAllen MSA San Antonio
US
Cruces
MSA
35.0 percent or more
30.0 to 34.9 percent
The lower rents help to offset lower paychecks in the region.
Like many of their counterparts along the Mexico/Texas
border, the majority of residents in El Paso and Las Cruces pay
25 percent or more of their salaries for housing. Overall,
regional residents devote similar percentages of their overall
income to provide for housing.
Less than 15.0 percent
35
Quality of Life: Commute Times
Mean Commute Time to Work in
Minutes (2013)
Methods of Commuting to Work in El
Paso (2013)
30
23
25
25
26
22
20
2% 3%
Drove alone in a car,
truck, or van
3%
2%
Carpooled
12%
Public transportation
(excluding taxicab)
Walked
20
15
10
5
78%
0
El Paso
Las
Cruces
McAllen
San
Antonio
US
Other means
Worked at home
Means of Commuting to Work in
Juárez (2013)
1.4%
Methods of Commuting to Work in
Las Cruces (2013)
0.1%
0.30%
9.5%
Vehicle
Drove alone in a car,
truck, or van
3% 1% 3%
Carpooled
11%
Public transportation
(excluding taxicab)
Bus
Walked
Walking
Bicycle
36.8%
52.0%
Other
Source: Asi Estamos Juárez, Encuesta de Percepcion de Calidad de Vida, 2013
82%
Other means
Worked
at home
Source: U.S. Census
Bureau
36
Commute times for El Paso and Las
Cruces are favorable, as long as the
commuter does not cross the border
to Mexico each day. A Dedicated
Commuter Lane may reduce wait
times for some workers. Commute
times tracked by the U.S. Census
Bureau do not accurately account for
cross-border movement.
Overwhelmingly, El Paso and Las
Cruces commuters drove alone to and
from the job. There is slight
carpooling activity, but virtually no
commuters use public transportation
and very few walk.
Half the commuters in Juárez drive
to work. Another large percentage
take advantage of public or private
buses. The much larger percentage of
people riding buses in Juárez is a
result of lower incomes, fewer
workers owning vehicles of their own
and of available transportation
provided by maquilas.
Quality of Life: Crime
Rates of Property Crime per 100,000 residents (2012)
Rates of Violent Crime per 100,000 residents
(2012)
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
450
400
350
300
250
200
150
100
50
0
El Paso/Las
Cruces
McAllen
San Antonio
US
El Paso/Las Cruces
McAllen
San Antonio
US
Source: FBI Crime Stats
Source: FBI Crime Stats
Homicides in Cuidad Juárez (2007-2014)
Violent crime in Juárez, particularly homicide, has been an
issue of much concern since 2008, when reported homicides
jumped from 320 to 1,623 in a one-year period. Experts
attribute the homicide escalation to drug cartel activity, rival
gang activity and extortion activity within the city. The
homicides began to decline again in 2012, due in large part to
the self-impetus and coordination of citizen and government
groups. Homicides for 2014 are estimated to drop to 500.
Violent crime activity does not appear to be spilling across
the border. Reported violent crimes for El Paso were
comparable to other U.S. cities in 2012, and violent crime in
Las Cruces was lower than average. Las Cruces property crime
does run slightly higher than average in the U.S., while
property crime in El Paso is mild.
SoPulse
4,000
NMSU
3622
3,500
3,000
2754
2,500
2086
2,000
1623
1,500
797
1,000
500
500
320
0
2007
2008
2009
2010
2012
2013
2014
Sources: Southern Pulse, NMSU Molloy Study
37
Quality of Life: Poverty Indicators
Percent of Families Whose Annual Income is Below
the Poverty Level (2013)
Health Insurance Coverage (2013)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
27.1%
19.4%
14.5%
36.4%
45%
38%
40%
34%
35%
72.9%
80.6%
85.5%
63.6%
25%
20%
30%
27%
30%
20%
22%
19%
18%
13%
15%
12%
10%
El Paso / Las
Cruces
McAllen MSA
With health insurance coverage
San Antonio
MSA
US
5%
0%
El Paso
No health insurance coverage
An April 2013 study by Colegio de la Frontera (COLEF) found that that
37 percent of the Juárez population is unable to meet basic needs.
COLEF estimates that 432,000 residents live in poverty and another
62,000 live in extreme poverty. Most of those in extreme poverty live in
the southwest portion of the city, where, in 2013, the average factory
worker earned an estimated $700-800 pesos or $57-66 USD per week.
All families
Las Cruces
McAllen
San Antonio
All families with related children under 18 years
Juárez 2013 Poverty Indicators
States bordering Mexico in the U.S. have higher poverty rates than the
U.S. on average, with McAllen showing the highest rate at 38 percent.
Not surprisingly, families with dependent children in the area are at
greater risk of poverty.
Border cities also have higher percentages of uninsured residents,
with McAllen showing the highest rate of benchmarks at 36 percent,
compared to 31 percent for Juárez, although the categories are not
completely comparable between countries.
Source: Colegio de la Frontera Norte
38
US
Borderplex regional Scorecards
RANKING OF BORDERPLEX QUALITY OF LIFE FACTORS
Assessment Rationale
Quality of Life Variable
• Bi-Cultural
• Bilingual
Diversity
• Slow to moderate
Population Growth
• Lower than U.S. Average
Household Incomes
• Affordable factors
Cost of Living
• Reasonable commute times
Commute Times
• Affordable rents
Housing Characteristics
• Closing Violent Crime Wave Juárez
• Lingering Perception of Crime
• Significant Poverty
Crime & Poverty
Overall Quality of Life
39
Leading
Strong
Average
Weak
QUALITY OF LIFE & EDUCATION
WORKFORCE
New Mexico State University College of
Fine Arts and Sciences
UTEP Sunbowl Stadium
Workforce and education measures the human dimension of economic
development – the talent available in a given market. Education informs
the skills of the workforce and a community’s capacity to align those skills
with the demands of the marketplace.
asset as the region advances further into life sciences and health services.
Many local community colleges operate as feeder schools to four-year
universities but could better serve the region by focusing more on
technical and skills training. Greater cooperation between schools and
universities and with industry leaders will boost economic development.
Conredes, a joint effort supported by 11 top Juarez manufacturers and
major regional universities, is working to better align education to needed
workforce skills.
As global and domestic competition intensifies, and economies grow more
dependent on technology and innovation, workforce and education has
grown more central to economic development. Higher education has
been the fastest growing sector in El Paso and Las Cruces since 2008.
A lack of middle- and high-skill jobs in the region has limited career path
opportunities and has driven a number of university graduates out of the
region. Some employers, meanwhile, note that the skills of graduates
don’t match the needs of the marketplace. This is particularly acute
among the large number of engineering graduates the region churns out.
The region is a diversified economy with a wide array of workforce needs
and skill levels. Different histories, cultures, languages and education
resources threaten uneven development but can also be an economic
driver.
The region’s universities are critical to moving the area’s economy beyond
its dependency on manufacturing into cutting-edge sectors like health
sciences, aerospace, and information technology. Three universities,
NMSU, UTEP and Autónoma account for $233 million in R & D
expenditures, and issue nearly 20,000 undergraduate and graduate
degrees a year, most of them in the humanities, business and
engineeringields. Much of the R & D is concentrated on engineeringrelated fields and include focuses in aerospace, biomedicine, and
electronics.
The Manpower Group in its 2011-2012 labor market study of the region
found that many employers feel the local workforce is not adequately
prepared to take on specialized management and professional positions,
and that graduates of higher-learning institutions possess theoretical
knowledge but lack useable on-the-job skills.
Underemployment and lack of career opportunities for young members of
the workforce carry long-term economic implications, intensifying the
need for adequate skills training and career development.
Regional enrollment at all colleges and universities has surpassed 127,000.
El Paso and Las Cruces have a higher percentage of their civilian adult
populations enrolled in college or graduate school than other major towns
along the US-Mexican border. The region has two medical schools with a
third opening in Las Cruces in 2016.
“It’s the lack of soft skills that causes me
the greatest headache in hiring – the
ability to dress appropriately, to interact
on a professional level with the public, the
ability to get to work on time every day.”
Texas Tech University Health Sciences Center at El Paso’s Paul L. Foster
School of Medicine is the only medical school along the US-Mexico border
specializing in cancer, neurodegenerative diseases and other areas of
research. The hands-on clinical and research settings are an enormous
41
Workforce & Education Cont.
Perceived shortcomings in quality of life (addressed in a separate section of
this report) have drawn university graduates outside the region after
graduation, shrinking the talent pool. Low wages have also informed this
trend. One study found the 85% of UTEP engineering graduates left the
region for employment and secured wages up to 50% higher than in El Paso.
Quality of life also factors in to whether companies locate in the region, in
turn impacting the scope and scale of the region’s workforce.
Age Distribution (2013)
100%
7%
10%
5%
90%
80%
A gap between wages and jobs – most pronounced in the maquila industry
– is hindering social mobility. Poverty, transience and low graduation rates
further weigh on work prospects and the availability of talent, and this has
pushed some residents into the informal sector. Unemployment rates in El
Paso and Las Cruces are on the downswing but still higher than their state
and national averages. Wages in the maquiladoras are relatively low, at
$178 per week, and are stressing households given the large number of
single mothers with children under 14. More than 50% of Juárez’ workforce
is under 30. Age distribution in El Paso and Las Cruces also leans young,
putting financial stress on households and potentially compounding poverty
in the region.
