Posted on Wed, Aug. 17, 2011
last updated: August 17, 2011 12:39:29 PM
Does the Texas job machine have a fatal flaw?
As Gov. Rick Perry ramps up his campaign for the presidency, critics are seizing on the fact that the state has created hundreds of thousands of minimum-wage jobs during his tenure, including many without benefits.
Texas and Mississippi have the highest share of this low-paid workforce: 9.5 percent of all hourly employees were paid the minimum wage or less last year, compared with 6 percent of workers nationwide.
"If you want a bad job, go to Texas," state Rep. Garnet Coleman, D-Houston, told The Huffington Post, a liberal-leaning news website.
HuffPo's Jason Cherkis took a shot at Texas' so-called economic miracle: "The miracle is that anyone would call minimum-wage jobs a miracle."
In The New York Times, five writers debated the Texas job juggernaut, and one headline captured this theme: "Texas or the Third World?"
There is some truth in the analyses, because the number of minimum-wage workers here has surged since the recession. Last year, 550,000 Texans were paid the minimum wage or less, up from 173,000 in 2006, according to the Bureau of Labor Statistics.
In addition, 1 in 4 Texas residents has no health insurance, the highest rate in the country. Perry has done little to address that problem.
But you can't blame the governor for national, even global, trends that are buffeting the labor market. A deep contraction in manufacturing and construction likely contributed to the rise in low-paid workers. And a boost in the federal minimum wage also moved more Texas employees into that category.
Those changes affected the entire country, and the ranks of minimum-wage workers increased sharply nationwide. They grew more in Texas, because everything grew more here. Since Perry became governor in December 2000, Texas has added more than 1 million jobs, while the country has lost 1.3 million.
Just as important, in my view, is that Texas has been a powerhouse in creating some of the most desirable jobs -- and in luring major employers to the state.
Under Perry, Texas has added almost 200,000 jobs in professional and business services. That's a 17 percent gain, compared with a 2 percent increase for the U.S. as a whole. And the hourly pay in this sector is significantly higher than the state average for all private workers.
Healthcare and government each accounted for more than 300,000 new jobs during Perry's tenure. Mining, which includes oil and gas exploration, added almost 93,000, an increase of 63 percent.
Financial activities, another high-paying sector, added almost 55,000 workers. That was more than retail trade, whose employment base is twice as large.
The leisure and hospitality business, which pays an average of just $12 an hour, added 207,000 workers since the end of 2000. But is that really something to apologize for?
"There's a huge disconnect here," said Bob Duvic, a senior lecturer at the McCombs School of Business at the University of Texas at Austin. "When I was growing up, my father told me to look for honest work -- it wasn't about a good job or a bad job. I worked for the minimum wage for a while, and there was no shame in it.
"Everyone can't be a Ph.D.," he added. "And Texas is growing all sorts of jobs."
Average wages are lower in Texas than in the rest of the nation, which lends some credence to the criticism. But that's largely due to low pay and high poverty rates near the Texas-Mexico border and in rural parts of West Texas.
Improving education and healthcare, especially in those areas, has been a constant challenge for state leaders. Perry's critics would get more traction by focusing on those shortcomings, rather than the quality of jobs created here.
In Texas' major metropolitan areas, wages are competitive. The average for all private workers in the Dallas-Fort Worth-Arlington region is $23.61 an hour, according to data from the Bureau of Labor Statistics.
That compares with $22.97 for the nation and $21.69 for all of Texas.
By another measure, a pay index of 77 metro areas by the bureau, this region ranked solidly in the middle. DFW scored a 98 last year, with 100 being the average. Houston (99) and Austin (94) were near the benchmark, while pay in Corpus Christi (90) and Amarillo (88) was significantly less.
Brownsville, with an index score of 80, was the lowest on the list. The index for the San Jose-San Francisco area was 120, indicating that employers there were paying a 20 percent premium for workers.
Texas avoided the worst of the recession, giving Perry bragging rights, even though the unemployment rate is now higher than some other large states. And there was no dodging the long, steady decline in manufacturing, which pays especially well for workers without a college degree.
Since Perry took over, Texas has lost 236,000 manufacturing jobs, a decline of 22 percent. Nationwide, the country lost more than 5.4 million manufacturing jobs in the same time, a drop of 32 percent.
As more manufacturing moved abroad, it was inevitable that many workers would end up in lower-paying jobs.
"That's life in a global economy," Duvic said. "But we still shouldn't be sneering at minimum-wage jobs."
Perry is running on his record as a job creator. He's been a tireless defender of the state's business-friendly practices, including limited regulation, tort reform and no state income tax. But he has also benefited from many factors beyond his control: a rise in energy prices, the development of shale gas and a surge in government hiring, including big increases in defense spending.
Still, he has no reason to run from his record on minimum-wage jobs. It's just one part of the story.