El Paso: Economy

El Paso: Economy

Major Industries and Commercial Activity

More than 70 Fortune 500 companies call El Paso their home, including Hoover, Eureka, Boeing, and Delphi.

El Paso is an important entry point to the U.S. from Mexico. Once a major copper refining area, chief manufacturing industries in El Paso now include food production, clothing, construction materials, electronic and medical equipment, and plastics. Cotton, fruit, vegetables, livestock, and pecans are produced in the area. With El Paso's attractive climate and natural beauty, tourism has become a booming industry as well as trade with neighboring Ciudad Juárez.

Education is also a driving force in El Paso's economy. El Paso's three large school districts are among the largest employers in the area, employing more than 19,000 people between them. The University of Texas at El Paso (UTEP) has an annual budget of nearly $250 million and employs nearly 3,600 people. A 2002 study by the university's Institute for Policy and Economic Development stated that the University's impact on local businesses has resulted in $349 million.

The military installation of Fort Bliss is a major contributor to El Paso's economy. Fort Bliss began as a Calvary post in 1848. Today, Fort Bliss is the site of the United States Army's Air Defense Center and produces approximately $80 million in products and services annually, with about $60 million of those products and services purchased locally. Fort Bliss' total economic impact on the area has been estimated at more than $1 billion, with 12,000 soldiers currently stationed at the Fort. A February 2005 article in the El Paso Times stated that as many as 20,000 troops could be arriving at Fort Bliss pending the Defense Department's removal of thousands of troops from overseas assignments. This would be in addition to 3,800 soldiers who would arrive as part of a new brigade combat team stationed at the Fort. The growth is expected to create a strong economic ripple throughout the El Paso area.

In addition to the military, the federal government has a strong presence in El Paso to manage its status and unique issues as a border region. The Immigration and Naturalization Service (INS), the Drug Enforcement Agency (DEA), and the U.S. Customs Service all have agency operations in El Paso to regulate traffic and goods through ports of entry from Mexico. Including these agencies, government job growth in the area is expected to rise to 64,390 jobs by 2007.

Call center operations make up 7 of the top 10 business employers in El Paso. With no signs of growth slowing in this industry, in 2005 the 14 largest call centers in El Paso employed more than 10,000 people. The largest of these in terms of employees are EchoStar, MCI/GC Services, and West Telemarketing.

Analysts in the area say that job growth in 2005 will be in the form of health care, business and trade services, international trade, and telecommunications.

Items and goods produced: petroleum, metals, medical devices, plastics, machinery, automotive parts, food, defense-related goods, tourism, boots

Incentive Programs—New and Existing Companies

El Paso's economy is impacted significantly by the Mexican government's Maquiladora Program. Established in 1965, the program was created to help alleviate unemployment on the U.S.–Mexico border by allowing non-Mexican companies to establish manufacturing operations in Mexico to produce goods for exportation. El Paso's sister city Ciudad Juárez has more than 300 such plants employing approximately 195,000 workers, many of them El Paso residents. More than 70 of the maquiladora plants established in Ciudad Juárez are owned by Fortune 500 companies operating in telecommunications, manufacturing of medical supplies, consumer appliances, electronics, and automotive parts.

The Texas Workforce Commission (TWC) provides assistance to new companies in screening and pre-qualifying applicants for employment to the client's specifications. TWC is also the agency for the Federal Targeted Job Tax Credits Program. The state of Texas targets many of its incentive programs toward smaller and rural communities.

Local programs

The City of El Paso gives consideration for tax abatements for projects within specified Strategic Redevelopment Zones. The Tax Abatement Policy is organized to stimulate capital investment needed for residential, retail, commercial, and industrial redevelopment within the zones.

State programs

Texas is a right-to-work state. The Texas Enterprise Zone Programs offer tax abatement at the local level, and refunds of state sales and use taxes under certain circumstances to businesses operating in enterprise zone areas. Parts of El Paso benefit from the state's designation as Foreign Trade Zone #68. The state of Texas targets many of its incentive programs toward smaller and rural communities.

El Paso is a designated United States Department of Housing and Urban Development Empowerment Zone, which provides special tax incentives and bond provisions to encourage private investment in housing development. El Paso was the only city in Texas to receive this type of designation. The Enterprise Business program and the Micro-Loan program both assist new businesses with start-up funding.

Job training programs

The Greater El Paso Chamber Foundation and a coalition of El Paso workforce development agencies partnered to develop The Center for Work-force Preparedness. The Center houses several agencies and projects, and helps custom-train workers for local businesses. The Upper Rio Grande @ Work organization provides help with recruitment, job fairs, locating tax incentive programs, researching labor and employment laws, labor market details, and other services.

On-the-Job Training allows participants to work for an employer, receive payment, and develop the skills necessary to continue working. The program provides reimbursement to the employer for up to half of the wages paid for a maximum of three months.

The Texas Workforce Commission administers the Skills Development Fund, which helps Texas community and technical colleges finance customized job-training programs for local businesses. Qualifying companies are allowed up to $1,000 per trainee.

The Advanced Technology Center at El Paso Community College provides workforce training for local industry. The College also administers programs through the Workforce Development Center, the Career Training Center, and other centers throughout its four campuses.