19%
12%
18%
18%
24%
70%
60%
22%
26%
23%
20%
65+
20%
50%
40%
14%
19%
25%
23%
30-44
27%
22%
30%
15-29
21%
20%
Most jobs in El Paso are in the retail sector, while in Las Cruces/Doña Ana
County healthcare and social assistance accounted for the largest share of
jobs followed by retail. In Juárez the bulk of jobs are found in manufacturing
but the sector lacks qualified technicians.
10%
27%
29%
27%
22%
19%
0%
BorderPlex McAllen Querétaro
San
MSA
Antonio
MSA
A shortage of soft skills among younger workers came up frequently in
discussions with regional business leaders, as did a limited number of
bilingual speakers. However, the bilingual nature of the region, along with
an affordable workforce, has helped attract call centers and lends itself well
to customer service and management positions.
United
States
Source: U.S. Census Bureau; Secretaria de Gobernacion – Consejo Nacional de
Poblacion
Sourcing more local suppliers will boost the skills and numbers of the local
workforce, as will firmly integrating various facets of growing fields such as
life sciences into the regional economy.
42
45-64
0-14
Workforce & Education: Migration
Percent Foreign Born (2013)
35%
30%
25%
29%
25%
20%
15%
12%
13%
10%
The percentage of foreign-born residents in El Paso is nearly double
the national average. Many new arrivals bring lower education and skill
levels, reflected in the lower incomes in El Paso and Las
Cruces compared to their state and national averages. The high
number of new arrivals also safeguards against labor shortages.
5%
0%
El Paso / Las
Cruces
McAllen MSA
San Antonio
MSA
US
Foreign Born Residents by Year of Entry (2013)
“Companies need to develop upward
mobility paths and educate workers
on how to move ahead.”
Entered 2010 or Later
100%
80%
60%
90.4%
91.9%
89.1%
90.3%
9.6%
8.1%
10.9%
9.7%
El Paso / Las
Cruces
McAllen MSA
San Antonio
MSA
US
40%
20%
0%
43
Workforce & Education: Jobs by Industry Sector
Formal Employment by Sector (2014)
Employment by Sector (2013)
El Paso / Doña Ana
County
Percentage of
Total
4,374
1.2%
Agriculture
0.0%
0.5%
4.6%
5.9%
3.2%
13.0%
4.0%
1.9%
2.6%
1.5%
3.5%
0.2%
6.8%
0.9%
14.6%
0.9%
10.2%
2.3%
Mining & Natural Resources
Other
165
1,854
16,228
20,732
11,161
45,646
13,982
6,596
9,061
5,319
12,317
654
23,903
2,992
51,445
3,010
35,960
7,988
Public Administration
20,477
5.8%
Sector
Agriculture
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Retail Trade
Logistics
Information
Finance and Insurance
Real Estate
Business Services
Management
Waste and Remediation
Educational Services
Health Care
Arts and Entertainment
Travel and Food Services
Sector
Share of
Total
Juárez
1,021
0.3%
30
0.01%
234,038
63.8%
10,581
2.9%
2,473
0.7%
Trade
40,194
11.0%
Transportation & Communication
13,840
3.8%
Business & Professional Services
Healthcare, Education, &
Community Services
42,979
11.7%
21,574
5.9%
Manufacturing
Construction
Utilities & Water
Total
366,730
Sources: Bureau of Labor Statistics; Instituto Mexicano del Seguro
Social; AngelouEconomics
44
Workforce & Education: Maquilas
No. of Maquilas (July 2014)
The maquila industry’s employment and factory numbers have held steady
despite the global economic downturn and Juárez’ cartel and gang violence; the
city has added 12,000 maquila jobs from December 2013 to June 2014,
comparable to jobs added for all of 2013.
475
500
400
310
300
214
200
104
100
0
Juarez
Queretaro
Chihuahua
state
Queretaro
state
The trend of nearshoring could further improve the industry’s outlook, with its
many advantages over offshoring, including lower freight costs, improved speed
to market, fewer supply disruptions, better quality control and stronger
intellectual property security. Nearshoring also carries the potential to bring
more sophisticated facets of the production chain closer to home and could
make better use of the 100,000 Mexicans who earn engineering degrees a
year. Securing this transition will require companies to work more closely with
universities, technical schools and training centers to ensure the region’s
workforce is able to handle more complex assembly processes.
No. of Maquilas in Querètaro (2008-2014)
No. of Maquilas in Juárez (2008-2014)
350
120
115
110
105
100
95
90
85 90
80
75
70
340
105
No. of Maquilas
No. of Maquilas
2008
343
345
335
330
325
320
315
310
310
305
2009
2010
2011
2012
2013
300
2014
2008
2009
2010
2011
2012
2013
2014
45
Workforce & Education: Maquilas
Maquilas employment numbers have nudged upward in
recent years. The maquila sector is the primary reason why
Juárez tops all other Mexican cities in FDI dollars with $750
million, which is about half the total for Chihuahua state.
Maquiladora Employment (2008-2014)
Juarez
Queretaro
250,000
215,202
Maquila laborers in Juárez make up a much larger portion of
the total payroll than the benchmarks.
200,000
150,000
The maquilas provide steady income with vital benefits like
health insurance. But many do not provide much room for
advancement and pay relatively low wages. These
characteristics along with the size of the maquila workforce
combine to greatly influence the shape and outlook of Juárez’
economy.
100,000
50,000
0
2008
2009
2010
2011
2012
2013
2014
Maquila Payroll Excluding Management (2007-2014)
Total Maquila Payroll (2007-2014)
Juarez
Chihuahua state total
Queretaro state total
Queretaro
Juarez
Chihuahua state total
Queretaro state total
Queretaro
$1,500,000
$2,500,000
$2,000,000
$1,000,000
$1,500,000
$1,000,000
$500,000
$500,000
$0
2008
2009
2010
2011
2012
2013
$0
2014
2008
2009
2010
2011
2012
2013
46
2014
Workforce & Education: Workforce Mobility
A larger portion of residents from Las Cruces commute to
El Paso than the other way around, indicating an imbalance
in regional integration.
El Paso
A large majority of El Pasoans work in El Paso, while a good
share of Las Cruces residents work outside of Las Cruces,
according to “On the Map,” a data set within the U.S. Census.
That data indicates that there more Las Cruces residents
listed an employer or office in Albuquerque than El Paso.
That could be indicative of a large amount of contracting
employment for Las Cruces residents who work for
companies based outside the city.
“Talking to the right people in each area
and getting their buy-in is going to be the
make or break to any regional plan.”
Las Cruces
47
Source: U.S. Census
Bureau
Workforce & Education: Educational Attainment
Educational Attainment (2013)
Educational Attainment (2010)
Juárez
16%
14%
12%
10%
8%
6%
4%
2%
0%
100%
Queretaro
90%
14.8%
24.6%
70%
60%
0.6%
Residents 18 years and over
with post-high school training
1.7%
40%
23.1%
6.9%
20%
14.9%
10%
The region’s relatively low level of degree attainment invites
low-wage, low-productivity investment, which weighs on social
services and deprives communities of a robust tax base.
0%
23.0%
18.0%
7.5%
4.2%
17.4%
7.4%
4.2%
9.4%
48
8.1%
18.4%
11.2%
McAllen MSA San Antonio
MSA
US
No diploma
High school graduate (includes equivalency)
Some college, no degree
Associate's degree
Bachelor's degree
Graduate or professional degree
The consequences of this trend are somewhat offset by the
high ratio of bachelor and graduate degrees issued in the region.
21.1%
12.0%
El Paso / Las
Cruces
It also helps explain the large number of workers in retail and
lower-level manufacturing. Employers and community leaders
can help reverse this trend by moving students toward careers
that incentivize higher levels of education attainment.
27.8%
23.1%
30%
26.9%
23.1%
50%
Residents 18 years and over
with graduate degree
13.4%
38.4%
80%
7.9%
15.8%
Workforce & Education: Research & Development
Research and development expenditures in the region are robust, with
UTEP and NMSU leading the way. Research dollars stimulate economic
growth by nurturing talent and encouraging advancement into new
fields. They play a role in workforce preparedness, talent retention and
in boosting earning power. The universities can better make use of this
potential by strengthening linkages among themselves and with the
region’s private sector.
The primary R&D expenditures at NMSU are in engineering and life
sciences, with much of life science spending devoted to agricultural
sciences and engineering dollars spread across aerospace, biomedical,
chemical, electrical and other areas. The third largest investment goes to
the physical sciences with chemistry and astronomy getting the most
research dollars in the phys. sciences department.
Like NMSU, the primary research focus at UTEP is engineering and life
sciences with engineering money being spread more evenly between
civil, electrical, and mechanical engineering, while in the life sciences, the
largest recipient is biological science.
Continued robust R & D investment is critical to propelling the regional
economy into more advanced fields.
R&D Expenditures
Borderplex
Hidalgo County
Bexar County
Expenditures
Expenditures
Per Capita
$232,932,000
$97
$9,062,000
$11
$241,531,000
$133
Sources: National Science Foundation; AngelouEconomics;
Universidad Autónoma de Ciudad Juárez
Academic R&D Expenditures
U. TX, El Paso
NM State U.
