The Texas Miracle Is A Mirage

Isaiah J. Poole

There is no “Texas miracle” for workers and job-seekers.

There is a Texas mirage, painted vividly by conservatives and being sold as the real deal by arch-conservative Texas governor Rick Perry, who may in a few days declare his intent to run for the Republican presidential nomination. The mirage is this: Because Texas doubled-down on the right-wing orthodoxy of cutting business taxes and regulation, the state’s economy is outperforming the rest of the nation’s in producing jobs.

The mirage is bolstered by such mainstream media articles as Monday’s thinly-reported USA Today story, “Texas wins in U.S. economy shift.” That story declared, “Texas became the USA’s second-largest economy during the past decade — displacing New York and perhaps heading one day toward challenging California — in one of the biggest economic shifts in the past half-century.”

The story about being the country’s second-largest economy is a good one as long as you don’t ask how it got there and who is being left behind. If you ask those questions, here’s some of what you might find.

  • Texas has the third-largest employment shortfall among all states, according to an Economic Policy Institute study. In other words, only two states fared worse in their inability to not only make up for the jobs lost during the recession but to accommodate population growth. The Texas economy is nearly 650,000 jobs short of what it needs to keep up with the growth of the working-age population.
  • Most of the jobs being produced in Texas don’t come with Texas-sized wages. Just the opposite, as the Texas Independent recently reported: Texas is the state with the largest percentage of its workers earning minimum wage or less: almost 10 percent. In fact, 12 percent of all of the nation’s minimum wage workers work in Texas. And the numbers of minimum wage workers grew by 76,000 from 2009 to 2010. Also, Texas hourly workers earn $1.30 an hour less than the national average: $11.20 an hour compared to $12.50 nationally in 2010.
  • Texans on average only saw their wages increase about a half percent between December 2007 and April 2011. That compares to 9.3 percent in California, 2.5 percent in New York, and the United States average of 5 percent.
  • Texans are no slouch, though, when it comes to rewarding the wealthy. Texas CEOs saw their average salary increase 45 percent between 2000 and 2010, adjusted for inflation. Their secretaries and support staff, on the other hand, saw their average salaries increase only 1.7 percent. In general, average workers saw their inflation-adjusted salaries increase between 5 and 7 percent. Their supervisors on average saw their income increase almost 30 percent. (These are calculated based on Bureau of Labor Statistics figures for 2000 and 2010 by our researcher Eric Hunt.)
  • A higher percentage of Texans lived in poverty in 2009 (17.1 percent) than did in 2001 (15.2 percent) when Perry became governor, according to the U.S. Census Breau. It is exceeded only by California in the number of people in the state receiving food stamps, 3.6 million. Yet, as the number of poor and working poor people increase, Texas is shredding its safety net, with state spending on social services cut by 17 percent.

The question begs to be asked: If the conservative formula of small government and low taxes is a sure-fire way to supercharge an economy and create jobs, why aren’t rank-and-file Texans seeing the benefits? (True, Texas’ unemployment rate is below the national average, but unemployment rates in Massachusetts, Pennsylvania, Maryland and Minnesota, examples of four states with arguably less extremist economic policies, are even lower.) And why did Texas, after a decade of conservative rule, still face one of the nation’s highest state budget deficits?

The answer is the Texas brand of doctrinaire conservatism, which never sees a reason to raise a tax, ignores the concentration of wealth at the top that has failed to flow to the workers who helped create it, and at best grudgingly grants a pittance to the economically vulnerable, is an utter failure. Only a person who believes in the miracle of delusion would want to put this record to the test in a national referendum.

Fortunately, Texans who have been the victims of this failed ideology will have an opportunity to tell the real story of the Texas mirage when the “Speakout for Good Jobs Now” tour comes to Houston July 21. If you are or plan to be in the Houston area, watch for details on location and time as the event nears, or text HOU to 228466 to get Houston event updates and reminders.

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