In Texas, we have our own holiday traditions, such as making a stop in our travels at a Buc-ee’s. If you’re among the unenlightened, Buc-ee’s is the chain of massive rest stops that combine the cleanest restrooms with some of the weirdest shopping experiences around.
Bon Appetit magazine named it the “Best Rest Stop in America,” calling it “the gold standard for road-trip junk food.” And it has pretty good gas prices.
Buc-ee’s is both a symbol and example of economic freedom, a freedom that two new reports say is at risk nationally and in Texas. Economic freedom includes a lot of things, such as taxes, government spending and regulations, and labor market freedom. It’s a good way to measure opportunity and economic hope in a state or nation; people only prosper when they’re free.
And certainly Buc-ee’s has prospered. A family-owned business, Buc-ee’s emerged from Lake Jackson with the goal of providing traveling families with clean restrooms, specialty gifts and a vast selection of food. Its signature snack is Beaver Nuggets (caramel-flavored corn puffs) but it also offers taffy, beef jerky and walls of fountain drink choices.
Its focus is on families; some of its locations don’t allow 18-wheelers.
Buc-ee’s is thriving in part due to economic policies that affect us all. Gas prices are down due to a combination of government policies and industry innovations (which, in turn, can be encouraged or discouraged by government policies). That means people travel more.
And 2017’s federal tax cuts mean that some people have more of their own money to spend, and companies like Buc-ee’s have more money to invest in workforce and expansion. The company is now opening locations outside of Texas.
That’s a sign that Buc-ee’s and all Americans are enjoying a high level of economic freedom. In fact, a recent Fraser Institute report notes that the U.S. has moved up to sixth place worldwide in economic freedom. That’s good news, though there’s more work to do.
Domestically, this year’s Economic Freedom of North America report by the Fraser Institute shows there are big differences between the states on economic freedom, and the resulting prosperity. Florida ranks No. 1 and Texas continues to rank near the top, while for the last decade California has ranked 47th or lower and New York dead last.
Residents and employers see the difference between the levels of economic freedom. In the last three years, population has grown more than three times faster in Florida and Texas than other areas of the country. Population in New York barely budged, rising by less than one-half of 1 percent.
When you divide the North American states into four groups, ranked by economic freedom, the average per-capita income was 7.3 percent above the national average in the most-free states, compared to roughly 10.5 percent below the national average in the least-free states.
High levels of taxes, spending and regulation make it harder for entrepreneurs to succeed. When businesses can’t expand and hire new workers, everyone is worse off. And of course, the opposite is true.
Let’s bring it back to Buc-ee’s.
It’s not just founders Arch “Beaver” Aplin III and Don Wasek who are benefitting from economic freedom. The chain passes along its prosperity to its workers. It’s so proud of its starting wages that it advertises them.
As The Dallas Morning News reports, “A sign in a window at the Madisonville Buc-ee’s on a recent weekend advertised minimum wages for cashiers or gift associates as $13 to $15, while team leaders could make $15 to $19. The sign also advertised three weeks paid time off, ‘Use it, cash it, roll it,’ and 401(k) access.”
Buc-ee’s may be a roadside icon, especially for Texans, but it’s not perfect. For one thing, it can also symbolize a darker side of economic development: tax breaks. The Buc-ee’s location in Boerne, for example, received an incentive package worth about $6.75 million. Tax breaks for new businesses reduce economic freedom for others — in particular, the residents and existing businesses who have to fund them. Economic development deals are both inefficient and unfair.
And Buc-ee’s has gotten into trouble for some parts of its employment agreements. Some managers have been required to work for a certain length of time and to give six months’ notice before quitting, or face having to repay their “retention pay,” a portion of their earnings that can total thousands of dollars. An appeals court has ruled that provision unlawful, being an unenforceable restraint of trade. Though retention agreements are common in some industries, the court ruled that in this case, economic freedom is paramount.
What can we do to make our state and nation more economically free?
A recent report by the Texas Public Policy Foundation notes that Texas has long championed the Texas Model of limited government supporting economic freedom that provides a foundation for greater prosperity. And Texas could improve by passing conservative budgets, providing substantial tax relief, and removing barriers to opportunity so every Texan can have more chances to prosper.
Buc-ee’s offers a lesson about entrepreneurship. Economic freedom means Americans have more opportunity to pursue their dreams and build something big. Let’s work toward making our state and nation more economically free. Because in the journeys of our lives, we all need clean restrooms and snacks.
Vance Ginn is director of the Center for Economic Prosperity and senior economist at the Texas Public Policy Foundation.
Dean Stansel is an economist at the O’Neil Center for Global Markets and Freedom in Southern Methodist University’s Cox School of Business and the primary author of the Fraser Institute’s annual Economic Freedom of North America report.