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« While We're Retiring Old Featured Posts... | WILLisms.com | Trivia Tidbit Of The Day: Part 499 - Union States & Our Economic Slump. »

Trivia Tidbit Of The Day: Part 498 - Texas, Michigan's Antithesis.

Texas Responsible For 111.5% Of All Private Job Creation In Last 12 Months-

It has often been asserted in recent years that Michigan is in a "one-state recession," a sad but accurate commentary on the plight of the Mitten State.

In a bizarre display of perennial self-loathing, Michiganders keep electing politicians who actively undermine the state's competitiveness in the world-- and even within the rest of the United States.

Michigan's labor laws: written by big labor bosses to spite small and large business alike. Michigan's taxes: all your base are belong to Granholm. Michigan's weather: sort of pleasant during some of the summer. Hey, but they do have Chauncey Billups.

But we know about Michigan. It's been hashed out, ad nauseum.

Times are changing. While it is still too premature to declare a national recession, the one-state recession has spread to about a dozen states, some of which are seeing more of a fleeting housing-based correction than an actual fundamentals-driven recession.

If Michigan was in a one-state recession during boom times, then you might say that Texas is in a one-state boom during hard times.

Take a look (BLS .pdf):


Over the past year, the American economy has added roughly 448 thousand jobs. 239 thousand of those were in Texas. That means that 53% of all jobs created in the United States were created in Texas.

At the same time, the American economy has added 244 thousand government jobs (making the 448K number look even more pathetic).
Of those 244 thousand government jobs, Texas contributed 12 thousand-- or 5%-- of them.

Meanwhile, the American economy netted 203 thousand private jobs, while Texas netted 226 thousand private jobs. That means that without Texas, the U.S. would have lost 23 thousand net private jobs over the past year.

Now, that's just crazy. Surely jobs were created elsewhere, right?

Yes, there were jobs created here, there, and everywhere. Even in Michigan. But on the net, Texas is one of the few states keeping the American economy afloat.

Only 14 states actually netted job losses over the past year (35 netted job gains; 1 was unchanged). However, 17 states netted private job losses, while 33 netted job gains.

Even if you examine just the states that added net jobs over the past year, throwing out net losers of jobs, Texas accounts for 34% of all jobs created, 8% of government jobs created, and 42% of all private jobs created. Still an incredible series of numbers.

Nationally, including Texas, 55% of all jobs were created by government; in Texas, only 5% of jobs were created by government. Taking away Texas, nationally, 111% (231K out of 208K) of all jobs were created by government. Conversely, Texas is responsible for 112% of all the net private jobs created in the United States over the past year.

This post is not meant as a boast or brag. But it should serve as a wake-up call to much of the rest of the country. Texas is not perfect, but its policies are sound. They attract people. They attract business. They attract capital.

What about oil? Isn't Texas just lucky that it has some oil? Sure, Midland has an unemployment rate of 2.7%. But a closer look at the data tell us that today's Texas is not the irrationally exuberant Texas of the early 1980s.

While some of the jobs in Texas are certainly being created in the energy sector due to the high price of oil, many of the jobs were created in categories like non-government (and likely non-union) construction; trade, transportation, and utilities; financial activities; professional and business services; education and health services (again, non-governmental); and, leisure and hospitality.

Only 16,200 jobs out of 226,400 private jobs (around 7%) created in Texas over the past year have been in "Natural Resources & Mining" (code for the oil business).

While many of the Midwesterners in Congress pander to the most Luddite-filled corners of their districts on trade and China, again, Texas proves that free trade is not to be feared:

Real Texas exports saw a turnaround in the first quarter of 2008, rising 3.9 percent, following a 0.4 percent decline in the previous quarter. Texas exports are up a solid 10.4 percent from year-ago levels.

The first-quarter rise in export growth was broad-based across Texas’ major trading partners. Exports to Mexico, which make up a third of the state’s total, edged up 1.7 percent. Exports to Asia (excluding China), Canada, China and the European Union rose 2.5 percent, 4 percent, 4.2 percent and 4.8 percent, respectively. Exports to Latin America (excluding Mexico) climbed sharply, registering a solid 20.6 percent increase.

You mean that America can still produce things that the rest of the world will buy?


They're just not made in Michigan any longer. They're made in Texas.

At the same time, home prices are continuing to rise in much of Texas at the same slow and steady pace they have been for years, because there never was any sort of crazy price hyperbole (often driven by bad policy) and thus no reason for any painful correction.

Again, this is not meant to rub it in that Texas is doing well. But we should learn some lessons from Texas as we try to fix our national economy. More specifically, Michigan and Rhode Island and New Jersey and other slumping states can learn some lessons from Texas (and Utah and Wyoming and New Hampshire).

The prescription of higher taxes, more spending, creating government jobs, regulating the heck out of everything, letting union bosses run the labor market, and so on, is misplaced.

Texas is doing well for a lot of reasons. Oil is about 7% of it. Being close to Mexico, having good natural seaports and warm weather and so forth, is probably another small portion of it. Really, though, the vast majority of Texas' current success is attributable to its overall tax, business, and regulatory climate.

As we'll point out in another post this week (this post is Part 1 of 5), Texas is not the only state doing well, and there are some clear correlations between low taxes and good economies, even in this slump we're in, nationally.

Stay tuned.


Previous Trivia Tidbit: Right To Work Matters.

Posted by Will Franklin · 23 June 2008 08:11 AM