$200,000,000
$150,000,000
$100,000,000
$50,000,000
$-
Source: National Science Foundation
49
Workforce & Education: Higher Education Resources
REGIONAL HIGHER EDUCATION INSTITUTIONS
Institution
Large Universities
Universidad Autónoma de Ciudad Juárez
University of Texas at El Paso
Branch Campuses/Community & Technical Colleges
El Paso Community College
Doña Ana Community College
Universidad Tecnologica De Ciudad Juárez
Instituto Tecnológico de Ciudad Juárez
Vista College
Universidad Autonoma De Chihuahua
Centro Cultural Universitario De Ciudad Juárez
Southwest University at El Paso
Kaplan College-El Paso
Western Technical College
ITESM Campus Ciudad Juárez
Universidad Regional Del Norte Cd. Juárez
International Business College-El Paso
El Colegio De Chihuahua
Location
Medical Schools
Institute of Biomedical Sciences, Universidad Autónoma de Ciudad
Juárez
Burrell College of Osteopathic Medicine
Texas Tech University Paul L. Foster School of Medicine
Students
Juárez
El Paso, TX
Las Cruces, NM
24,442
23,003
16,765
El Paso, TX
Las Cruces, NM
Juárez
Juárez
El Paso, TX
Juárez
Juárez
El Paso, TX
El Paso, TX
El Paso, TX
Juárez
Juárez
El Paso, TX
Juárez
TOTAL STUDENTS:
30,468
8,837
7,350
5,502
2,746
2,258
2,027
1,296
681
651
555
381
196
7
127,165
Juárez
Las Cruces, NM
El Paso, TX
1,253
1,200
200
Source: National Center for Education Statistics; Texas Tech University; AngelouEconomics
50
Borderplex regional Scorecards
RANKING OF BORDERPLEX WORKFORCE & EDUCATION FACTORS
Variable
• Low unemployment rate
• Shrinking labor force
Employment Trends
• High weekly wage
• Wages have grown rapidly
Wages & Wage Growth
• High median age
• Decline in share of young professionals
Young Professionals
• Workforce is mostly imported from
surrounding areas
• Only one third of residents leave city for work
Workforce Mobility
• Well educated population
• Slow growth in higher education attainment
Educational Attainment
• High quality primary education
• High ACT scores
• Graduation rates lower than state average
Primary Education
• Extensive high quality local and regional
educational institutions
Higher Education
• Low research and development funding
Research & Development
Overall Learning and
Working Environment
51
Leading
Strong
Lacking
Weak
QUALITY OF LIFE
BUSINESS
CLIMATE
El Paso/Juárez
Rio Grande Theater, Las Cruces
Business Climate
Business climate describes the general economic environment of a
geographic area. It encompasses the local cost of doing business,
the attitudes of a community’s public and private sectors toward
business activity, and is pivotal in attracting or deterring
investment, talent and business establishments.
region’s attractiveness to investors.
The two existing medical schools and another that is planned in
Las Cruces promise to improve the region’s overall business
climate. So too will Santa Teresa/San Jeronimo port of entry,
which will be a free-trade zone replete with a railway hub,
international cargo airport and congestion-free roads and border
crossings. Ease of doing business at the port will further be
improved if a pre-clearance customs-inspection center is
approved.
Straddling the US-Mexican border has afforded the region with
some powerful economic advantages. But with three distinctive
governments and business communities, the region has over time
developed divergent, often competing business climates that in no
small way inform the prospects of one another. For example, a
recent sales tax hike in Juárez is projected to redirect $55 million
in retail sales north of the border to El Paso.
The region’s military and aerospace facilities are diversified
entities that are attractive to complimentary suppliers and support
services. Their scale of employment numbering in the tens of
thousands has improved the outlook of various sectors including
real estate and retail. Military spouses and veterans associated
with these installations are an underutilized asset of the labor
force, who can transition into the region’s universities and
colleges through the GI Bill and enter the labor force through with
targeted job training and placement for veterans and their
families.
This tendency diminishes the region’s business attractiveness as a
whole while undermining the prospects of Las Cruces, Juárez and
El Paso individually.
Clarifying the strengths and weaknesses of each respective
community’s business climate and where the climates needlessly
diverge will be critical to cultivating a unified strategy that
improves ease of doing business in the region.
Retail and healthcare comprise the largest number of businesses
in El Paso and Las Cruces. Manufacturing and trade account for
the largest number in Juárez. Most jobs in these sectors pay low
wages, though pay levels may rise as the regional economy
matures.
Jobs in the maquilas, which make up the largest portion of
manufacturing jobs in the region, tend to be long-term, providing
stability for employers and employees alike. The maquila industry
weathered the global economic crisis well, further improving the
Juárez Maquilas by unargentinoenJuárez
53
Business Climate Cont.
An underdeveloped supply chain has led to fewer directions to grow
a business, while limited engagement between key business
stakeholders has afforded fewer synergies.
A lack of lobbying at the state and federal levels is hindering the
advancement of a business environment tailored to local interests.
Crime, particularly in the form of extortion, has produced a business
climate unfavorable to small businesses south of the border. A
reputation for violence has deterred some businesses from
relocating to the region, but those perceived risks have been partially
offset by the low cost of doing business and economic efficiencies
along the border.
A shortage of data in all three Borderplex cities has deterred a
number of businesses – from big box retailers to multinationals –
from settling in the region.
El Paso County and Doña Ana County
Business Establishments by Sector (2013)
2,568
Retail Trade
Health Care
Construction
Business Services
Other
Wholesale Trade
Logistics
Real Estate
Manufacturing
Agriculture
Information
Utilities
Management
Mining
Several business stakeholders stated that permitting is often
informed by connections rather than a standardized process;
nepotism in general is seen by many as an impediment to doing
business.
2,140
1,721
1,716
1,678
1,578
1,247
1,021
950
940
935
721
280
274
220
217
190
80
62
30
0
1,000
2,000
3,000
This offers the area some flexibility in terms of how it wants to grow.
Business establishments have grown in number in El Paso over both
the short and longer terms. Las Cruces has undergone net
contraction. Not surprisingly some of El Paso’s largest gains in
establishments have been in healthcare, education and food and
accommodation; a successful downtown revitalization will spur
further growth in food and accommodation, as well as construction,
retail and real estate. Doña Ana County is likely to see marked
improvement in manufacturing, wholesale trade, transportation and
warehousing if Santa Teresa port of entry becomes a success.
Bureaucratic inefficiencies, especially on the southern side of the
border, are affecting everything from travel times to permitting. This
threatens to deter investment, at a time when many U.S. companies
are looking to bring their manufacturing operations back from China
and closer to home, where they can take advantage of skilled labor
and cost savings on logistics.
Taken in combination, the region’s business establishment base is
relatively diversified.
54
Business Climate: Cost of Government
Growth in the number of businesses in Juárez has been minimal. The
challenge for Juárez will be for its maquilas to invest more in skilled
workers and advance up the value-added chain.
Start-up and tech entrepreneurs note a small amount of venture
capital and angel and seed funding in the region to support their
entrepreneurial efforts, though some start-ups have received local
funding, indicating that an incipient multiplier effect may be under
way.
Patent activity in the region is low, suggesting a shortage of innovation
in the region. Patent activity does not necessarily translate into an
innovative economy, as many patented inventions are not
commercialized, but it does strongly correlate with experimentation,
technology and knowledge-sharing, all foundations of economic
transformation. The medical industry – a major economic driver in the
region – makes among the best use of patents, as research and
development in this field is expensive and the short-term monopoly of
patents gives inventors a window through which to recover their costs
of research and development. Biomedicine, life sciences, rapidprototyping, advanced materials, agriculture, and energy are other
areas of R & D in the region that could stand to benefit from stronger
patent activity. The large number of engineering students in the region
can also leverage patents to their advantage.
Texas’ and New Mexico’s corporate tax rates rank 38 and 40 among
states respectively. Sales tax rates are relatively high at 36 and 45. New
Mexico ranks first in property tax, while Texas ranks 35th. Texas ranks
10th overall in terms of business taxes, and overall has a very business-
55
friendly reputation, which can be marketed to attract more businesses
to the North American Borderplex Region.
*Cost of Government Per Capita (2013)
General
Revenues
Cost of
Government*
El Paso/Las Cruces
989,164,754
$1,275
McAllen
$158,000,000
$1,170
$1,680,232,470
$1,214
San Antonio
Sources: Various City Resources; Instituto Nacional de Estadística y Geografía
*Cost of Government Per Capita (2012)
Revenue from
Taxation
(Pesos)
Cost of
Government*
Juárez
$960,569,000
$686
Querétaro
$836,810,000
$995
*The cost of government is equal to the sum of general revenues divided
by the total population.
Business Climate: Patents
Better coordination between local economic development
organizations and other key stakeholders will go a long way in further
improving the region’s business climate.
Mexican President Enrique Peña Nieto’s reform agenda has broken
down the state’s monopoly on oil, gas and electricity to allow for
limited private investment. The telecommunications sector has also
been opened up to competition. Mexican officials have reached out to
international investors to promote investment. The hope is that
greater outside involvement in the energy supply chain will create
direct and indirect jobs and that growing production will decrease
energy costs to industry and consumers. More than 30 exploratory
wells along the Mexican side of the U.S. border and hydraulic
fracturing is being considered for the state of Chihuahua.
