What Does Rick Perry Have To Do With Texas' Success?


You don’t have to like Rick Perry or his sometimes scary neo-confederate politics to admire what has been happening in Texas over the past decade. Rather than trashing the state in order to demean its governor, perhaps the mainstream media should be thinking about what the Lone Star’s success story means for the rest of the country.

Texas has done what most of other states — notably the blue coastal ones — have failed to do: create jobs. Over the past decade Texas has created 2.1 million jobs — while New York, California, Massachusetts and Illinois have all lost jobs.

Its relative performance since 2009 has been even more stellar, producing nearly 40% of all new jobs in the U.S. Its unemployment rate stands at 8.2, well below the national average of 9.1 — an outstanding feat given the fact that the state grew 20%, twice the national average, over the decade. Texas is creating jobs for a growing workforce, while other states like New York or Massachusetts struggle to keep up with stagnant or even declining ones.

Some self-proclaimed progressives like Paul Krugman attribute Texas’ success to population growth and the attraction of low-wage jobs for rapacious employers.

“It is interesting how, suddenly, not having a job is better than working at a low-paying one,” notes architect and developer Tim Cisneros. True, many of the new jobs in Texas, as elsewhere, pay low wages and do not offer health benefits. But, says Cisneros, insisting that all the new jobs in Texas are low-paying is just not credible. “When you see the new hospitals and the new headquarters being built by Exxon here in Houston you can see there are lots of different opportunities,” Cisneros says.

As Cisneros points out, people are not flocking to Texas for the privilege of being exploited any more than they come for the 100 degree summer heat. Many — and not only low-skilled campesinos — come for opportunities, including well-paying ones, that are not as readily available elsewhere.

According to research conducted by the Praxis Strategy group, Texas has boosted mid-skill jobs — those that require two years or more of post-secondary education — by 16% in the past decade, That’s the third-highest rate in the nation (after much smaller Wyoming and Utah) and three times the national average. In contrast, New York has grown such positions by less than 5%, while California and Massachusetts have expanded them by less than 2%. Illinois, President Barack Obama’s home turf, was among the few states to actually lose mid-skill jobs.

This pattern also applies to the high-tech and science-based industries. Over the past decade Texas’ number of STEM (science, technology, engineering and math-related) jobs has surged by 11%, one of the fastest rates among the states and four times the national average. California, Massachusetts and Illinois all lost positions in these fields.

Another reason people go to Texas is their wages get them more there than in the big blue metros. For example, houses in Dallas, Austin or Houston cost three times the median income in these areas — or less. That ratio is twice as high, or higher, in places like New York, San Francisco or Los Angeles.

These factors — job growth and lower costs — may not matter much to “trustifarians” or tenured professors who increasingly dominate the politics of the American left. But they have made Texas cities irresistible for almost every demographic in America, from boomers to the “young and restless” to families. For good measure, the state’s high-tech mecca, Austin, ranked third in attracting college-educated residents — well ahead hip centers like San Francisco, Boston, New York or Los Angeles.

To be sure, Texas has benefited from higher energy prices, as Perry’s detractors point out.  According to an analysis by the EMSI economic forecasting group, the energy sector jumped from over 230,000 jobs in 2001 to just under 490,000 in 2011. That’s roughly 10% of all the state’s overall job gains. This parallels job growth in other states that have experienced surges in energy-related employment — such as North Dakota and Wyoming.

But some of this has to do with making your own “luck.” Energy-rich California has all but declared war on its fossil fuel industry, once one of the nation’s most important. Instead, the state has placed lavish bets on renewable fuel and the much ballyhooed notion that “green jobs” could provide a massive base for new employment — something even the green-friendly New York Times has called “a pipe dream.”  In fact, employment in this field has actually started to tick down, and the prospect of ever higher energy prices associated with “clean” fuels could prove another nail in California’s economic coffin.

So how much of Texas’ relative success is due to Perry and his fiscal policies? Some — but not too much. Perry has faced budget shortfalls based in part on an expanding state government that has grown through the recession: Texas, notes EMSI’s Joshua Wright, is one of only 10 states where state and local government jobs have grown since 2009, rising by almost 30,000 positions. “These numbers don’t exactly bolster Perry’s small-government agenda claims,”says Wright. Free-marketers also point out that Perry clearly favored, sometimes with state funds, people who had the foresight to back his political career.

But Perry has won business support for things other than naked cronyism. Jim DeCosmo, CEO of the Austin-based Forestar Group, credits Perry with maintaining a business-friendly regulatory regime and with important steps for tort reform. These, he feels, both encourage Texas businesses to expand in the state and for out-of-state companies to move in.

Most of the credit for Texas’ success lies primarily in the state’s economic culture. Rice University urban scholar Michael Emerson notes that Texas’ pro-business tilt started well before Perry, and is not restricted to the GOP. Many of the state’s most prominent Democrats — including the man Perry beat for governor last year, former Houston Mayor  Bill White — have been strong advocates of economic growth and across-the-board energy development.

“I do not feel Perry has   much to do with Texas’ success,” says Houston real estate mogul David Wolff , who last year backed both a GOP challenger to Perry and, later, White. “But at least you can say that he has not appeared to hinder it.”

In fact, Texas’ current and, more so, future prosperity might be better served  if a pragmatist like White ruled the Lone Star State. Perry’s ideological rigidity on spending and social issues may not be the best fit for a state facing massive ethnic change, including a future Latino majority. And as the state becomes more high-tech oriented, education of its surging workforce will grow as a concern, something that Perry does not seem to see as a priority.

Yet despite the state’s shortcomings — and those of its current governor –  Texas’ success remains remarkable, particularly in comparison with that of the other major states. Rigid adherence to low taxes and light regulation may  not be the panacea for all economic problems but the opposite approach of ever higher taxes and debilitating regulation clearly has failed in terms of creating jobs and opportunities.

Rather than demean the Lone Star state, perhaps progressives should begin demonstrating an alternative approach for American prosperity that might actually work someplace other than in the fevered imaginations of academics and pundits.

This piece originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo by Gage Skidmore.

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