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“Texas Jobs Miracle” – Fact or Fiction?



July 8, 2011

AUSTIN, Texas - Gov. Rick Perry is emerging as a possible top contender for the Republican Party's presidential nomination - partly because Texas has seen the largest job-growth figures in the nation since the recession. Some analysts, however, warn that statistics can be misleading.

It's been dubbed the "Texas Jobs Miracle" - a 2.8 percent overall growth in employment, compared with a 2.9 percent loss nationwide. Perry has claimed that nearly half the nation's jobs created in the last two years were in Texas. Supporters argue that this vindicates his governing philosophy of minimal taxes and regulations.

Not so fast, says Don Baylor, senior policy analyst with the Center for Public Policy Priorities, who thinks the verdict is still out.

"Low taxes and low regulation might get you far in the short term. The question is, do you harm clean water and clean air, also education and health services?"

The state's positive job numbers were decades in the making, Baylor says. Long-term public investments began to show returns just as the nation was sinking into recession. Now that the Legislature has passed unprecedented spending cuts, Baylor fears a reversal of those gains.

Public-sector jobs make up almost 18 percent of the Texas workforce, Baylor says, a bit higher than the national average. However, he adds, those jobs account for 48 percent of the state's job growth during the past four years. It's wishful thinking, Baylor says, to conclude that public jobs lost after the latest round of budget cuts will be replaced by private jobs.

"A vibrant public sector is critical to having a sustainable private sector. I think it'll be interesting to see what will happen to the private-sector job market as we see public-sector employment recede."

Like the rest of the country, Texas suffered losses in construction and manufacturing, but enjoyed private-sector gains in education and health services, natural resources and mining, and leisure and hospitality.

Wage statistics can also mislead, Baylor says. At first glance, wage growth in the state looks relatively robust, with an 11.4 percent increase in private-sector pay since 2007 - but that figure shrinks to near zero when adjusted for inflation. More low-wage earners than high-wage earners lost their jobs, Baylor says, skewing the average.

"And so it wasn't like you saw people getting paid more; it's just that when you look at the overall wage picture of the workforce, you had a lot of people that were out of it. So, you kind of lopped off some of the lower-paid employees."

The nonpartisan fact-checking organization PolitiFact rates Perry's claims about the "Texas Jobs Miracle" as "half-true," saying the governor's figures excluded job creation in states that suffered net job losses. PolitiFact's rating of Perry claims is online at politifact.com.

Peter Malof, Public News Service - TX