Miracle or Myth: The Real Story of Job Creation & Economic Recovery in Texas

Miracle or Myth: The Real Story of Job Creation
& Economic Recovery in Texas
TEDC 2013 Annual Conference
2020 Vision | San Antonio
October 17, 2013

Miracle or Myth?
“We’re sending the message that
this is a state where you can risk
your capital and know that you can
have a chance to have a return on
investments. It’s a reason that we’re
leading the nation in job creation.”
“People are fleeing high tax, high
regulatory states to come and be a
part of what some people refer to as
the Texas Miracle. It’s not a miracle,
as a matter of a fact, it’s just
common sense.”
Governor Rick Perry
Sources: Newsmax, The Washington Times

October 17, 2013 | TEDC 2013 Annual Conference

St. Louis Post-Dispatch via Associated Press

“Texans would be well served if Gov.
Perry spent a little more time in Texas
fixing the state’s systemic economic
problems and a little less time boasting
to out-of-state voters and businesses
about a Texas miracle that never was.”
DNC spokesperson

Summary
• Evaluating performance of the Texas economy
through lens of wealth creation reveals much
more nuanced picture than “miracle/myth”
• Growing lack of seriousness about connection
between public investment & performance of
state & local economies is a serious threat
• Educating residents & businesses about EDC
return on investment is critical priority

The “Miracle”


Explaining the Texas “Miracle”
• Primary industry resiliency—manufacturing &
energy—combined with multiplier effect
• Growth in regional offices, especially leading
up to recession during 2004-2007

• Population growth accelerated the expansion
and dampened the downturn


Post-Recession GDP Growth ($)


Source: US Bureau of Economic Analysis, 2009-2012. Data in table
is in millions of dollars. Not adjusted for inflation.

Job Creation
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%

Texas

US

Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCEW).


Job Creation
Expansion Recession Recovery
2004-2007 2008-2009 2010-2013
Texas

US
TX Share

908,382

-303,219

882,621

6,087,873 -6,197,819

5,986,592

15%



5%

15%

Post-Recession Job Change (#)


Source: US Bureau of Labor Statistics (CES), June 2009-July 2012.
Data in left table is in thousands of jobs. Not seasonally adjusted.

Job Creation
Expansion
2004-2007

Recession
2008-2009

Recovery
2010-2013

US

TX

US

TX

US

TX

8%

38%

-2%

2%

10%

13%

Mining, Quarrying, and Oil and Gas Extraction

27%

36%

-10%

-11%

25%

40%

Professional, Scientific, and Technical Services

13%

20%

-4%

-4%

9%

14%

Construction

9%

19%

-17%

-11%

5%

12%

Accommodation and Food Services

7%

12%

-3%

0%

9%

14%

Retail Trade

3%

7%

-5%

-3%

4%

8%

-3%

5%

-12%

-9%

4%

7%

Management of Companies and Enterprises

Manufacturing


Job Growth in Regional Offices, 2004-07



Job Growth in Manufacturing, 2004-07



Population Growth
3.0%
2.5%

2.0%

Texas

1.5%
1.0%
0.5%

US

0.0%

Source: EMSI, US Census Bureau


Net Migration to Texas (# People), 2000-10
200,000
180,000

Total, 2000-10

160,000

Florida

People

% Pop

1,146,917

6.1%

Texas

939,184

3.7%

140,000

Georgia

607,872

6.3%

120,000

North Carolina

554,912

5.8%

Arizona

548,539

8.6%

Illinois

-533,582

4.2%

100,000
80,000

California

-1,160,601

3.1%

60,000

New York

-1,319,239

6.8%

40,000
20,000
0

Source: Internal Revenue Service, 2000-2010. Data includes only tax filers.


Net Migration to Texas (# People), 2000-10

Source: Internal Revenue Service, 2000-2010. Data includes only tax filers.


The “Myth”


“Miracle” talk concealing blind spots?
• Texas ranks 35th in jobs per 100 residents—is
job growth keeping pace with population?
• Texas is well outside top states in measures of
wealth creation—(1) are we creating enough
high-paying jobs? (2) is workforce adequately
prepared for growing skill requirements?
• 40 counties in TX have higher unemployment
than US, including 15 at 10% or greater

Enough Jobs? (Jobs Per 100 Residents)
States

2012

Texas Counties

2012

1. District of Columbia

115.7

1. Kenedy

117.6

2. North Dakota

61.4

2. Carson

77.1

3. Nebraska

51.8

3. Loving

70.4

4. Minnesota

50.7

4. McMullen

63.9

5. Wyoming

50.3

5. Gregg

63.8

6. South Dakota

49.7

250. Wilson

15.0

7. Massachusetts

49.3

251. Bandera

14.4

8. Iowa

49.1

252. Clay

13.7

9. Wisconsin

48.6

253. Newton

11.9

10. Vermont

48.4

254. San Jacinto

35. Texas

41.8

48. Bexar

Source: US Bureau of Labor Statistics (CES). Data seasonally adjusted.


