Job Growth in Texas: Miracle or Curse?
It is no secret that the recession didn't hit Texas as hard as most of the country. Thanks to a strong energy sector and highly regulated home lending practices, Texas avoided mass unemployment and the housing bubble. And if you believe the hype, the "Texas Miracle" has attracted talent from across the country to help meet the demand created by our emerging job market.
While it is true unemployment in Texas remains significantly below the national level, 6.9 percent to 8.2 percent respectively, numbers are emerging that seem to verify what I have long suspected: Yes, Texas is creating a lot of new jobs, but they are not good jobs. In fact, most of these new jobs are making it impossible for hundreds of thousands of hard workers to make a living much less get ahead.
Here is the proof:
Texas Miracle = Abundance of Low Wage Jobs
Of the 5.9 million workers paid hourly rates in Texas in 2011, 259,000 earned exactly the prevailing Federal minimum wage of $7.25 per hour, while 214,000 earned less, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley Suchman noted that the 473,000 workers earning the Federal minimum wage or less made up 8.0 percent of all hourly-paid workers in the state. Nationwide, those earning the Federal minimum or less accounted for 5.2 percent of the hourly-paid workforce. (The Texas minimum wage is equal to the prevailing Federal minimum wage.)
In 2006, 173,000 hourly-paid workers earned the prevailing Federal minimum wage or less in the state–the lowest level since data were first available in 1998; they accounted for 3.0 percent of all workers paid an hourly wage. (See chart 1.) In 2007, the Federal minimum wage began increasing after holding steady for nearly a decade. The initial result in Texas was that more workers fell into this category, peaking at 550,000 in 2010.
Construction Jobs in Texas = Poor pay, poor conditions
Construction work in Texas is predominately low-wage work (45 percent of full-time workers live below the poverty line). Texas is the most deadly place for construction workers in the country, with a worker dying every 2.5 days, and it is estimated that 60 percent of the workforce is Latino.
Texas is creating jobs for the uneducated:
Keith Phillips, an economic policy advisor with the Federal Reserve Bank, said Texas has created jobs at twice the national average for decades because of several advantages: The low cost of living and doing business, as well as its high-tech and energy industries.
On the other hand, Texas ranks 30th in providing a skilled workforce and that could grow worse over the next two decades.
Today, 18 percent of the Texas workforce doesn't have a high school degree. By 2040, Phillips said, that could be as high as 30 percent.
Likewise, the percentage of Texans with college degrees is projected to drop from 18 percent to 13 percent.
These numbers confirm my worst fears. Texas is adding jobs, but they are not the types of jobs that will allow Texans to prosper. Rather they are the types of jobs that make it almost impossible for someone who works 40 hours a week to make ends meet.
Locally, it is great to read about new call centers and emerging retail markets, but these are not the types of jobs that support families. These are not the types of jobs that support growth. These are not the types of jobs that allow hard workers to get decent healthcare.
These are the types of jobs that allow workers to barely survive from check to check. Maybe. They certainly do not foster economic or educational growth for laborers.
When these new jobs offer competitive salaries, decent health care and upward mobility, I will buy into the Texas Miracle. Until then, I think we need to stop patting ourselves on the back for avoiding the recession and focus on real job creation. The type of job creation that lives up to the American Dream. If we do not do that, an entire generation of Texans will go to waste.
But that is just my opinion. What do you think about the Texas Miracle?