"What all these great unemployment statistics really add up to, our lowest unemployment rate in nearly five years, a declining unemployment rate for four consecutive months and more than a quarter-million jobs added since this time last year, is that Texas is creating jobs and opportunity. Whether it's the steadily dropping unemployment rate or recent estimates that Texas will have billions left on hand at the end of the current biennium, the news continues to demonstrate that the Texas way of low taxes and individual freedom works. We've been the national epicenter for all kinds of job creation for over a decade, and all indications are that won't change anytime soon."
The news comes on the heels of Texas Comptroller Susan Comb's certification of 2014-15 projected revenues. That report came with news of a budgetary surplus in Texas, while the US federal budget faces yet another year of high deficits and increased federal debt.
The end of the state's fiscal year brings even more positive news. The president and CEO of the Dallas, TX Federal Reserve gave a speech praising Texas's economic policies and performance. Richard Fisher's full remarks, complete with charts and diagrams is available on the Federal Reserve Bank of Dallas's website in both html and pdf formats.
"Above all, Texas is a state of mind where people are ready to work and get things done for the betterment of their families, communities, cities and beyond. We should be proud, indeed, to call the Lone Star State our home."Below are some key excerpts from a transcript of Mr. Fisher's speech:
If the religious, spiritual, health, and family togetherness purposes are not enough to celebrate this holiday season, Texans can add the free and prosperous economic situation and that predicted for the New Year to the list of blessings.
The Success of the Lone Star StateHere’s why I believe Texas is attractive to even the Gen. Sheridans of the world. The state’s total output—the equivalent of gross domestic product—is approximately $1.4 trillion, in the neighborhood of countries like Australia and Spain. We produce more oil than Venezuela or Norway and more natural gas than Canada or all 28 countries of the European Union combined. And we produce jobs like gee-whiz. A job is the source of income and the root of security and wealth for a productive people. Without income a person cannot consume and invest, engaging the engines of economic growth. Most importantly, a job is the route to dignity as we have historically defined it in America.
Jobs, Jobs, JobsFor the past 23 years, Texas has outpaced the country in job creation by a factor of more than 2-to-1. Here is a slide that shows the percentage increase in jobs created by several large states and for the U.S. as a whole since 1990:
Note the dotted black line drawn from the base of 100 in 1990. For the residents of the home of Motown or the Empire State or the Land of Lincoln, this graph does not present a happy picture. Since 1990, total employment growth in Michigan has been 5 percent, a compound annual growth rate of 0.17 percent, a pace that is one-twelfth that of Texas over the same period. New York and Illinois have not fared much better.
If you zoom in on the period since the onset of the financial crisis, you can see an even greater disparity in employment growth trends for Texas vis-à-vis the other large U.S. states:
In terms of jobs, Texas was one of the last states to lose ground during the recession and then led the pack in punching through employment levels that prevailed at the end of 2007. Fortunately, all of the selected states shown in the chart appear to be recovering, albeit rather slowly, from licks taken during the crisis. However, even the Empire State can’t compare, despite its devotees of the perspective captured by Saul Steinberg’s iconic 1976 cover of New Yorker, “View of the World from Ninth Avenue,” depicting everything west of the Hudson River as a vast wasteland. Compared to the view in 1976, Texas stands tall above all the rest. Why is that?
Blessed to Be in TexasHere are some other facts and figures that help round out the economic picture of our state.
In the housing sector, Texas largely avoided the housing boom and bust that struck most of the nation. We did not experience a housing bubble:
Nor did we suffer a housing bust:
It helped that a 1997 amendment to the Texas Constitution allowed home equity loans and cash-out refinancing for the first time in the state’s history, but limited the amount of total debt (new loan plus the first mortgage) to no more than 80 percent of a home’s value. Combined with other factors such as ample land availability and fewer development and zoning restrictions, Texas housing stock increased during the last decade’s national boom without the rapidly rising home prices experienced elsewhere. With borrowing under control and house prices relatively stable, the state escaped the brunt of the housing sector fallout and experienced relatively few underwater mortgages: