Texas Isn’t Just Creating Low-Paying Jobs

The state's economic growth hasn't just benefited the highest and lowest ends of the pay scale.

Graph from the Fed study.
Graph from the Fed study.

We already know that Texas has outpaced the rest of the nation when it comes to adding jobs since 2000 and especially since the Great Recession of 2007-09. The knock on our state, however, has been that supposedly the bulk of that job growth has come on the low-pay end of the spectrum.

The fact that Texas is second only to Idaho in the percentage of hourly workers getting minimum wage (7.5 percent, compared to 4.9 percent nationally), that it rates near the top among states for income inequality, and has the highest share of residents without health insurance would suggest that this perspective of most Texans slaving away for little money is right.

However, a study this week out of the Federal Reserve Bank of Dallas says that Texas’ job growth across all wage levels has been much more proportionally distributed than in the rest of the nation. While some states are managing to add jobs at the high and low ends of the pay scales, Texas is distinct in also seeing middle-class positions on the rise this century.

Texas has also created more “good” than “bad” jobs. Jobs in the top half of the wage distribution experienced disproportionate growth. The two upper wage quartiles were responsible for 55 percent of net new jobs. A similar pie chart cannot be made for the rest of the U.S., which lost jobs in the lower-middle quartile over the period.  Between 2000 and 2013, Texas household survey employment overall grew 24.9 percent, while employment in the rest of the U.S. expanded just 4.7 percent.