Is the economic and job growth in Texas a miracle or a myth? Brian Kelsey, an economic development consultant in Austin and a longtime EMSI friend and client, investigated the issue with a hard look at data from EMSI, among other sources, and presented his findings in October at the Texas Economic Development Council conference.
Kelsey’s conclusion: The evidence provides fodder for those on both sides. But while the debate matters, looking at Texas through the lens of wealth creation provides a more nuanced picture than strictly looking at new jobs and population growth.
As Kelsey noted in his presentation and a follow-up blog post, Texas is doing well by traditional measures. Job growth has dwarfed that of other states (more on that below). The state’s population is growing at about twice the national rate, and nearly a third of the 2001-2013 U.S. population growth in the 25-and-under age cohort occurred in Texas. “That’s a demographic advantage in terms of workforce availability that many states would kill for,” he writes.
Also, net migration into Texas from 2000 to 2010 amounted to nearly a million people, just below Florida for the the most in any state (see the chart below from Kelsey’s presentation). For these and other reasons, economist Tyler Cowen argues in Time that the U.S. can look to Texas for answers — and our future.
But in other metrics, Texas is in the middle of the pack, or falling behind. Kelsey points out that the state is 35th in jobs per 100 residents. Forty counties in Texas have unemployment higher than the U.S., and 15 of these counties have double-digit jobless rates. Educational attainment also lags in a number of Texas counties, even while Kelsey found using EMSI data that 68% of job openings in occupations that pay a median wage of at least $18 an hour between 2013 and 2020 will require postsecondary education.
Then there’s wealth creation. Texas ranks 28th in per capita income adjusted for purchasing power parity, and GDP per capita also lags behind D.C., Delaware, North Dakota, and other states.
Investment is wealth-generating industries, coincidentally, is something economic development leaders in neighboring Oklahoma are pushing hard for, as we wrote about in highlighting the major data-driven state strategy spearheaded by Deidre Myers and the Oklahoma Department of Commerce. GOVERNING Magazine also recognized Myers’ efforts in a recent article.
For Texas, meanwhile, Kelsey also wonders if the state is producing enough high-paying jobs. Cowen notes in his Time piece that 58% of jobs created since the end of the Great Recession pay less than $13.83 an hour. In Texas, EMSI’s latest data shows that 46% of new jobs since 2010 are in this low-wage category. And even from 2004 to 2007, when Texas accounted for 15% of all new jobs (see Kelsey’s slide below), 42% of these new jobs in the state were in occupations with median wages of $13.83 or less an hour.
Kelsey concludes by arguing that the miracle-or-myth debate is “a red herring — a media-friendly smokescreen that obfuscates the true threat to the state’s future economic competitiveness: the growing contingent of people who appear to believe that economic development is possible without public investment.” He goes on to write:
Take education, for example. Nearly one-third of total US population growth in the ≤ 25 age cohort occurred in Texas between 2001 and 2013. That’s a demographic advantage in terms of workforce availability that many states would kill for. The question is, of course, are we serious about investing in people at the level that’s required to ensure that most residents of the state will be able to participate in the “miracle” (slide 24)?
Are we serious about experimenting and investing in new models of career and technical education that get away from the false dichotomy that’s plagued debates about higher education in Texas recently? Economic developers are critical for making these connections clear to politicians and the people who elect them.