Patents by Year (2007-2011)
El Paso, TX
Las Cruces, NM
San Antonio-New Braunfels, TX
McAllen-Edinburg-Mission, TX
350
315
327
300
250
200
187
169
149
150
“We live in a region where international
commerce is the main income. Over $6
million in exports cross the border here
every hour. ”
100
50
33
16
25
5
5
4
1611
2321
7
3
23
15
1
0
2007
2008
2009
2010
2011
Source: U.S. Patent Office
56
Business Climate: Competitiveness
Doing Business in Mexican Cities – Rankings
(out of 35), 2014
Getting a construction permit in Juárez involves 17 procedures,
whereas other cities such as Culiacan have streamlined procedures
through a one-stop shop. The state of Chihuahua’s overall “Doing
Business in Mexico” ranking by the World Bank Group fell from 22
to 27 between 2012 and 2014. The state has improved in terms of
starting a business and enforcing contracts. The overall business
climate of Juárez is improved by its position along the US-Mexican
border, but could be improved further still if wait and processing
times are decreased.
Juárez
Querètaro
Starting a Business
29
12
Dealing with Construction
Permits
32
17
Registering Property
7
11
Enforcing Contracts
13
24
Source: World Bank Group
State Business Climate Rankings, 2014
“To do business in Mexico, you need a
liaison who knows the political
landscape. If you don’t know the right
people, you will never be able to get a
job done.”
TX
NM
Overall Rank
11
38
Corporate Income Tax
38
40
Individual Income Tax
7
34
Sales Tax
36
45
Unemployment Insurance
Tax
14
17
Property Tax
35
1
Source: Tax Foundation
57
Business Climate: Business Establishments
Business Establishments in Juárez by Sector (2014)
Healthcare, Education, & Community…
892
Manufacturing employs the highest number of people
in Juárez by far, but most businesses are small
establishments of fewer than nine people, many of which
operate in the informal sector and lack access to
capital. Their informality and lower profit margins shrink
the tax base, and without the resources to procure strong
legal protection and security, they are vulnerable to
extortion by local collectors.
2,453
488
Trade
2,133
Utilities & Water
14
Construction
835
Manufacturing
1,389
Mining & Natural Resouces
4
Agriculture
57
0
1,000
2,000
Sources: Instituto Mexicano del Seguro Social
Business Establishments in Querétaro by Sector
(2008)
Trade
Nonfinancial private services
15,302
14,017
Manufacturing
2,602
Construction
298
Financial and insurance services
247
Transport
153
0
“A lot of kids leave school early to
help earn money for their families.
The workforce is young and largely
unskilled.”
10,000
20,000
58
Business Climate: Business Growth
Business establishments have grown in number in El Paso over
both the short and longer terms. Las Cruces has undergone net
contraction. Not surprisingly some of El Paso’s largest gains in
establishments have been in healthcare, education and food and
accommodation; a successful downtown revitalization will spur
further growth in food and accommodation, as well as
construction, retail and real estate.
Business Establishment Growth Trends
2011-2012
10%
5%
Doña Ana County is likely to see marked improvement in
manufacturing, wholesale trade, transportation and warehousing
if Santa Teresa port of entry becomes a success. Growth in the
number of businesses in Juárez has been minimal.
4%
3%
2%
2% 3%
0%
-2%
-5%
-6%
-10%
El Paso County
Growth Trends in Businesses
1998-2008
2007-2012
9%
2003-2008
Doña Ana
County
Hidalgo County Bexar County
Source: U.S. Census
Bureau
60%
48%
50%
40%
“The region needs continuity with
respect to business climate factors,
including regulations and permitting.”
33.0%
30%
20%
10%
4%
0.2%
0%
Juárez
Querétaro
59
Borderplex Regional Scorecards
RANKING OF BORDERPLEX BUSINESS CLIMATE FACTORS
Business Climate Variable
• Property tax is ranked highly in New Mexico
• Income tax is ranked highly in Texas Both states
ranked low in corporate income tax
Tax Climate
• Relatively high cost of government
Cost of Government
• Decline in number of business establishments
• Gradual increase of business establishments in
Juárez and El Paso
Business Growth
• Relatively strong diversification of businesses in
all three Borderplex cities
• Employment diversification is not as diverse
• Small amount of patent activity
Business Establishments
Patent Activity
Overall Business Climate
60
Leading
Strong
Average
Weak
QUALITY OF LIFE
INFRASTRUCTURE
City of Las Cruces City Hall
Cuidad Juárez
Infrastructure
Poised at the intersection of northern Mexico and West Texas, the
North American Borderplex Region lays claim to a geographic area with
an optimal location for North American trade. The Juárez-El Paso
community is the second-largest international community on the U.S.
Mexico border, outpaced only by the San Diego/Tijuana area. The
region is a nexus for the flow of raw materials and goods to Texas, New
Mexico, Colorado, Wyoming and Montana and everything east. Trade in
goods and services between Mexico and the U.S. was $500 billion in
2013, according to Stephen Selig, Undersecretary of Commerce for
International Trade.
In order for the region to continually optimize manufacturing, logistics
and distribution industries, infrastructure will always be a key
consideration. The distance of Juárez from Mexico City and of El Paso
from Austin and Washington, D.C. fosters a lack of proper consideration
and funding by governments. During interviews and in surveys,
stakeholders termed underfunding of infrastructure by federal and
state governments to be one of the most critical issues faced by the
region.
There are five inland port vehicle security stations in the region. The
U.S. sides of the Bridge of the Americas in El Paso and Santa Teresa
in New Mexico are operated by the U.S. government. The Paso del
Norte Bridge and its partner Santa Fe Bridge, Stanton Bridge and
Zaragoza Bridge, are owned by the city of El Paso on the U.S. side.
The new Torillo Bridge is owned by El Paso County.
Wait times for northbound traffic at the Juárez-El Paso stations can
be up to three hours at peak, due primarily to the lack of inspection
officers assigned to existing lanes by the U.S. Customs and Border
Protection Department of Homeland Security. Government funded
infrastructure improvements to the ports have been inadequate to
keep pace with traffic. Stakeholders have touted technology
improvements as the future key to overcoming the gridlock.
A 2011 Texas Department of Transportation report noted that lack
of funding has caused wait times on the bridges to increase by 60
percent since 2005. The City of El Paso is considering numerous
options to partner with the U.S. Customs and Border Protection
agency to provide more officers and thus open more lanes. Those
options included a recent toll increase and city funds for additional
personnel.
“The border crossing process is severe
and unrealistic. There needs to be better
coordination and established protocol
that is the same for both sides.”
- Stakeholder interview participant
62
Infrastructure
The region has the opportunity to become a a global best-practice
center for logistics and transportation networking. An interconnected
series of highways in good condition tie the area to highways
throughout the eastern two-thirds of the U.S. and Canada. Westbound Highway 10 access is available from Las Cruces that
interconnects with highways through Tucson and Phoenix and points
north and west. Mexico’s Highway 45 also binds the region to
interconnections with a good portion of North Central Mexico.
Four rail companies – Amtrak, Ferromex North Pacific, Union Pacific
and Burlington Northern (BNSF) serve the region. Rail crossing the
border to connect with El Paso currently runs directly through
downtown Juarez, disrupting activity there. Mexico’s federal
government is proposing that a rail line be built to bypass the city.
Union Pacific has opened a new station in Santa Teresa/Jeronimo, but
the company does not believe the region will support additional
north/south rail traffic. UP instead supports expanding bi-modal truckto-train transportation loaded in Santa Teresa.
There has been significant press suggesting the Mexico government
has plans to connect the Juárez bypass rail with Jeronimo and Santa
Teresa, therefore reducing the time restrictions in the area and
increasing north/south rail capacity between Juárez and El Paso.
However, without a change in direction by UP or additional
north/south infrastructure, rail will not be a significant option for
transportation in the region in the foreseeable future.
The region has international airports in both El Paso and Juárez and an
airport that support international flights in Santa Teresa. However, air
infrastructure needs to be improved to handle business
destinations. The movement of freight by air in the region appears
to be minimal. Significant changes would need to be made in
infrastructure and more air service companies would need to be
active in the area for air to be a viable cargo transport option.
El Paso seems to have weathered the recession better than most
American cities, with slight increases in housing infrastructure and
a 17 percent decrease in vacant structures from 2008 – 2012. Las
Cruces housing infrastructure also increased slightly over the fiveyear time period, but the city suffered a 32 percent increase in
vacant houses. Juárez also experienced an increase in vacant
houses from 2008 forward, due to the recession coupled with the
extreme increase in violent crime during the five years. It is
estimated that 25 percent of housing infrastructure in Juárez is
unoccupied. Adding to the empty infrastructure are large
residential projects built in locations that do not coordinate with
population needs.
Industrial infrastructure development in Juárez took a hit in 2008,
and did not begin on an upward track for recovery until the 20122013 period. Significant construction appears to be currently
underway in the north, west, central and southeast areas of the
city, although absorption rates in the north and southwest are still
below normal. Vacant space in all three cities helps keep the
region the lowest-cost industrial infrastructure option on the
border.
El Paso Skyline facing Juárez
63
Infrastructure: Housing
Housing Occupancy (2013)
Housing Occupancy in Juárez (2010)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
uninhabited
124,219
inhabited
364,562
8.8%
13.0%
8.9%
12.4%
35.0%
28.4%
35.2%
32.0%
56.3%
58.6%
55.9%
55.6%
McAllen MSA
San Antonio MSA
US
Owner-occupied
40%
Renter-Occupied
30%
5% 7%
6%
22%
20%
20%
10%
Vacant
32%
25%
8%
3%
Juárez has several large worker housing complexes that currently sit
empty, but could be refinished if demand occurs. Juárez unoccupied
housing is estimated to be 25 percent of housing infrastructure, but
that estimate could be low. During the recession, many maquila
workers lost their jobs, and during the crime escalation of 2008 - 2012,
many families fled Juárez. Both factors added to the increase in
unoccupied homes. Stakeholders participating in interviews and focus
groups reported that corruption in government and building industry
contribute greatly to the mismatch of housing structures to population
areas.
8%
0%
-10%
-20%
-17%
-21%
-30%
El Paso
Las Cruces
McAllen
Vacant housing units
The housing market in El Paso remained stable during the recession
and early recovery years from 2007-2012. The number of vacant
houses actually decreased significantly (17 %) and rental property grew
25 percent during the time period, when troop numbers at Ft. Bliss
increased. The city outperformed the national housing market by
accumulating less vacant housing. Las Cruces owner-occupied and
rental property grew slightly, but the city suffered a 32 percent
increase in vacant housing.
Change in Housing Units by Occupancy Status
(2007-2012)
Owner-Occupied
Renter-occupied
San Antonio
64
Infrastructure: Housing
Age of Housing (2013)
100%
90%
80%
7.3%
50%
Las Cruces Home
Units in Structure Combined (2013)
100%
12.9%
17.8%
80%
14.3%
70%
7.8%
8.2%
8.2%
65.1%
65.7%
90%
0%
8.6%
12.2%
19.3%
17.9%
4.8%
60%
40%
67.4%
30.8%
29.6%
15.1%
14.4%
30.0%
14.1%
23.9%
3.9%
4.1%
3.4%
El Paso / Las
Cruces
McAllen MSA
San Antonio MSA
14.9%
1.5%
US
Built 2010 or later
Built 2000 to 2009
Built 1990 to 1999
Built 1970 to 1989
Built 1950 to 1969
Built 1949 or earlier
Housing available in the El Paso and Las Cruces portion
of the region is predominantly detached, single-family
structures, indicative of a level of population stability
similar to that of the rest of the U.S. Nearly 40 percent of
the housing in El Paso and Las Cruces was built 1990 or
after. The two cities have newer residential infrastructure than most cities in the U.S. on average.
8.3%
50%
30%
21.7%
23.9%
19.5%
18.4%
17.5%
34.2%
20%
10%
9.3%
29.7%
40%
30%
3.6%
8.8%
20.6%
70%
60%
61.5%
20%
10%
To attract new skilled young professionals, the region
will need to invest in more upscale housing that will offer
both rental and ownership options.
0%
El Paso / Las
Cruces
McAllen MSA San Antonio MSA
1-unit, detached
2 to 4 units
5 and up
US
Other
65
Infrastructure: Industrial - Juárez
NET ABSORPTION AND VACANCY RATE
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Thousands
Thousands
CONSTRUCTION SQ. FT.
2008
2010
2012
Q1
2014
Under Construction sq. ft.
Q3
2014
Net Absorption
2,900
2,500
2,100
1,700
1,300
900
500
100
(300)
(700)
(1,100)
(1,500)
(1,900)
(2,300)
Q4
Delivered sq. ft.
Vacancy Rate
15%
14%
13%
12%
11%
10%
9%
8%
7%
6%
2007 2008 2009 2010 2011 2012 2013 YTD
2014
Q3
Q2
Q1
Total Annual Net Absorption
Vacancy Rate
Charts Source: CBRE
14.10%
The global recession dramatically impacted new construction in Juárez.
There is currently construction underway in the north, west, central and south areas of the city. The improving economy and the reduction
of crime may be inducing confidence leading to new starts.
Vacancy rates appear moderate to slightly high for most areas of the city. The highest vacancies are occurring in Central and West Juárez.
The cost of industrial space is lower in the Borderplex than in other Mexico/U.S. border areas.
66
Infrastructure: Industrial - Juárez
Electricity & Water Rates
•Juárez electric rates are high for all three
categories
•Water and wastewater in the region are
competitive
Water and Waste
Water Rates
Electricity Rates (cents/kWh)
(dollars per 100
gallons)
Commercial Residential Industrial Water Waste
0.08
0.18
El Paso
10.57
11.48
8.41
Las
0.14
0.13
12.23
12.58
9.34
Cruces
0.19
0.16
McAllen
16.27
14.19
7.01
San
0.20
0.79
7.67
9.24
6.47
Antonio
0.01
0.01
Juárez
23.4
16.0-18.0
14.4
• Attractive Commercial natural gas
pricing
•Low industrial natural gas average for
Texas and residential rate for New Mexico
Texas
Average Annual Price of Natural Gas
(Dollars per Thousand Cubic Feet)
Residential
Commercial
Industrial
14.22
8.5
4.92
New Mexico
Louisiana
12.06
8.22
6.46
12.74
9.15
4.91
Arizona
U.S.
19.13
10.1
12.02
13.25
9.34
5.7
Sources:
EEI Typical Bills & Average Rates Report, Summer 2014 (for El Paso & Las Cruces electricity)
Juárez estimate calculated from CANACINTRA Juárez Homologacion de tarifas electrica
U.S. Energy Information Administration; Various City Water Departments
*Each benchmark city’s electricity rates are averaged by type by provider. For each city, one
main provider was chosen, except McAllen, for which a different industrial provider was
chosen.
67
Infrastructure: Transportation Network
El Paso Network
International Airport
Rail
Union Pacific
Burlington Northern (BNSF)
Highways/Roadways:
Airway Blvd
Lee Trevino
SH-20
Doniphan
Mesa
SH-178/ Artcraft
FM-76
Missouri
SP-16
George Diet
Montana
SP-601
Jeronimo
Paisano
US-54/ Patriot
Hawkins
LP-375
US-62
IH-10
Loop-478/ Dyer
US-80
IH-110
Resler
US-85
Joe Battle
SH-20
US-180
Kansas
Source: Texas Comptroller’s Office
Juárez Network
International Airport
Rail
Ferromex North Pacific
Union Pacific
Highways/Roadways:
IH-10
Mexico Federal Hwy 2
Mexico Federal Hwy 45
US-54/ Patriot Freeway
US-62
Las Cruces Network
Rail (nearby)
Southern Pacific (Santa Teresa)
Source:
Maquiladora
Association A.C.
2014
Highways/Roadways:
I-10
I-25
U.S. Route 70
68
Zaragoza
Infrastructure: Corridors
Known Commercial Corridors
El Paso
Juárez
Las Cruces
Mesa Street to the west
Paseo Triunfo de la República
Picacho Avenue from Valley Drive
to Motel Boulevard
Montana Avenue to the east
Centro histórico (Avenida 16 de Septiembre, calle
Mariscal, Avenida Vicente Guerrero, Avenida
Francisco Villa y Avenida de los Insurgentes)
La buena zona dorada de Juárez
Alameda Avenue to the valley
Zona Pronaf
Oregon Street
Avenida Gomez Morín
Five Points intersection (N. Piedras St., Pershing
Dr., Elm St.)
Plaza El Sendero
Doniphan
Zonas Las torres
ASARCO Area (A strategic communications link
that hosts: I-10, rail lines, energy corridors, the
Rio Grande, UTEP and three state lines)
Avenida Tomas Fernandez
Dyer Street to the northeast
Source: The Hunt Institute
69
Avenida de Mesilla from Main
Street west to the City limit
Valley Avenue
El Paseo Road from Missouri Ave
to Main Street
Main St. from Valley Ave. north to
I-25
Solano Dr. from Missouri Ave.
north to Main St.
Lohman Avenue from Main Street
east to Roadrunner Avenue
Telshor Avenue from Missouri
Avenue north to Del Rey
Boulevard
Infrastructure: Ports of Entry
International Entry Ports:
El Paso and Juárez share four inland port stations.
These stations make the area the second largest
international crossing area along the Mexico/U.S.
border, following Tijuana/San Diego.
Delays reported by businesses and residents of
the two cities are substantial and occur when
crossing from Juárez to El Paso. Some owners of
business trucking companies reported that it often
took more than two hours for a truck to pass
through a station, and sometimes much longer.
Business owners interviewed said that such time
delays made it difficult to compete with companies
that do not cross the border, and cost the
companies in wages and lost contracts.
The number of trucks passing through the
crossings decreased during the global recession,
but have since increased slightly. Train
transportation peaked during 2007, recovered
slightly in 2009 and has remained relatively
constant the last two years. The number of
personal vehicles crossing peaked in 2006, and did
not begin to significantly recover until this year,
indicating that fear of violence and the recession
had an impact on tourism.
Pedestrian traffic through the check-points has
been slowly declining since 2007 but may reflect an
increase in 2014, when a tax increase in Juárez
drove many shoppers into El Paso.
Trains
Trucks Crossing the Border
into El Paso
1,000,000
738,914
500,000
0
Personal Vehicles
20,000,000
3,000
2,500
2,000
1,500
1,000
500
0
Pedestrians
10,000,000
8,000,000
10.8
Million 6,000,000
4,000,000
2,000,000
0
15,000,000
10,000,000
5,000,000
0
1,357
6
Million
Source: Bureau of Transportation Statistics
“It is most important to make people understand
what is happening at the check points and
bridges. Understand and do something about it.”
