Austin bracing for ripple effect in local job market after SXSW canceled

SXSW

AUSTIN (KXAN) — The impact of canceling South by Southwest could lead to a ripple effect felt in Austin’s economy for a while — that’s the message industries affected and workers laid off want others to hear.

“We typically talk about our work in terms of feast or famine,” said Rachel Magee, who’s the president of the International Alliance of Theatrical Stage Employees Local 205. “South by is a feast, which helps carry us through the months of famine.”

Magee says without that feast, technicians and workers who had jobs lined up to set up and tear down for SXSW are collectively losing more than $131,000 in wages and another $26,600 in benefits.

“The income that I’ve lost, I was either going to use to help pay for the tuition for my daughter who’s at college, or I could have used it to purchase three months’ health insurance premiums to help cover our family,” Magee said.

Magee says now, she and other workers in her situation will have an even harder time making it through the slow summer months.

On Tuesday, Austin Mayor Steve Adler urged workers and struggling employers to utilize a non-profit that partners with the city called Workforce Solutions Capital Area.

The non-profit has three offices across the city and offers programs for both employers and people who’ve been laid off or have lost work.

“There are ways we can come in and provide assistance with wage support, for example, kind of a shared work plan,” said Workforce Solutions Capital Area CEO Tamara Atkinson. “So, the employer would keep the employee on their payrolls, and we could help offset a portion of those wages for a period of time, in exchange for the worker not being laid off.”

Atkinson says Workforce Solutions can also provide incumbent worker training funds to help employees gain the skills needed to move up within their current companies.

Workforce Solutions also helps individuals find new jobs and navigate the application process.

“As of this morning, we looked in our database — there are over 31,700 job openings in creative arts entertainment and in tourism and hospitality,” Atkinson said.

Workforce Solutions is prepping for an influx of people using its services following the SXSW cancellation.

In addition, the non-profit also offers scholarships for people wanting to further their careers with a certificate or associate’s degree.

Atkinson says she never wants to see people going through layoffs or economic downturns, however, “Many times, we’ve seen that as people go through the process, as hard as it is on them, they come out the other side with a better opportunity or with a different opportunity that they wouldn’t have thought about or availed themselves of, if it hadn’t been for an unfortunate circumstance.”

Workforce Solutions is partnering with Visit Austin to host a special job fair for people specifically in the hospitality industry. It will be on March 24 from 10 a.m. to 2 p.m. at the Palmer Events Center.

Workforce Solutions tells us it has also reached out to South by Southwest following the announcement that it laid off a third of its staff, yesterday.

The non-profit says it’s offered services to help affected employees and provide an aversion program to help keep SXSW from laying off any further employees.

What’s been the financial fallout in Austin?

Austin Business Journal Editor Colin Pope says that last year’s festival amounted to about $350 million to the local economy.

“There is a big question still about how much of that we’ll miss out on but we won’t miss out on all of it. Not all parties are canceled,” says Pope. “Right now businesses across town have set up war rooms to figure this out. Maybe they can still cancel the hotel rooms they booked, but perhaps they’re on the hook for the flowers, tables, chairs and DJ they planned to have at their party.”

Pope says that not many people stand to benefit from the cancellation, although more suburban, outside-of-downtown businesses may stand to have more customers with SXSW off the table.

“To be honest, SXSW week is slow for some places on the periphery because not a lot of Austinites care to get out during a bustling SXSW week. More Austinites may be inclined to get out this year, knowing the international crowds won’t be clogging up the streets and shops and restaurants.”

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