Speaking about the strength of a wavering national economy is difficult for any Federal Reserve president. Fortunately, Dallas Fed President Richard Fisher has an easier job touting the success of his region because of the robust, quality job growth in Texas.
In fact, he spoke about this at the Texas Public Policy Foundation’s “Texas at a Turning Point: Free Market Summit” this past April and did it again just last week before the U.S.-India Chamber of Commerce.
Let’s consider four graphs from his recent speech that tell the story of the Texas miracle.
1) Aren’t Texas jobs a recent phenomenon driven by Texas’ vast natural resources? Not at all! Texas employment growth since 1990 blows the other large states employment growth rates out of the water. This is a long-term Texas miracle.
2) Aren’t the rest of the states’ labor markets thriving? Using data in a recent Investor’s Business Dailycommentary, President Fisher noted that excluding Texas the rest of the nation employs 350,000 fewer people than before the last recession. The Texas labor market continues to thrive.
3) Aren’t these all oil and gas jobs? Oil and gas jobs have been a vital part of the Texas miracle because of sensible regulations that do not shackle this productive sector, but this sector’s share of nonfarm employment is only 2.5 percent. Let’s repeat that: 2.5 percent! The figure below shows that seven other sectors added more jobs than the oil and gas sector. We should put this myth to rest since we are not in the 1980s anymore when Texas depended greatly on oil and gas. Texas is now a highly diversified economy, particularly after the implementation of the North American Free Trade Agreement.
4) Aren’t most of these jobs added in Texas low paying? To the contrary, more than half of all jobs created since 2000 have been mid- to high-paying jobs with a majority of those being in the highest wage quartile. The rest of the nation has been hemorrhaging middle-wage jobs, leading to a wider disparity among income groups.
President Fisher’s speech(es) notes the success story in Texas. Many factors contribute to this, but there are multiple signs that Texas’ limited government philosophy has been the harbinger of bringing people out of poverty and into prosperity. Let’s continue this trend by increasing state budget transparency, limiting state spending, and reforming taxes so that Texans have all the tools necessary to achieve their dreams.