The Truth About Rick Perry's 'Texas Miracle'

Texas' unparalleled job growth stems from both policy and circumstance.

August 17, 2011, 6:58 PM

Aug. 18, 2011 — -- Rick Perry is a miracle-maker, but only if you ask Rick Perry. The Texas governor has traversed three early-primary states in the week since he announced his candidacy for president, touting Texas's job growth as the "Texas miracle."

And by some measures, Perry is right. Texas's economic growth is outpacing every other state in the country. In fact, the Lone Star State is growing at twice the national average.

A widely-cited report from the Dallas Federal Reserve shows that 37 percent of all the jobs created since 2009 were created in the Lone Star state. In fact, Texas has 30,800 more jobs today than it did in December 2007, before the recession began.

But the story is far more complex than that.

"Some people dismiss Texas' job creation," Perry said at a campaign stop in Bedford, N.H., Wednesday. "There have been some over on the left that said that the fact is that those 40 percent of the jobs created in America since ... June of 2009 was just luck. Well, Mr. President, America's crisis is not bad luck. It's bad policies from Washington, D.C."

While a large part of Texas' job growth can be attributed, as Perry does, to low taxes, minimal regulations and business incentive packages, a significant proportion of the growth also comes just from Texas being Texas.

The Lone Star State is rich in natural resources such as oil and natural gas, so when the rest of the country was struggling with high energy prices at the onset of the recession, Texas companies were turning big profits and, therefore, pumping tax revenue into the state coffers.

These high energy profits helped Texas stave off the brunt of the recession for about six months.

And while the state's economy is growing at twice the national rate, so is its population. Texas grew 20.6 percent from 2000 to 2011, while the country's population only increased by 9.7 percent. With more people comes more purchasing power, which leads to job growth.

Regardless of whether Perry can personally take credit for the jobs created, critics claim the numbers are just smoke and mirrors because the new jobs are primarily low-wage.

"What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states," New York Times columnist Paul Krugman wrote Sunday. "What you need to know is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment."

Read more about Perry's record on job growth here.

Texas is tied with Mississippi for having the highest proportion of hourly workers earning minimum wage or less, according to Bureau of Labor Statistics data. Overall, Texans earned about $2,300 less than the national average, according to 2009 Census Bureau data.

These low-paying jobs usually do not come with health insurance, which is part of the reason why Texas has the highest rate of uninsured people in the country. One of every four Texans lives without health insurance.

Read more about Perry's record on health care in Texas here.

Depending on which measure is used, the jobs picture in Texas can be painted in radically different ways. On one hand, more Texans are getting a paycheck, on average, than in any other state. But on the other hand, those paychecks are more often from low-wage jobs without insurance in a state that has fewer social benefits than most others.

"People focus on the wage and, yeah, that's important, people need to support their families," said Lisa Givens, a spokeswoman for the Texas Workforce Commission. "But sometimes it's about looking down the road, looking at an area where there are going to be opportunities for me and for my family and for growth."

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