7.9
42.0

Wealth: GDP Per Capita ($)

Source: US Bureau of Economic Analysis, 2012.
Adjusted for inflation ($2005 chained).


Wealth: Per Capita Income ($ Adj)


Source: US Bureau of Economic Analysis, 2011.
Adjusted for inflation ($2005 chained)
and purchasing power parity.

Unemployment Rate (%)

Source: US Bureau of Labor Statistics (CES), July 2013.
Not seasonally adjusted.


Unemployment Rate (%)
Starr
Zavala
Sabine
Willacy
Hale
Maverick
Presidio
Newton
Hidalgo
Loving
Jefferson
San Augustine
Matagorda
Orange
Cameron

15.0
14.9
14.3
13.8
12.0
11.8
11.8
11.1
10.8
10.6
10.2
10.2
10.0
10.0
10.0

Source: TWC, August 2013.
Not seasonally adjusted.

40 counties in Texas currently
have higher unemployment
rates than US (Aug 2013).

Source: EMSI

Unemployment by Education (%)
20
TX

US

No High School Diploma

21%

16%

16

High School Diploma

25%

28%

14

Some College/Assoc Deg

28%

28%

12

Bachelor's Degree +

26%

28%

18

Population Age 25+

10
8
6
4
2
Jan-92
Oct-92
Jul-93
Apr-94
Jan-95
Oct-95
Jul-96
Apr-97
Jan-98
Oct-98
Jul-99
Apr-00
Jan-01
Oct-01
Jul-02
Apr-03
Jan-04
Oct-04
Jul-05
Apr-06
Jan-07
Oct-07
Jul-08
Apr-09
Jan-10
Oct-10
Jul-11
Apr-12
Jan-13

0

High School Diploma

Bachelor's Degree +

No High School Diploma

Some College/Associate Degree
Source: US Census Bureau (ACS), 1992-2013


Population Age 25+ by Education
TX County

No HS Diploma

HS Diploma

Total

Liberty

26%

40%

66%

Cameron

37%

25%

61%

Hidalgo

36%

24%

61%

Webb

37%

23%

60%

Walker

19%

38%

57%

Henderson

19%

36%

55%

Ector

26%

28%

54%

Hunt

17%

35%

52%

Angelina

19%

33%

52%

Harrison

16%

35%

51%

Bastrop

18%

33%

51%

Potter

24%

26%

51%

San Patricio

23%

27%

51%


31% of job openings in TX
between 2013 and 2020 will
require postsecondary
education (including 10%
< four-year degree).
68% of job openings in
occupations with median
wage of at least $18 per hour
in TX between 2013 and 2020
will require postsecondary
education (including 17%
< four-year degree).
Source: EMSI, BLS

Source: US Census Bureau (ACS), 2012

http://taxfoundation.org/article/2014-state-business-tax-climate-index


The Opportunity


Population by Age Cohort
Age Group

Share of Total
Share of Total
% Pop US
Pop Growth % Pop TX
Pop Growth
2013
2001-13
2013
2001-2013

Next generation (< 25)

33%

16%

37%

31%

Primary working (25-44)

26%

-4%

28%

16%

Mid-late career (45-69)

31%

77%

28%

46%

Retired (70-79)

6%

5%

5%

5%

Elderly (80+)

4%

7%

3%

3%

Texas accounted for 16% of total US population growth during 2001-2013, but
32% of the next generation (< 25) age cohort.

Economic Development


Key Priorities
• Get away from miracle/myth debate & raise
awareness about what data is really saying
about state and local competitiveness
• Clearly make case for greater investment in
assets that drive economic development
• Improve understanding of EDC activities and
ROI to Type A and Type B corporations

Source: Area Development Online, 27th Annual Corporate Survey


Texas EDC Expenditures (2010-11)

EDCs spent approximately $735.6 million in 2011 (60% Type B, 40% Type A), compared
to $33.8 billion the state received in total sales and gross receipts tax revenue (2%).
http://www.texasahead.org/lga/EDC_Reports/edcr2011/edcr2011.pdf


Brian Kelsey
Civic Analytics LLC
3420 Executive Center Drive
Suite 300
Austin, TX 78731
brian@civicanalytics.com
Thanks to EMSI for making data
512-731-7851
available for this presentation.
http://civicanalytics.com
@civicanalytics

Miracle or Myth: The Real Story of Job Creation & Economic Recovery in Texas

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