-- Stakeholder Interview Participant
70
Infrastructure: Report Card
RANKING OF BORDERPLEX INFRASTRUCTURE FACTORS
Infrastructure Variable
•Bridges, Terminals
•Staff
Port of Entry Infrastructure
•Age
•Type
Housing Infrastructure
•Electric
•Water/Wastewater
•Natural Gas
Utilities
•Little public transit infrastructure
Public Transit
Air, Rail, Highway
Distribution Transportation
Commercial Corridors
Overall Infrastructure
71
Leading
Strong
Average
Weak
Stakeholder Surveys
What are the most significant challenges facing the
region? *
Available jobs
Results of Resident Stakeholder Survey
An online questionnaire, in both English and Spanish, was
answered by over 550 residents. The questionnaire put forward a
range of topics in order to help identify the salient issue that
residents of the North American Borderplex Region care about.
When asked about the most significant challenges facing the
region, respondents identified three key issue for the region. The
availability of jobs was the most cited challenge, followed by
“corruption/extortion” and “city/regional planning.” It is important
to note that, during stakeholder interviews with residents and
business owners in all three cities, their corruption concerns were
limited to activity within Juárez. Other significant challenges, and
the frequency in which they were chosen by respondents, is
displayed to the right.
In the Spanish language survey, much of the response to
identifying the assets of the region centered on opportunities for
work with many specifically citing the maquiladoras; though it
should be noted that more replies mentioned employment
opportunities in other industries. Other popular responses were
the people, cultural diversity, the proximity of the U.S., and city
diversions like shopping and park space.
51%
Corruption/extortion
43%
City/regional planning
41%
Safety and security
37%
Taxes
37%
Border crossings and inefficiencies
36%
Lack of government cooperation
35%
Employee compensation
31%
Small business and start-up suppport
29%
Language barriers
22%
Healthcare options
21%
Cost of living
20%
0%
10%
20%
30%
40%
50%
60%
*Survey respondents were asked to consider challenges that occur in any area within
the Borderplex region, rather than challenges related only to the city in which they
reside.
What type of employers would you like to see expand
or locate in the Borderplex?
Manufacturing
Aerospace and Defense
Hi-tech
Software Development
Entertainment
Tourism and Hospitality
Healthcare
Business and Professional Services
Creative Arts
Utilities and Energy
When asked how the region can make changes to grow a
sustainable economy, the majority of respondents commented
that investment in high-tech jobs should be made, infrastructure
to support manufacturers along the border corridor should be
built and maintained, enough affordable housing should be put in
place, students should be better equipped for the jobs in the
region, and entrepreneurship should be nurtured.
72
Response
Percent
46%
44%
40%
40%
39%
38%
34%
33%
31%
30%
Stakeholder Surveys
Results of Resident Stakeholder Survey
Factor
Available jobs
Quality of public schools
Safety and security
Presence of colleges/universities
Affordable healthcare
Employee compensation
Cost of living
Affordable housing options
Parks and resources for recreation
Regional transportation
Each respondent was asked to rate a number of factors by
the importance to them and their community, as well as
how they would rate their own community on that same
factor. Available jobs was the most important factor, but it
was given a relatively poor community rating. The quality
of public schools also had a high rating of importance, but
the community rating was, again, relatively low. On the
one to five scale, none of the top ten most important
factors rate above a 3.5.
A majority of the respondents identified “family ties” as
the main reason for living in the region. Others also made
note of the appealing quality of life in the region, in part
due to the many outdoor activities and beautiful mountain
ranges nearby.
Importance Community
(1-5)
Rating (1-5)
4.64
4.54
4.48
4.42
4.35
4.28
4.25
4.16
4.06
3.91
Has safety in the border area improved significantly
during the last three years?
When describing how to increase the quality of life in the
region, many respondents cited the goal of making their
city “greener.” Many called for increasing park space,
cleaning streets and highways, and reducing pollution. A
few respondents also suggested expanding local public
transportation could advance these measures for
sustainability.
No
36%
Yes
64%
To the question of safety, most respondents agree that
there has been significant improvements during the last
few years. The pie chart to the right shows the breakdown
of responses.
73
2.71
2.95
3.10
3.50
2.81
2.62
3.03
3.06
2.85
2.63
Stakeholder Surveys
What best describes the primary business
focus of your business?
Results of Business Stakeholder Survey
There were nearly 300 respondents to the business
stakeholder surveys. Like the resident surveys, this
questionnaire was also given in English and Spanish and
asked respondents to provide opinions on a number of
issues. Overall, most business respondents see the region
as being good for their business, with few saying
otherwise. Responses mainly came from the types of
businesses displayed in the table to the right.
Respondents to the Spanish surveys cited improvements
to the number, quality, and efficiency of international
crossings, as well as increasing investments in human
capital in order to attract more businesses to the region
More than half of respondents chose “community ties” as
a reason for the location of their business. Around a
quarter also indicated as an important criteria the quality
of life in the region and family business. This seems to
indicate that independent businesses were active in
survey response, and that maquilas did not dominate the
findings. Stakeholders, including maquila management,
have indicated the companies are not overly focused on
community activities. In general, social and business
environments in the region are supportive of one another,
and connections to community and culture is important .
Percentage of
Respondents
Professional Services
30%
Construction
16%
Financial or Insurance Services
15%
Manufacturing
13%
Information Technology
12%
Real Estate
11%
Educational Services and Products
11%
What are the primary reasons your business is located in
the region?
Community ties
Quality of life
Other
Business is in the family
Cost of doing business
Access to distribution networks and markets
Military
Proximity to the US
Proximity to colleges/universities
Work ethic/culture
Proximity to Mexico
Labor costs
Infrastructure
Trained and educated workers
Proximity to suppliers
Taxes
52%
26%
26%
25%
21%
15%
15%
14%
14%
14%
13%
13%
8%
8%
7%
4%
0%
74
20%
40%
60%
Stakeholder Surveys
As with the resident survey, business respondents were
asked to rate a number of factors in terms of importance
to their business and the community’s performance. Being
able to have access to customers was the most important
fact, with the ability to attract and retain skilled employees
coming in second. Only one of the factors, the quality of
public schools, rated above 3.5 in terms of community
performance. Business respondents may have
understood this factor differently from residents. They
may have attributed the quality of local universities to
the public school system, or have a different experience
of local high school graduates.
In Juárez, the most cited roadblocks to expansion in the
region were largely security concerns. However, nonsecurity concerns were largely related to unreliable labor,
accessibility of capital, and inefficient infrastructure.
Like the previous question, most respondents wanted to
bring providers that would aid the growth of the primary
manufacturing industries in the region. However, there
were some responses that wanted to bring in new types of
manufacture to the region, such as solar panels. Others
wanted to bring in more advanced technologies like fiber
optic cables and find ways to better integrate the region
into global supply chains.
Importance Community
(1-5)
Rating (1-5)
Factor
Results of Business Stakeholder Survey
Access to Customers
Ability to attract and retain skilled employees
Quality of Life
Tax Climate
Operating Costs
Quality of Public Schools
Security
Utilities and Infrastructure
Regulatory Environment
Entrepreneurial Environment
4.41
4.18
4.09
4.05
3.93
3.89
3.88
3.88
3.86
3.85
3.11
3.21
3.25
3.04
3.09
3.56
3.20
3.31
3.31
3.16
Over the next two years, do you anticipate expanding
your operations?
4%
Yes
No, not expanding
No, possibly selling or
closing
24%
72%
Next Steps: Opportunity for Change
Economic development reaches beyond any one program or
employer. It is a force that pushes, boosts, enables, and incentivizes
North American Borderplex citizens to improve and excel. It attracts
new residents and young families. Developing the business climate
with new employment centers and thriving industries will drive
dramatic, measureable improvements to many of the challenges
currently facing the community.
How will this happen? New employers bring jobs, salaries, involved
parents, active new neighbors, reinvestment in neighborhoods,
renovation of housing, preservation of historic sites, more watchful
eyes in neighborhoods, and paths to job advancement. Crime
recedes as surrounding areas attract reinvestment. Public education
improves as new families venture into underperforming school
areas and demand improvements. Residents who make more
money spend more. New job opportunities create contagious
opportunities.
In the next phase of this economic development strategic plan,
AngelouEconomics will identify high-potential industries for the
region through an analysis of cluster concentration, industry trends,
and regional assets. The industries and niches presented in the
Target Industry report will provide a strong balance for the region
between immediate opportunities for economic development and a
long-term goals for the region.
El Paso Chalk the Block Event by Brian Wancho
Next Steps: El Paso/Las Cruces Cluster Analysis
Source: Bureau of Labor Services
77
Next Steps: Juárez Cluster Analysis
The economy in Juárez is significantly impacted by a lack
of diversity in its industries. The manufacturing sector
will be broken into subsectors for further study within
the Target Industries Analysis.
Source: Instituto Mexicano del Seguro Social
78
TARGET INDUSTRIES: FOOD FOR THOUGHT
TARGET INDUSTRIES & NICHES
Defense
Industry
Testing
/Evaluation
Border/Cyber
Security/Bio
Terrorism
Tourism
Space Port /
Aeronautics
Tourism
Cultural /
Historical
Tourism
Life Sciences
Health IT
Destination
Tourism / Western
Theme Park
Maintenance &
Support Services
Medical Test /
Tissue Kits
Intermodal
Transport
Services
Vaccines /
Pharmacological
services
Food Sciences
& Processing
Freight Trucking
Clinical Trials
Medical Devices
Sensors /
Systems
Integration
Advanced
Logistics
Supply Chain
Management
Supply Chain
Analytics /
Services
Food Processing
& Organic Foods
Agricultural
Research &
Development
Entrepreneurial
Business
Services
Advanced
Manufacturing
Accounting / Data
Processing /
Finance Services
Automotive
Supply Chain
Management
Bio-Med
Software
Development &
Creative Design
Renewable Energy
/ Water
Technologies /
R&D
English / Spanish
Language Schools
Aerospace /
Defense Industry
Food Safety
On Line Education
Consumer
Products Mfg
Appendix
Table of Contents
Research Methodology…………………………………………………………………..
