Rick Perry’s dishonest jobs claim

Posted by AzBlueMeanie:

The Washington Independent has a take down of the right-wing noise machine's dishonest talking point about Governor Rick Perry's Texas job growth. Perry touts misleading job growth stats at gathering for state legislatures:

Gov. Rick Perry delivered his signature anti-Washington, states’ rights rhetoric to a packed theater at the National Conference for State Legislatures in San Antonio Wednesday, lauding Texas as the “epicenter of job growth,” pointing to 40 percent increase of new U.S. jobs created in the state as proof.

Perry has been fond of peddling that figure on his way to a likely presidential bid, but as the Texas Independent has previously reported, it’s a misleading measure of Texas’ jobs.

While the president of the Federal Reserve Bank of Dallas has said the state accounted for 37 percent of net U.S. job creation since June 2009, the number of the lowest-paying jobs in Texas has jumped drastically. The state is home to the greatest number of employees working at or below the federal minimum wage compared to any state; in 2010 about 550,000 Texans were working at or below minimum wage ($7.25 per hour in 2010). California — which Perry often is fond of comparing Texas against — has among the smallest number of minimum wage workers at less than 2 percent.

Perry’s job growth argument accounts for no state income tax, but fails to include central economic factors that influence the Texas economy such as Texas’ rich natural resources, energy and high-tech industries and successful Gulf port businesses. Also missing from his speech was mention of the structural deficit built into Texas’ budget, including the one he pushed this Legislative session that cut billions to social services, health and nursing care and public education and has left thousands unemployed.

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Despite the $27 billion deficit the Texas Legislature faced this year, and some $15 billion in cuts to areas including basic social services and public education, Perry praised Texas for making do with $15 billion less than the previous budget while keeping taxes low and preserving the state’s Rainy Day Fund, a reserve used in times of economic crisis.

While Perry places Texas on a pedestal for job development, hundreds of thousands of jobs are expected to be lost in the next two to three years, as a result of the sweeping and historic cuts to the Texas budget, advocated by Perry.

Huge slashes to Medicaid and health and human services marked the Texas budget, as well as some $4 billion sliced from public education, forcing about 12,000 teachers out of work so far, with up to 100,000 out a job in coming months.

The Houston Chronicle systematically dismantled Perry's dishonest jobs claim in this report. Ten reasons why the Texas economy is growing that have nothing to do with Rick Perry | Texas on the Potomac:

Texas’ unemployment has remained stubbornly high. According to Bureau of Labor Statistics data, the state’s jobless rate increased from 8.1 percent in 2010 to 8.2 percent in June, while the unemployment rate in nearby states remained lower or dropped. And many of the new jobs in Texas have been government and low-wage  positions.

Though economists say Perry’s low-tax, low-regulation policies have helped the state’s economy, there are many other reasons why Texas’ economy is thriving while other states’ flail. Here are ten of them (excerpts):

1. Rising oil prices.

When oil prices are high, job growth in Texas historically has exceeded that of the nation, said Keith Phillips, the senior economist and advisor at the San Antonio branch of the Dallas Federal reserve. He said Texas entered the recession late and came out early, mirroring trends in oil prices, which rose towards the beginning of the recession, fell in 2009, but have been steadily rising since.

“If you look at what states were expanding, they are almost all the energy states,” he said. “When oil prices are high, our job growth is stronger relative to that of the nation.”

2. Government growth.

According to a recent Wall Street Journal article, employment in Texas’ public sector has grown more rapidly than the private sector recently, with a 19 percent growth in government jobs compared to 9 percent growth in private jobs since 2000. Texas has added more than one in five of the public-sector jobs nationwide at local, state and federal levels.

That trend will change with the implementation of the new state budget, which will make cuts to state spending to account for a state budget shortfall.

3. Military spending.

The federal government has significantly expanded its military spending in the decade since 9/11, and that has been good news for  Texas, home to major bases like Fort Bliss and Fort Hood.

“If there were military bases that expanded, there are government jobs that are being created,” Wial said, explaining that military spending has the potential to make a big impact on the Texas economy because beyond supplying jobs on the base,  it pumps money into the local economy.

4. No housing bubble.

Texas escaped the foreclosure bust that crippled other states’ economies — only 6 percent of Texas mortgage borrowers are in or near foreclosure, according to the Mortgage Bankers Association, while the national average is nearly 10 percent.

While nearby states like Arizona and Nevada face mortgage borrower foreclosure rates of 13 percent and 19 percent, respectively, Texas’ relatively stable market may have been a factor in preventing housing prices from climbing.

Some credit Texas’ stability to state  regulations on cash-out and home equity loans, which don’t allow borrowers to take out loans that total more than 80 percent of a home’s appraised value.

5. Cheap immigrant labor.

Texas has added more people than any other state during the past decade and now accounts for 8.1 percent of the U.S. population, up from about 7.4 percent  in 2000. The state has grown by 4.3 million people over the past ten years, and according to U.S. Census Bureau statistics Hispanic minorities account for 65 percent of that population increase.

Many of those new residents are immigrants from Mexico and Latin American countries who work at low wages and help keep wage averages throughout the state down. Because cheap labor is readily available in Texas, employers looking for low-wage employees are more likely to locate in the state, contributing to its economic growth.

Statistics support the states’ trend toward low pay, as many of the jobs Texas has added since the recession are low-wage. Texas is tied with Mississippi for the greatest percentage of minimum wage workers.

6. A young, consumer-oriented population.

Not only is Texas’ population expanding, but it is also young and has a tendency to spend more than most Americans on consumer goods. With one of the youngest populations in the country, the state benefits from the high consumption levels.

7. High-Tech industries.

[H]igh-tech industries weathered the recession better than other sectors of the economy, entering the downturn late and improving more quickly as consumer demand has ramped up.

Texas — home to many high tech industries — has benefited from that.

8. Fracking.

According to the Wall Street Journal, in 2000, 1 percent of the U.S. gas supplies were from shale, but now the figure is 25 percent. And as a result of the new technology, Texas is home to some of the most prosperous new oil fields in the country.

9. Texas Exports.

Texas is a big producer of products that either weathered the recession well or have rebounded quickly, including high-tech goods and oil and gas. Those goods have also been leading exports during the recovery, meaning that Texas has experienced an inflow of foreign capital even as other states lag behind pre-recession export levels.

“We’re a big export state,” Phillips said, explaining that Texas’ current export levels exceed the pre-recession peak by more than 12 percent. He said that advantage has helped the state’s overall economy to recover more quickly than other areas.

10. Drug Trafficking.

Jack Schumacher, a recently retired Texas-based DEA agent, told New York Magazine that at least half the drug shipments coming from Mexico stop and offload in Texas, where it is repackaged for sale elsewhere.

That means the money that comes with the drug trade also flows through Texas, driving consumption and investment in the state and possibly contributing substantially to the state’s economy.

Perry also claimed on Wednesday that the federal stimulus program was a failure. Really? That's ingrateful talk from a man whose state was saved by the federal stimulus program. Perry claims stimulus ‘failed,’ neglecting to note its usefulness to Texas | The Raw Story:

But that so-called failure is what let Perry and Texas Republicans balance the state's budget in 2009 and 2010, kept tens of thousands employed and ensured that hundreds of thousands continued to receive health benefits. Overall, $28.5 billion in federal assistance was sent to Texas, and officials used it to keep schools open, put more people to work on infrastructure projects and ensure children still received needed health care, among other things — all in spite of Perry's posturing against such measures.

Looks like this Texas turd blossom is all hat and no cattle.