Texas Region Site of Lowest Per Capita Income in U.S. : Poorest Area a Mix of Economic Boom, Bust

McALLEN, Tex.--Eighteen-wheelers filled with electronic goods and auto parts rumble out of one of the nation’s busiest foreign trade zones and on past high-production farms.

They roll past shiny aluminum trailer parks for retirees who pump millions into the economy, past a busy mall and middle-class neighborhoods.

Welcome to the nation’s poorest metropolitan area.

The lowest per capita income of the 318 U.S. metropolitan areas in 1987--$7,001--was in McAllen-Edinburg-Mission in the Lower Rio Grande Valley, where a boom is taking place amid rural slums where thousands live in squalor.

Health Program Ceases

There are other measures of Hidalgo County’s poverty: It has the state’s highest unemployment rate, and in March, it shut down its indigent health care program when it ran out of money halfway through the fiscal year.

But local promoters say the gloomy statistics are misleading.

“We are a thriving little town,” said Leonel Garza, president of the McAllen Board of Realtors Inc. “I keep hearing we’re full of poverty. I don’t know how they figure it.”

New industries, especially the border plants, maquiladoras, are drawing so many people that housing values are on the rise. Garza’s group in a May survey found only three houses available for rent in the city.

More than $1 billion in goods a year pass through the foreign trade zone, which has had to turn away tenants since its warehouses filled up last year.

Hidalgo County also is the No. 1 destination for 80,000 “winter Texans,” retirees who spent about $161 million last year in southern Texas.

Retail Sales Grow

And retail sales in the area grew 22.6% last year--faster than any other part of the state.

Those statistics also mislead, said economist J. Michael Patrick, director of the Center for Entrepreneurship and Economic Development at Pan American University in Edinburg. “Just because we see a lot of activity in McAllen doesn’t mean it’s being translated to the population in a broad sense.”

The broader population he refers to is found largely in the rural colonias, where developers have sold tiny homesites without water, sewers or paved roads for as little as $100 down. A 1986 study for the Texas Water Development Board found 52,000 people in 366 colonias in Hidalgo County, population 375,000.

This time of year, many colonia residents are boarding up their houses to travel north to harvest crops, continuing a cycle of subsistence living.

“We have to get away from migrant work so there will be stability in the families, so our children will have a full school year, not half a year,” said Carmen Anaya, who for 39 years has lived south of Pharr in a colonia known as Las Milpas.

Water Funds Approved

The majority of colonia residents are U.S. citizens, said Anaya, who through Valley Interfaith, a coalition of churches, won legislative approval this session of a $100-million appropriation for colonia water and sewer installations. The bill was signed into law by Gov. Bill Clements.

“Nobody has sewer service here,” said Herlinda Hernandez, 65, who lives with her husband in a cinder-block house in a colonia west of Mission. Her daughter and grandchildren live in a plywood home in the front of the same small lot on a street paved with clay.

Hernandez has running water and a septic tank, but fears that her grandchildren are exposed to chemicals from the crop-dusting planes that spray a cornfield behind her house.

A neighbor down the street uses an antique wringer washing machine, while children play in the dusty street.

Many colonia residents have outhouses that overflow on rainy days. Even when equipped with septic tanks, many yards end up with contaminated soil due to poor drainage and lots too small to absorb the waste.

Causes Disease

That leads to hepatitis, intestinal parasites and typhoid, said Sister Christine Stephens, chief organizer for Valley Interfaith. “They live on top of open sewers a lot of the time.”

The working poor who have no health insurance and make too much for public health care simply go without, resulting in undetected cases of diabetes and high blood pressure, Stephens said.

Like most border areas, prosperity in Hidalgo County is tied to the maquiladoras, where U.S. products are assembled by Mexican workers making about $1 an hour. The number of maquiladoras in Reynosa, Mexico, across from McAllen, increased from 36 to 51 between November, 1987, and November, 1988, and added more than 5,000 new employees, according to the McAllen Economic Development Corp.

Yet the county in April had Texas’ worst unemployment rate--16.7%--more than double the state average of 7% and a point higher than the year before, according to the Texas Employment Commission.

Cites High Birthrate

The growing unemployment in the face of an industrial boom is primarily due to a high birthrate and an influx of people into Hidalgo County, said David Ruelas, Employment Commission labor market analyst in McAllen.

To bridge the gap, the McAllen Economic Development Corp. is trying to attract maquiladora suppliers, companies that would provide highly paid jobs for skilled labor, said President Mike Allen.

But many local communities have high school dropout rates of more than 50% and a shortage of people with industrial experience. That makes it hard to persuade companies that they can find people to fill skilled positions in plastic injection molding and tool-and-die operations, and most continue to send the supply orders north to traditionally industrial parts of the United States.