81
Quality of Life……………………………………………………………………….…………
82
Workforce & Education……………………………………………………………………. 89
Business Climate……………………………………………………………………………… 99
Infrastructure………………………………………………………………………………….. 104
Cluster Analysis……………………………………………………………………………….. 105
80
Research Methodology
To provide the best understanding of the complex nature of the North American Borderplex regional market, Angelou Economics
conducted both qualitative and quantitative research . Each provided a set of invaluable information that provides insight into
what drives the regional economy, the strengths the region has to draw upon and the challenges that will have to be overcome to
compete effectively in the global arena.
Our qualitative research process began during a stakeholder engagement site visit Aug. 14 – 25. During the visit, the AE team met
with more than 120 regional residents, business owners and managers and other stakeholders during private interviews and
focus groups. The meetings were conducted in locations in El Paso, Juárez and Las Cruces, offering participants easy access to the
process. Interviews with additional key stakeholders were conducted after the conclusion of the August site visit.
In October, an online survey was launched in both Spanish and English through the project website, offering stakeholders
throughout the region the opportunity to provide their insight into the quality of life in the area, the business environment and
hopes for economic development in the future. People took advantage of the opportunity – with 865 responses, 562 by residents
and 303 by regional businesses.
The core research that provides the backbone for this market assessment was conducted through the analysis of statistical
information provided by various governmental and public sources in both the U.S. and Mexico. Proprietary analytic databases and
analysis processes developed by AE were also utilized in the process.
The combined research process provides an excellent look inside the region through a formal study of demographics and face-toface communication with the people who live and work in the area every day. The perception of stakeholders of the area and
encompassing their specific desire for change in the future will be critical to the development of a successful strategic economic
development plan.
81
Race and Ethnicity (2013)
Average Household Size (2013)
100%
4
3.7
3.6
0.3%
1.7%
1.9%
90%
2.9
2.8
3.1%
16.9%
80%
3.1
3
1.3%
4.9%
54.4%
70%
2.6
12.3%
66.4%
60%
81.2%
90.9%
50%
2
2.1%
40%
6.2%
1.1%
1.5%
30%
1
62.8%
20%
1.0%
3.0%
35.4%
29.2%
10%
1.0%
0.4%
7.4%
13.5%
0%
0
El Paso
Las Cruces
McAllen
San
Antonio
Juárez
(2010
estimate)
El Paso
US
82
Las Cruces
McAllen
White (non Hispanic)
Black (non Hispanic)
Hispanic or Latino
Other
San Antonio
US
Asian (non Hispanic)
Population and Household Growth (20082013)
Population Growth
14%
12%
10%
Household growth in Las Cruces outpaces population
growth. This could be indicative of a more stable, less
transient population.
Household Growth
12%
12%
13%
11%
9%
8%
6%
6%
4%
2%
0%
El Paso/Las Cruces
McAllen
San Antonio
83
Quality of Life: Household Income
Median Annual Household Income
Annual Household Income
100%
4.8%
4.2%
3.6%
18.1%
18.4%
16.0%
80%
$60,000
7.7%
24.9%
9.2%
$51,486
$51,371
San Antonio
US
$50,000
24.3%
$40,345
60%
29.9%
32.2%
$40,000
28.8%
$33,761
33.5%
40%
$37,566
31.8%
$30,000
26.9%
$20,000
29.2%
26.3%
21.3%
20%
21.5%
$10,000
18.4%
18.4%
El Paso
Las Cruces
24.6%
12.7%
13.3%
San Antonio
US
$0
0%
McAllen
Less than $14,999
$15,000 to $34,999
$75,000 to $149,999
$150,000 or more
El Paso
$35,000 to $74,999
84
Las Cruces
McAllen
Median Rent (Monthly)
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
$828
$726
$884
$704
$621
U.S. Rent as a Percentage of Household
Income 35.0 percent or more 30.0 to 34.9 percent
El Paso Las Cruces McAllen
San
Antonio
US
Less than 15.0 percent
100%
90%
11.4%
80%
12.8%
70%
12.3%
60%
50%
12.8%
10.4%
7.2%
10.5%
13.0%
11.6%
9.1%
13.0%
12.0%
11.8%
11.9%
15.1%
12.2%
8.6%
9.5%
10.9%
13.5%
11.9%
8.6%
40%
12.5%
11.5%
8.9%
30%
20%
41.7%
47.3%
46.1%
El Paso
Las Cruces
McAllen
38.8%
43.1%
San
Antonio
US
10%
0%
85
Quality of Life: Housing Characteristics
U.S. Housing Values (2013)
100%
90%
1.8%
Average Juárez Housing Cost (per Sq. Meter)
1.4%
8.2%
4.0%
10.2%
14.8%
$11,000
$7,600
$814
$562
33.3%
Housing values along the border are
significantly lower than houses on average in the
U.S. Roughly 43 percent of homes in the U.S. are
worth $200,000 or more, compared to 27
percent in El Paso and Las Cruces.
43.2%
36.5%
50%
30.8%
40%
64.6%
30%
20%
City Center
Non Central
U.S. Dollars
26.0%
70%
60%
Pesos
Source: NUMBEO, based on .074 Mexico/U.S. Exchange Rate
24.0%
80%
Purchase Price
40.2%
35.6%
25.7%
10%
0%
McAllen MSA
San Antonio MSA
US
Less than $99,999
$100,000 to $199,999
$200,000 to $499,999
$500,000 or more
86
A 1,500 square foot home in the center of
Juárez would cost approximately $372,000;
while a house outside the city center would cost
an average $257,000, according to NUMBEO.
These value estimates appear high, and likely do
not accurately represent the entire Juárez
housing spectrum.
City Population Projections (2020-2030)
2,000,000
1,727,491
1,800,000
1,600,000
1,616,344
1,528,129
1,488,357
1,400,000
1,016,031
1,200,000
918,943
1,000,000
800,000
1,014,713
893,961
822,625
734,031
600,000
400,000
200,000
126,821
109,862
0
2020
El Paso
Juarez
2030
Las Cruces
McAllen/ Reynosa
Sources: Texas State Water Board; City of Las Cruces;
Secretaria de Gobernacion – Consejo Nacional de
Poblacion
87
Queretaro
San Antonio
Quality of Life: Sunshine Factor
U.S. Top Annual Average
Sunshine Cities
City
State
AVG Sunshine
Yuma
AZ
90%
Redding
CA
88%
Las Vegas
NV
85%
Phoenix
AZ
85%
Tucson
AZ
85%
El Paso
TX
84%
The region has a hot, arid climate with abundant sunshine and significant wind activity.
The area generally has 293 sunshine days per year with a high sun factor. El Paso is
considered one of the top 10 cities in the U.S. with the highest average amount of
annual sunshine. That makes the region a prime candidate for solar and wind renewable
energy industry expansion and the manufacturing of renewable energy parts and
materials.
The region has enough wind to sustain existing wind energy industries. El Paso
Electric’s Hueco Wind Ranch, 35 miles outside of El Paso, has two 660 kilowatt V-47
Vestas wind turbines that are expected to eventually generate 3,000,000 kWh of
electricity a year, enough to power approximately 500 average El Paso households.
Recognizing the potential for solar energy industries in the area, the city of El Paso has
offered solar incentives that attracted a number of solar energy companies. Las Cruces
also has numerous existing solar energy businesses. In April 2013, Fox Energy, a
subsidiary of Foxconn, contracted with Sun Edison to produce solar modules in Juárez.
88
Workforce & Education: Labor Force Changes
Year over Year Change in Labor Force (2005-Q1 2014)
6.0%
Changes in employment and the labor force in El Paso
have generally followed national trends: marked by a
steady climb before the economic downturn, then a
sharp drop followed by the recovery.
Las Cruces hewed to a flatter trajectory that saw it less
adversely impacted by the downturn but benefiting less
from the recovery.
