Sizing Up Texas’ Job Growth Under Rick Perry

Now that Texas Gov. Rick Perry is officially in the running for the Republican presidential nomination, journalists and econ bloggers from almost every national news outlet have examined the Texas’ economy in excruciating detail. The fact that Texas has produced nearly 40% of all new jobs in the US since 2009 has been regurgitated over and over again, and the state’s remarkable population spike has repeatedly been cited as a reason for the big employment growth.

But more than those shared story lines, writers have offered another strikingly similar theme in their Texas critiques: many have pointed to the wave of oil and gas jobs as the key driver of the state’s economic boom.

To be sure, energy employment is part of Texas’ growth, as EMSI highlighted in June. But it’s far from the biggest part. CNNMoney did a nice job laying out the super-sectors that have done well in the Lone Star State, and we’re going to drill down even further using EMSI’s detailed data to see which specific industries are fueling the state’s growth.

How Texas Stacks Up

It’s true that Texas has accounted for a large share of new jobs in the US, and that’s not just the case since 2009. Going back to 2001, Texas has added more than 2.1 million jobs, according to EMSI’s latest complete dataset, while the rest of the nation has combined for 6.2 million new jobs.

But Texas is a massive state, of course, with a population of more than 24 million. So to even the playing field, let’s look at percentage job growth.

As it turns out, there are only four states that have grown from 2001 to 2011 and from 2009 to 2011.

Like Texas, Wyoming and Utah have also had 18% growth since 2001, but no state has performed better since 2009 than North Dakota. Its employment base has grown 5% in the last two years, compared to 2% for Texas. But because North Dakota has a much smaller population — and workforce — than Texas, its growth typically doesn’t get mentioned in discussions like these.

Energy is a Big Player — But Not the Biggest One

Oil and gas extraction employment in Texas has more than doubled in the last 10 years, and support industries for drilling have also boomed. Altogether, the mining, quarrying, and oil and gas extraction sector has jumped from over 230,000 jobs in 2001 to just under 490,000 in 2011.

But that’s only a fraction of the 14.2 million jobs in the state, and the oil and gas growth accounts for slightly more than 10% of all new jobs in the state since 2001.

What have been the biggest job gainers? Health care and social assistance (421,000-plus) and government (nearly 282,000) have made the largest additions to their payrolls in the last decade. It should be noted, however, that government jobs have declined in the last year — and were growing stagnant before then.

Yet once you extract federal government jobs, it’s clear that state and local government employment is doing considerably better in Texas than other states. Texas is one of 10 states that have seen increases in state and local government jobs since 2009, and its growth (29,287) is nearly nine times that of the state with the second-most growth, Kentucky (3,327).

These numbers don’t exactly bolster Perry’s small-government agenda claims.

State and Local Government Job Change (2009-11)

In terms of detailed sub-sectors, temporary health services, crude petroleum/natural gas extraction, and home health services have been the strongest performers in Texas since 2009. Overall, 19 industries have added at least 5,000 jobs since ’09, of which electric power distribution has had by far the largest percent growth (111%).

NAICS Code Description 2009 Jobs 2011 Jobs Change % Change
561320 Temporary Help Services 171,096 204,456 33,360 19%
211111 Crude Petroleum and Natural Gas Extraction 290,638 317,388 26,750 9%
621610 Home Health Care Services 240,018 263,099 23,081 10%
930000 Local government 1,240,713 1,261,970 21,257 2%
213112 Support Activities for Oil and Gas Operations 89,179 108,765 19,586 22%
221122 Electric Power Distribution 11,840 25,038 13,198 111%
722110 Full-Service Restaurants 371,893 385,081 13,188 4%
814110 Private Households 113,106 125,148 12,042 11%
621111 Offices of Physicians (except Mental Health Specialists) 198,795 210,077 11,282 6%
622110 General Medical and Surgical Hospitals 265,013 274,810 9,797 4%
920000 State government 354,190 362,219 8,029 2%
551114 Corporate, Subsidiary, and Regional Managing Offices 90,157 98,159 8,002 9%
213111 Drilling Oil and Gas Wells 34,826 42,562 7,736 22%
425120 Wholesale Trade Agents and Brokers 58,575 64,461 5,886 10%
452112 Discount Department Stores 63,272 69,137 5,865 9%
561720 Janitorial Services 152,316 157,919 5,603 4%
623110 Nursing Care Facilities 99,246 104,651 5,405 5%
561110 Office Administrative Services 88,376 93,599 5,223 6%
522110 Commercial Banking 112,482 117,698 5,216 5%

Key Regional Industries

We also looked at the most concentrated industries in Texas, as compared to national employment concentration, to see which industries are unique to the state and tend to be export-oriented. Oil and gas extraction — and the production of equipment for extraction — figure prominently among this group of industries.

Crude petroleum/natural gas extraction is more than 4.5 times more concentrated in Texas than the nation, and it accounts for more than 300,000 jobs. Other industries with high LQs and large employment bases: support activities for oil and gas operations; engineering services; and office administrative services.

For more on Texas’ economy, be sure to read Tyler Cowen’s post at Marginal Revolution. And for more on Texas’ growth, check out this piece on the top cities in the US.

Illustration by Mark Beauchamp