Rick Perry's Texas: Jobs Boom Driven by Low-Paying Jobs

on August 08 2011 7:04 PM
Gov. Rick Perry, R-Texas
Could the furor over Texas A&M to the SEC rumors overshadow Rick Perry's weekend presidential announcement? REUTERS/Jonathan Ernst

If Texas Governor Rick Perry finally launches his endlessly alluded to presidential campaign, he will no doubt continue to tout the state's robust job growth as evidence of his economic qualifications.

That Texas has exhibited strong job growth is beyond dispute: the Dallas Federal Reserve found that 37% of all net new American jobs between June 2009 and April 2011 -- that's about 262,000 -- were created in Texas, and the state's unemployment rate of 8.2 percent is below the national average. Perry cites such data as vindicating the his business-friendly economic policies, including a lack of a state or corporate income tax.

But low-wage jobs play an outsize role in powering Texas' economic engine. The majority of the state's workforce is paid an hourly wage rather than a salary, and 9.5 percent  of those workers earned the minimum wage or below compared to about 6 percent for the rest of the nation, according to the Bureau of Labor Statistics. From 2007 to 2010, the number of minimum wage workers in Texas rose from 221,000 to 550,000, an increase of nearly 150 percent. Hourly wage workers' median salary of $11.20 per hour in 2010 lagged behind the national median of $12.50.

Mark Dotzour, chief economist at Texas A&M's Real Estate Center, told USA Today that the income levels are the price of doing business, noting that "either you choose to have low-wage jobs or you choose to have no jobs at all."

But median income is not the only indicator where Texas lags behind much of the nation. Texas has the highest proportion of children without health insurance, ranks 43rd in high school graduation rate and in 2009 17 percent of Texans lived below the poverty level in 2009, compared with 14 percent for the nation. Some critics also question Perry's role in guiding the jobs boom, noting that the state has never had an income tax and pointing to a spike in oil prices, something that benefited the state's substantial oil and gas industry.

"Rick Perry did not come and find a high-tax, high-service state and dismantle it," James Galbraith, a professor of political science at the Univsersity of Texas, Austin, told USA Today. "For something to contribute, there (has to be) a change. There's been a change in oil prices."

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