Development Projects

The city of El Paso has been involved in extensive improvement projects since 2000, when a plan for specific "Quality of Life Capital Improvements" was approved to span a 10-year period. New zoo facilities were completed, and still underway are plans for a new $6.65 million History Museum building (construction began in 2004), and improvements to city parks and libraries. As part of that initiative, the city's 5-year plan for capital improvements begins in 2005 and includes specific projects such as new fire stations, additional library branches, new animal care facilities, new parks and recreation facilities, further renovations and improvements to the zoo, street improvements, airport improvements, and public transportation improvements. At the end of 2009, projected spending for the 5-year improvement plan is a massive $440,924,631.

Developments completed in 2004 included a new $27.4 million, 110,000 square foot wing at Thomason Hospital. The wing generated an additional 100 high-paying jobs and expanded the number of critical care beds at the hospital from 18 to 30. The new unit includes an ambulatory surgery unit, an emergency department observation unit, a critical care unit, and a new labor and delivery unit. After $9 million in renovations, the 60-year-old El Paso County Coliseum is bringing in record revenues; additional seats and new air conditioning were part of the renovations.

Underway in 2005 were plans for a new golf course, federal courthouse, and restoration of a historic theatre. Slated for finish in 2006, the tentatively-named The Dunes at Butterfield Trail golf course will be a high-end course, designed by renowned golf course designer Tom Fazio. To be built near the airport, the course and its 8,800 square foot clubhouse will cost $11 million. Construction is expected to start in 2005 on the new downtown courthouse, with a budget of $63.4 million. The 8-story, 235,000 square foot courthouse will be built on two city blocks. Plans to restore the city's historic Plaza Theatre, at a cost of $25 million, began in 2005. An adjacent building will become the theatre's annex and will be converted into a restaurant on the first floor and a performing arts center, seating about 195 people, on the second floor.

Construction projects to the tune of $50 million were underway in 2005 at University of Texas at El Paso, including a new academic services building, biosciences building, a softball complex, an expansion of the engineering building, and a new research and business development complex. Projects in the planning stages in early 2005 include a new 5-level garage.

Economic Development Information: City of El Paso Department of Economic Development, 2 Civic Center Plaza, El Paso, TX 79901; telephone (915)533-4284; fax (915)541-1316

Commercial Shipping

According to the U.S. Department of Transportation, El Paso is the nation's "fifth busiest land border gateway by value for imports and exports transported across the border by highways, railroads, and pipelines." In 2003, $39 billion in merchandise trade passed through El Paso. Trucks carry most of the freight passing through the city, followed by rail. The Union Pacific Railway provides intermodal and other services to Los Angeles, Chicago, and Dallas. The Burlington Northern Santa Fe Railroad also travels to Los Angeles and Chicago. El Paso's position as an international gateway means it is a major thoroughfare for imports and exports.

Labor Force and Employment Outlook

In 1994, half of El Paso's 50,000 manufacturing jobs were in the apparel and textile industry. Due to the devaluation of the Mexican peso in 1994, several large apparel manufacturers relocated over the border to Mexico, taking jobs with them. Growth in other areas have made up for this decline, however, as El Paso's job growth continues to rise after a rocky beginning to the 21st century. Still, El Paso's unemployment rate remains higher than the national average.

El Paso's labor force has shown a steady growth over the past decade. International trade in the region, stimulated by the North American Free Trade Act (NAFTA) and the Mexican Maquiladora Program, has helped to ensure El Paso's success in the global economy. Jobs in globalization and information technology are helping to revitalize the area economy after its past dependency on ever-reducing manufacturing jobs. A 2002 study estimated that local employment for the El Paso MSA was expected to grow to 278,056 by 2006, or a compound annual growth rate of 1.52 percent over that 5-year period.

The following is a summary of data regarding the El Paso metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 254,900

Number of workers employed in . . .

construction and mining: 11,900

manufacturing: 26,500

trade, transportation and utilities: 55,000

information: 5,400

financial activities: 12,000

professional and business services: 25,000

educational and health services: 28,600

leisure and hospitality: 23,500

other services: 7,500

government: 59,500

Average hourly earnings of production workers employed in manufacturing: $13.98 (statewide)

Unemployment rate: 7.7% (December 2004)

Largest county employers	Number of employees
El Paso Independent School District	8,663
Fort Bliss (civilian employees)	6,803
Ysleta Independent School District	6,500
City of El Paso	6,264
University of Texas at El Paso	4,871
Socorro Independent School District	3,995
Sierra Providence Health Network	3,761
El Paso Community College	3,728
Wal-Mart	3,706
County of El Paso	2,700
Las Palmas and Del Sol Regional Health Care System	2,244
Echostar Satellite Corp.	2,012

Cost of Living

El Paso's cost of living, as well as its housing prices, are slightly below the national average.

The following is a summary of data regarding several key cost of living factors for the El Paso area.

2004 (3rd Quarter) ACCRA Average House Price: $205,450

2004 (3rd Quarter) ACCRA Cost of Living Index: 90.6%

State income tax rate: none

State sales tax rate: 6.25%

Local income tax rate: none

Local sales tax rate: 1.0% (city) and .5% (county)

Property tax rate: $.719833 per $100 assessed value (2002) (City of El Paso only)

Economic Information: Office of Economic Development, City of El Paso, 2 Civic Center Plaza, 1st Floor, El Paso, TX 79901; telephone (915)533-4284; fax (915)541-1316