Commentary: Texas job growth story isn't simple

The number is so big that it sounds like a tall tale: 48 percent of the net jobs created in the U.S. since the recovery have been in the Lone Star State.

That fact comes from the Federal Reserve Bank of Dallas, using non-farm payroll data from the Bureau of Labor Statistics and its own analysis. From June 2009 through April 2011, the country added 496,000 jobs, and the Dallas Fed says that 237,000 of them were in Texas.

Texas may be big, but only 8 percent of the workforce lives here, so its outsize job growth is giant indeed.

The question is: Why? Some are eager to credit the state's pro-growth policies: a small government with no state income tax, no tax increases of any kind, and limits on regulations and lawsuits.

That fits a popular political narrative, especially when presidential candidates -- and the Texas governor -- are running against Washington. But the explanation is not that simple.

The state also has immense natural resources, which benefit greatly from rising energy prices and breakthroughs in natural gas production. Exports are exploding.

As for taxes, the state actually raised taxes almost 25 years ago to invest in education. Rather than hurt the state, that set the table for job expansion.

Dallas Fed President Richard Fisher has been touting Texas' job growth recently. On Friday, The Wall Street Journal's editorial page said the Texas example "is a lesson in what works in economic policy."

It attributed Texas' success to rejecting the model that prevails in Washington, described as pushing for more unions, more central planning and higher taxes. The editorial didn't mention the impact from rising energy prices.

On Monday, Fisher spoke to Diane Rehm on National Public Radio, reiterating the same themes. He acknowledged that Texas has drawbacks, including poor social services and poor results in education.

"But something is working here, and what seems to be working here is job creation," Fisher said.

Several times, he said that Texas works under the same monetary policy, interest rates, federal rules and currency as the rest of the country -- and manages to consistently create more jobs than other states.

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