The Flip-side of Perry’s Texas Miracle
Though I’m not sure where the discussion started, Paul Krugman raised the ante by throwing water on the idea that Texas (and by extension Governor Rick Perry) has created a large percentage of new U.S. jobs between June 2009 and June 2011. The Dallas Fed’s reporting that half of all employment gains since June 2009 are in Texas.
But the BLS data I found make this look even better for Perry: employment in Texas increased by 261,465 jobs, while employment for the entire country increased by only 232,023. That’s right, Texas is responsible for 113% all U.S. job growth!
Wow! Alright, Perry the Platypus! You’ve saved the day yet again!
Wait a second. Yes, Texas gained 261,465 jobs in those two years. But with jobs growing by 2.4% and the labor force growing by 2.9%, the flip side stat’s true too: compared to two years ago, Texas has 85,784 more unemployed people. Nationwide, there are 793,869 fewer unemployed people. So over the last two years, Texas has gained 879,653 more unemployed people than the rest of the country.
Okay, I know, that doesn’t even make sense. But the point remains: you can’t own the job creation stat without also owning the flipside, which is much higher unemployment: Of the 347,249 person increase in the Texas labor force in the last two years, 24.7% are unemployed.
One last thing. The Texas Miracle isn’t going to last. Half of Texas job growth in the last two years was in the government sector (fed by federal government stimulus spending), and Texas is slashing government spending this year in response to a $27 billion budget shortfall. Thousands of government workers will soon be joining about a million fellow Texans looking for work.
Update, August 17—–
I swear, every time I publish one of these things I think of something I should have included within two minutes.
Assume that some portion of those 347,249 new workers in Texas came from some other part of the U.S. where they were jobless. Doesn’t this mean that if they hadn’t gone to Texas, a higher percentage of them would be unemployed today?
Maybe. Or maybe these 347,249 are industrious, moving to where they think jobs are, and are unable to find jobs at more than 2.5 times the rate in the rest of the country. More careful parsing of the data is called for.
By the way, I’m not surprised that the new jobs are at the low end of the pay scale. Unemployment is always higher among the less-educated, but this recession’s been unusually hard in that respect. Back in late 2007, about 5.5% more diploma-less people were unemployed than college graduates (7.7% – 2.2%), fairly close to the 15-year average of 5.9%. Today, the gap is 10.7% (15.0% – 4.3%), very close to the 10.9% peak. We should expect a disproportionate share of less-educated people to be regaining work, because they’ve been disproportionately impacted by job losses.
Interestingly, unemployment among both groups is 0.7% lower than the 2009 peak; but that drop means a 14% fewer college graduates out of work, but only 4.5% fewer jobless without diplomas.