What Texas can teach us 

If you want to see a place where the private sector in America has been booming and generating jobs, you should look at Texas. That’s my take from these absolutely fascinating numbers compiled from Bureau of Labor Statistics figures by The Business Journals, tracking the increase or decrease in private sector jobs in the ten years between April 2001 and April 2011. Any precise ten-year period is somewhat arbitrary, of course, since the two endpoints can fall at different points in the business cycle, and so picking different starting and end points will produce different pictures. But the numbers here look pretty unambiguous.

 

In those 10 years, Texas gained 732,800 private sector jobs, far ahead of the number two and three states, Arizona (90,200) and Nevada (90,000). The nation overall lost more than 2 million private sector jobs, with the biggest losses coming in California (623,700), Michigan (619,200) and Ohio (460,900).

 

Texas’s gain was also impressive as a percentage of jobs at the beginning of the period. Texas had job growth of 9%, more than any other state except much smaller North Dakota (19%), Alaska (17%), Wyoming (16%), Montana (12%) and Utah (10%). The biggest losers in percentage terms, by far, were Michigan (16%) and Ohio (10%).

 

Obviously Michigan and Ohio were hurt by the parlous condition of the Detroit-based auto firms and other manufacturers; North Dakota, Alaska, Wyoming and Montana were helped by local oil, gas and coal booms. Texas and California are both too big to be explained by just local factors.

 

The lesson of the previous decade seems clear: if you take a previously prosperous and creative state and subject it to high taxes and intrusive regulations, it loses 5% of its private sector jobs; if you take a previously somewhat less prosperous and creative state and govern it with low taxes and light regulation, it gains 9% more jobs, even as the nation’s economy is suffering.

 

I’ve explored previously this contrast between our two largest states. Here’s another set of numbers about our second and third largest states that tells a story about what has happened over a longer period of time. In 1970 New York had 18 million people. In 2010 New York had 19 million people. In 1970 Texas had 11 million people. In 2010 Texas had 25 million people.

 

Don’t tell me public policy doesn’t account for much of the difference.

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Michael Barone

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