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
Unemployment Rate (2004-2014)
2005
2006
2007
El Paso/Las Cruces
14%
2009
McAllen
2010
2011
2012
San Antonio
2013
Q1
2014
US Total
Source: Bureau of Labor Statistics; AngelouEconomics
12%
10%
9.5%
8%
7.5%
6.7%
6.4%
5.0%
6%
4%
2%
El Paso
Las Cruces
2008
McAllen
San Antonio
US Total
89
Workforce & Education: Employment Trends
Labor force participation rate in Ciudad Juárez
(2010)
In Labor Force
Economically Active Population by Employment
Status (Q2 2014)
Out of Labor Force
Employed
Informal sector
Unemployed
100%
80%
44%
60%
56%
40%
20%
0%
Chihuahua
Source: Instituto Municipal de Investigacion y Planeacion(IMIP) with data
from Censo de Poblacion y Vivienda 2010
Unemployment Rates (2005-2014)
Chihuahua
Querétaro (State)
Formal Sector Employment (1997-2011)
Querétaro
Juárez
12
500,000
10
400,000
8
Querétaro
300,000
6
200,000
4
2
100,000
0
0
90
Workforce & Education: Employment by Sector
Formal Employment by Sector (2014)
Employment by Sector (2013)
El Paso / Doña Ana
County
Percentage of
Total
4374
1.2%
Agriculture
0.0%
0.5%
4.6%
5.9%
3.2%
13.0%
4.0%
1.9%
2.6%
1.5%
3.5%
0.2%
6.8%
0.9%
14.6%
0.9%
10.2%
2.3%
Mining & Natural Resources
Other
165
1854
16228
20732
11161
45646
13982
6596
9061
5319
12317
654
23903
2992
51445
3010
35960
7988
20477
5.8%
Sector
Agriculture
Mining
Utilities
Construction
Manufacturing
Wholesale Trade
Retail Trade
Logistics
Information
Real Estate
Business Services
Management
Health Care
Sector
Share of
Total
Juárez
1,021
0.3%
30
0.01%
234,038
63.8%
10,581
2.9%
2,473
0.7%
Trade
40,194
11.0%
13,840
3.8%
Healthcare, Education, &
Community Services
42,979
11.7%
21,574
5.9%
Manufacturing
Construction
Utilities & Water
Total
366,730
Source: Instituto Mexicano del Seguro Social; AngelouEconomics
91
Workforce and Education: Education Levels
Degree Attainment (2013)
30%
US
87%
27%
San Antonio MSA
84%
16%
McAllen MSA
62%
22%
75%
0%
20%
40%
60%
80%
100%
Percent bachelor's degree or higher
High school achievement index (2011)
100
Percent high school graduate or higher
80
65.3
Source: Texas Education Agency; Doña Ana County Schools
60.1
60
40
20
0
Juarez
Queretaro
92
Workforce and Education: Research Focus
The primary R&D expenditures at NMSU are in engineering and
life science, with much of life science spending devoted to
agricultural science and the plurality of engineering dollars
devoted to aerospace which would fit its position as a land and
space-grant university. The third largest investment goes into the
physical sciences with chemistry and astronomy getting the most
research dollars in the phys. sciences department.
Academic R&D Expenditures in El Paso/Las Cruces
by Discipline (2013)
$24,528,000
Engineering
$3,861,000
Computer Science
Like NMSU, the primary research focus at UTEP is in engineering
and life science with engineering money being spread more
evenly between civil, electrical, and mechanical engineering.
While in the life sciences department, the largest recipient is
biological science.
Life Science
$54,461,000
$95,458,000
Physical Science
$5,925,000
$9,905,000
Academic R&D Expenditures at NMSU by Discipline
(2012)
Academic R&D Expenditures at UTEP by Discipline
(2012)
$6,800,000
$17,728,000
Engineering
$2,384,000
Engineering
Computer Science
Computer Science
$69,350,000
Life Science
Life Science
$36,500,000
$1,477,000
$17,961,000
$26,108,000
Physical Science
Physical Science
$1,478,000
$1,786,000
$4,447,000
93
$8,119,000
Sources: National Science Foundation; AngelouEconomics
Workforce & Education: Young Professionals
Median Age (2013)
38
40
35
34
32
29
30
25
26
25
20
15
10
5
0
El Paso/Las
Cruces
Juárez
McAllen
MSA
Querétaro San Antonio
MSA
US
Median Age (2000-2010)
Juárez
Querétaro
Chihuahua
30
25
23 23 23
21
Querétaro (State)
24 25 25 23
25 26 26 25
2005
2010
20
15
10
Sources: U.S. Census Bureau;
Instituto Nacional de Estadística y
Geografía
5
0
2000
94
Workforce & Education: Wages & Wage Growth
Average Weekly Wage Comparison
$1,100
$900
Wages in El Paso have risen slower than the national
average over the last 10 years, while Las Cruces’ have
kept pace. Both cities’ wages are now comparable to
each other though remain considerably lower than the
U.S. average.
$700
$500
$300
El Paso
Las Cruces
San Antonio
U.S.
McAllen
10-year Growth in Average Weekly Wage
40%
“Our community colleges need to be
more technical training and skills
training institutions rather than
feeders to universities.”
35%
30%
25%
20%
15%
10%
5%
0%
El Paso
Las Cruces
McAllen
San Antonio
U.S.
Source: Bureau of Labor Statistics; AngelouEconomics
95
Workforce and Education: Personal Income by Sector
El Paso County and Doña Ana County Per Capita Personal Income by Sector (2012)
Mining
Utilities
Wholesale Trade
Logistics
Manufacturing
Construction
Business Services
Information
Health Care
Management
Agriculture
Real Estate
Finance and insurance
Retail Trade
Other
$192,398
$104,705
$58,233
$53,598
$53,405
$48,760
$47,205
$46,756
$42,674
$35,032
$32,519
$29,524
$28,795
$28,790
$25,374
$25,324
$23,570
$17,791
$12,760
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Source: Bureau of Economic Analysis; AngelouEconomics
96
Workforce & Education: Jobs by Industry Sector
El Paso County and Doña Ana County Employment Growth by Sector (2008-2013)
Educational services
42%
Health Care
22%
12%
Management
9%
Utilities
6%
5%
5%
Business Services
Retail trade
Agriculture
2%
2%
1%
0%
Real Estate
Information
Logistics
Finance and insurance
-1%
-3%
-4%
-5%
-8%
-9%
-10%
Other
Arts and entertainment
Wholesale Trade
Manufacturing
Mining
Construction
-30%
-18%
-20%
-10%
97
0%
10%
20%
30%
40%
50%
Workforce & Education: Maquiladoras
Juárez Maquiladoras by Number of Workers (2012)
0-49
49
50-99
34
100-249
46
250-499
41
500-999
51
1,000-2,999
3,000+
44
10
Juárez Maquiladoras by Number of Workers (2012)
4%
0-49
18%
16%
50-99
100-249
12%
250-499
500-999
18%
1,000-2,999
17%
3,000+
15%
98
Business Climate: Local Tax Climate
Local Taxes
Benchmark
El Paso
Las Cruces
McAllen
San Antonio
Property Tax Paid (for a $100,000
valuation)*
Total Sales Tax Rate
$1,076
8.25%
$976
7.9375%
$1,014
8.25%
$873
8.25%
*Using county and city tax rates for Texas benchmarks and City of Las Cruces tax rate
99
Business Climate: Business Establishments
El Paso County and Doña Ana County Change in Establishments by Sector
Health Care
Business Services
Management
Agriculture
Retail Trade
2008 - 2013
Logistics
2012 - 2013
Utilities
Wholesale Trade
Real Estate
Information
Manufacturing
Other
Mining
Construction
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
100
Business Climate: Establishment Growth by Sector
El Paso County and Doña Ana County Change in Establishments by Sector
2008 - 2013
2012 - 2013
Health Care
Business Services
Management
Agriculture
Retail Trade
Logistics
Utilities
Wholesale Trade
Real Estate
Information
Manufacturing
Other
Mining
Construction
-15.0%
-10.0%
-5.0%
0.0%
101
5.0%
10.0%
15.0%
Business Climate: Business Growth
Regional Economic Development Organizations
Desarrollo Economico de Cd. Juárez
Private Sector Economic and Tourism Development
Office of the Secretary of Economic the State of Chihuahua
The state of Chihuahua has an office in Cd. Juárez
The city Juárez has an industrial Economic Development
Department
The City of El Paso has an Economic and Retail Development
Department
Cd. Juárez Industrial Development Department
City of El Paso Economic Development Department
County of El Paso Economic Development Department
Mesilla Valley Economic Development Alliance, MVEDA
The County of El Paso has an Economic Development Department
Economic Development for Doña Ana County NM. Las Cruces,
NM to Sunland Park, NM
City of Las Cruces Economic Development Office
City of Las Cruces Economic Development Department
Border Industrial Association
Economic Development for the Santa Teresa, NM Industrial Park
Borderplex Alliance
Regional Economic Development and Advocacy
102
Business Climate: GRP & FDI
Gross Regional Product (GRP), 2013
El Paso/Las Cruces
San Diego
Laredo
McAllen
Brownsville
San Antonio
Gross Domestic Product (GDP)
GRP (billions)
$33.9
$197.9
$8.0
$17.0
$8.6
$96.0
GDP (billions)
Chihuahua
$30.7
Baja California
$30.6
Querétaro
$22.5
Tamaulipas
$32.1
Sources: Bureau of Economic Analysis
Sources: Instituto Nacional de Estadística y Geografía
Foreign Direct Investment
Employment in Foreign-Owned Enterprises
FDI Share of Total Jobs
El Paso
18,540
8.6%
San Diego
48,730
4.8%
McAllen
8,373
4.5%
San Antonio
21,576
3.0%
Source: Brookings Institute
103
Infrastructure: Industrial Real Estate
Juárez Industrial
Source: CBRE Research, Q3 2014.
104
El Paso County Cluster Analysis
105
Doña Ana Cluster Analysis
106
About AngelouEconomics
AngelouEconomics partners with client communities and regions across the United States and abroad to candidly assess current economic
development realities and identify opportunities.
Our goal is to leverage the unique strengths of each region to provide new, strategic direction for economic development.
As a result, AngelouEconomics’ clients are able to diversify their economies, expand job opportunities and investment, foster entrepreneurial growth,
better prepare their workforce, and attract ‘new economy’ companies.
To learn more, visit www.angeloueconomics.com
Project Team
Angelos Angelou
Principal Executive Officer
William Mellor
Director of Project Operations
Dane Anderson
Project Manager
Yannis Gatsiounis
Associate Project Manager
Nicholas Samuel
Research Analyst
William Bean
Research Analyst
107

market assessment - The Borderplex Alliance

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