It's not everyday that you hear good financial news, but in Texas the news is better than most.
That's especially true after recent numbers released by the Federal Reserve Bank of Dallas and the Bureau of Labor Statistics show that Texas gained 262,000 jobs from June 2009 to June 2011. That's half of the net job increase in the entire country. Of the 34 states that are currently adding payroll jobs, Texas jobs make up nearly one-third of the total jobs added.
Payrolls in Texas have risen 2.9 percent since the end of the recession, compared with .4 percent growth for the country as a whole. Unemployment isn't exactly low, at 8.2 percent, but it's lower than the nationwide rate of 9.2 percent.
The USA Today devoted the front page on Tuesday to deciphering the "Texas Miracle." Experts are divided over whether the gains are the result of outside factors like energy prices and a boom-and-bust-resistant housing market or whether Rick Perry, Texas' business-friendly governor for the past 10 years, deserves a large share of the credit.
James Galbraith, a professor of government at the University of Texas-Austin, largely attributes the state's job growth to the energy and export booms. Texas, he notes, has never had an income tax. From 1990 to 2000, before Perry took office, Texas payrolls swelled 36%, compared with 21% for the nation.
"Rick Perry did not come and find a high-tax, high-service state and dismantle it," Galbraith says. "For something to contribute, there (has to be) a change. There's been a change in oil prices."
Others cite a low cost of living and Texas' lack of corporate and income taxes as key factors in bringing companies like Fluor, Toyota, Medtronic, eBay, AT&T, Samsung and Cirrus Logic to Texas.
Jeff Ruiz, head of Medtronic's Texas operations, says the company was drawn by labor costs that are "significantly lower" than those in Los Angeles and a large, high-quality workforce. Ruiz also points to more affordable real estate and the lack of a state corporate tax, though he says the latter was a minor factor. The company, which also received $14 million in incentives from the state — a figure Ruiz says was comparable with other offers — chose San Antonio from among more than 900 U.S. cities it evaluated.
While Texas' fortunes look bright, some other figures point out that these job numbers don't reflect prosperity for everyone. At 17 percent, the state's poverty rate is higher than the national average, and Texas has the highest proportion of residents without health insurance. According to USA Today, Texas also ranks 44th in public schools spending per student and 43rd in graduation rates — and the legislature recently cut $4 billion in public school funding.
Should job seekers come to Texas? It's not perfect, but when it comes to creating jobs, Texas is better than anywhere else.
Why do you think Texas is on top?