McALLEN, RGV – The more people that live in Cameron County and commute for work in Hidalgo County, or vice versa, the sooner the Census Bureau will designate the Rio Grande Valley as one unified Metropolitan Statistical Area.
This is the view of Roberto A. Coronado, assistant vice president in charge and senior economist with the Federal Reserve Bank of Dallas, El Paso Branch.
“There is a formula that is applied to find the trigger point on when a community or area will be added to an MSA and it is typically arrived at by measuring the number of commuters,” Coronado said.
“This is evaluated every ten years by the Census Bureau. Once they have done the population census, they know where you live and where you work and if you commute. If you reach a percentage of your population that commutes that is when you are merged into an MSA.”
Asked if amalgamating MSAs is therefore automatic, once a certain percentage of the population commutes between two MSAs, Coronado said: “Exactly. It is a technical definition. Once you have reached the threshold of commuters you will have to be one MSA and it depends in which direction the commuters go as to whether it will be McAllen-Brownsville or Brownsville-McAllen.”
Coronado said there are advantages to merging MSAs.
“Assuming you are there I think there is value in a number of different aspects. Once you are a larger community, you typically pop up on a number of different maps. So, if you are a corporation and you want to establish somewhere and you look into McAllen and you say, well it is 800,000 people. If you look into Brownsville it is X number of people. Once McAllen and Brownsville are together the united MSA perhaps equals one and a half million people. Well, suddenly, you are not as small as you thought. You start showing up in a number of different maps. The larger you are the more likely you are to get somebody’s attention.”
The larger the MSA, the more funding is appropriated, Coronado said.
“From a funding perspective, a lot of the funding that happens from state and federal government is to some extent linked to population. And so, perhaps, you will be able to draw down more resources.”
However, there are, potentially, some disadvantages too, Coronado said. “If you really want to preserve both regions’ identity that is going to be a challenge.”
Discussions about an international MSA
Coronado is based in El Paso. He said the issue of merging MSAs comes up from time to time in his city.
“I can tell you in El Paso, from time to time, we have conversations about merging MSAs with Las Cruces, New Mexico. I can see how the conversation sometimes gets agitated because you want to preserve your region’s identity, right? We are not a united MSA in El Paso yet but the commuter trends keep going up and so eventually, I think it is just a matter of time. But, when I do not know. It is hard to predict.”
Some economic development leaders in the Valley would like to see an international MSA, one that would link McAllen with Reynosa, for example, or Brownsville with Matamoros. Asked if he had ever heard of an international MSA, Coronado said: “Not that I am aware of. There is not one along the U.S.-Mexico border region, nor the Canada-U.S. region. Maybe there is one Europe, I am not sure. I am not familiar.”
Coronado said the issue of setting up an international MSA gets aired in El Paso also.
“A lot of folks in El Paso, I can tell you, are arguing and pursuing that we should be a Juárez-El Paso-Las Cruces MSA, or whatever combination from those three communities you want. Once you do that, where I am from, we quickly grow to three million people. We call it the El Paso del Norte region. It is three million people. All of a sudden the people in Chicago are saying, well, I thought El Paso was 800,000. Yes, that is true but when you put Juárez and Las Cruces in there we are a much larger community. You begin raising peoples’ eyebrows. That should provide opportunities.”
Coronado made his remarks about MSAs in an exclusive interview with the Rio Grande Guardian at the end of a presentation he made at the McAllen Country Club. The presentation was about economic trends in the Rio Grande Valley. He made his presentation at an event called the Border Economic Development & Entrepreneurship Symposium. It was hosted jointly by the Federal Reserve Bank of Dallas, UT-Rio Grande Valley and the McAllen Chamber of Commerce.
At the end of the event, McAllen Chamber President Steve Ahlenius joked that his takeaway from presentations made by the Federal Reserve Bank of Dallas was that everything in the Rio Grande Valley is going great.
“This was great information,” Ahlenius said. “I am going to walk away from this, and this is not for their knowledge, but I am going to say that the Federal Reserve says everything is great here. Please spread the word. Use the information wisely,” Ahlenius told the audience in his closing remarks.
RGV is growing fast but has challenges
The presentations by economists with the Federal Reserve Bank of Dallas were not all positive, however. Yes, the Valley is providing most of the growth along the Texas-Mexico border but, economists said, educational attainment is still not good, there is a large digital divide that is hurting economic development, and net trade is down over the last year.
The digital divide issue was addressed by Jordana Barton, senior advisor for community development at the Federal Reserve Bank of Dallas. The presentation was titled “Closing the Digital Divide in the RGV: Why Digital Equity is Vital for a Strong Economy.”
(Editor’s Note: We will post a story on Jordana Barton’s presentation in our next edition.)
The issue of educational attainment and trade flows was addressed by Coronado in a presentation titled “Rio Grande Valley Economic Outlook: Trade and Human Capital in the Spotlight.”
Among the positives Coronado referenced was population growth. He said that since 1990 the Texas-Mexico border region has added one million people. Of this, 450,000 people were added in the McAllen MSA and 160,000 people in the Brownsville MSA. “That means a population growth of 610,000 in the Valley over the past 25 years. That tells you amount of growth that the RGV has had. Sixty five percent of the growth along the border has been in the Rio Grande Valley. On the surface it looks phenomenal because you really want a vibrant, growing, economy. But on the other side of the coin that brings a lot of challenges,” Coronado said.
One of the biggest challenges, Coronado said, is the field of education. If one combines the MSAs of McAllen and Brownsville, Coronado said, 31 percent of the workforce has less than a high school diploma. “Only one in eight in the Rio Grande Valley has a Bachelor’s degree. That presents a big challenge. However, you could look at it this way. In spite of adding half a million people you still managed to keep up with educational attainment,” Coronado said.
The trade flows issue was troubling, Coronado said, because he does not know what is causing it. Asked about the issue afterwards, Coronado told the Rio Grande Guardian:
“If you look at trade flows, imports and exports that cross through the Rio Grande Valley, both McAllen and Brownsville MSAs, all the ports of entry, we see that total trade was growing probably until the summer of last year. That is when we saw them peaking and then trending downwards since then. And the question is why. Why is total trade flows through the Rio Grande Valley slowing down? We looked into it in more detail to see if there is one sector that is dragging everything else down and what we saw is that pretty much all the sectors are in red. So, the decline is broad. The question is why and I am not sure I have an answer. To be honest, it is a puzzle to me. I do not have a solid answer to it. I am sure someone here might know. If you talk to someone in transportation, someone in customs brokerage, they will probably have seen a slowdown in activity and they might know why.”