Why Has Texas Seen A Rise In New Jobs?

Texas Gov. Rick Perry formally announced his run for president over the weekend. Perry's record of job creation in his home state is a centerpiece of his campaign. Melissa Block fact checks some of his claims with Evan Smith, editor and CEO of the Texas Tribune.

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MELISSA BLOCK, host: When Texas Governor Rick Perry jumped in to the Republican presidential race this weekend, he touted his record as leader of the state with what he called the strongest economy in the nation.

Governor RICK PERRY: Since June of 2009, Texas is responsible for more than 40 percent of all of the new jobs created in America. Now think about that. We're home to less than 10 percent of the population in America, but 40 percent of all the new jobs were created in that state.

BLOCK: We're going to fact-check some of Governor Perry's claims about Texas's economic strengths now with Evan Smith. He's editor-in-chief of the online news organization the Texas Tribune. Evan, welcome to the program.

EVAN SMITH (Editor-in-chief, Texas Tribune): Hi, Melissa. Thanks.

BLOCK: And what about that number? Governor Perry says four in 10 new American jobs since June 2009 are in Texas. He also claims 1 million net new jobs in the 10 years since he's been governor there. Is that true?

SMITH: They're both statistics that could be argued by him as true. But the real story is not the numbers, it's what's behind the numbers.

BLOCK: OK. Well, let's talk about what's behind them. One factor to consider is that the population of Texas is growing very fast. Are jobs keeping up?

SMITH: Well, the population of Texas is growing astronomically, and that may be one of the reasons that you're seeing so many jobs created in Texas, particularly in the public sector. Since 2000, according to the Wall Street Journal, 19 percent growth in the public sector versus only 9 percent growth in the private sector. And a lot of that is fueled by population growth because of things like public schools, where so many new kids are enrolling over these last 10 years. They've had to create a whole lot of jobs just to keep up with that growth.

BLOCK: Critics are also saying, you've got to look at the kind of jobs that Texas is creating. The state has the highest proportion of workers earning minimum wage or lower - tied with Mississippi, I gather.

SMITH: Well, right. One of the big things that critics of Perry will say is yeah, you created a lot of jobs but are they the kind of jobs that people would actually want? Are they the kind of jobs that you would want to brag about if you were doing anything other than running up the numbers? Now, I suppose that people in other states who don't have any job of any kind might say, you know what? I'd take that job. In fact, I'd take three of those jobs.

BLOCK: What is the Texas unemployment rate right now?

SMITH: It's 8.2 percent right now, which is not 9.1 percent, the federal unemployment rate, but it's also not 5 percent. I mean, the reality is, you'll hear a lot about how the unemployment rate in Texas is that much less than the country. But it isn't anything really to write home about. There are problems here. And we had a $15 billion budget shortfall in the last legislative session that they resolved entirely through spending cuts, and so we had $4 billion cut from public education. We had millions and billions cut from higher ed and from health care.

And the real test is going to be come September 1, when the byproduct of this session goes into effect. Will those cuts be seen as draconian by the people who are affected by them all across Texas? And will the story of the Texas economy pivot from the success that we've seen to something more problematic?

BLOCK: And will those cuts also be translated into job losses then?

SMITH: Well, the reality is, in order to balance that budget, a whole bunch of people are going to be let off the public employee roles. Much of that government job growth we talked about earlier is going to become a government job decline.

BLOCK: Evan, how much of the good fortunes of both Texas and Governor Perry can be traced to the boom in the energy sector and high oil prices, in particular?

SMITH: Well, there's no question that the high oil prices, and the boom in the energy sector, have contributed to job growth. I'm not sure that you can ding the governor for that, though. I mean, the fact is the governor has said all along he knows he does not create jobs, that government does not create jobs. But what the governor and his administration can do is create conditions that allow businesses to create jobs.

And they talk about low taxes. They talk about a predictable regulatory environment which frankly, means - translated - much less regulation on business, and it means the absence of frivolous lawsuits. Now, those conditions may have resulted in oil companies and other energy companies being here. In turn, the boom in those industries may have created a lot of jobs. Whether you can walk a straight line back to the governor or not, the fact is if it happens on his watch, he does get some of the credit. Just as if it happens on his watch and it's bad, he gets some of the blame.

BLOCK: Let's talk a bit about Governor Perry's stance on federal stimulus money, because critics see some hypocrisy there on the position...

SMITH: Well, it's really complicated, Melissa. You've asked a good question. You know, the governor, even as recently as this weekend, was talking about the failed stimulus out of Washington. Well, the reality is he did turn down $555 million in unemployment insurance extension money, rather famously, a couple sessions ago. But Texas also took almost $17 billion in federal stimulus money to balance not only the budget in the '09 session, but retroactively in the '07 session.

And the governor will say, well, you know, the unemployment insurance money had strings attached. We don't like strings from the federal government. But he also acknowledges that when the state sends money down to school districts and hospital districts and so on, the state puts strings on. The governor likes those strings. He doesn't like the federal strings.

So he talks about failed stimulus money. But the reality is, had Texas not taken that $17 billion, we never would have been able to balance our budget.

BLOCK: Evan Smith, editor-in-chief of the Texas Tribune, talking with me from Austin. Evan, thanks so much.

SMITH: Thanks, Melissa.

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