There’s an interesting piece on Quartz this morning that serves as a complement to Peter Simek’s musing yesterday about whether Texas’ Economic Miracle has faded away. Using data from the Quarterly Census of Employment and Wages, the story finds that national workers’ earnings jumped by about 24 percent from 1990 to 2015. And Texas had a lot to do with that.
The state has benefitted from globalization and the shale boom, yes, but it has diversified its industries far beyond the stereotype of oil and gas. The piece quotes Dallas Fed economist Pia Orrenius highlighting Dallas and Austin as technology hubs. She notes that the state has created “high-paying service sector and transportation jobs.” And, indeed, Texas saw its incomes spike by 32 percent over the 25-year period analyzed, about 2 percent each year. Dallas County’s income grew by 39.7 percent, about 2.3 percent each year. That’s about $19,351 more than workers were making in 1990; adjusted for inflation it comes to about half of that ($10,382).
The important thing to remember as it applies to wage growth is that this country is a mishmash of successes and failures. The wins in Texas and New York, the report notes, buoys the failures in Ohio and Michigan, the shuttered factories and the jobs lost to automation. Meanwhile, non-inflation adjusted wage growth is already sputtering nationwide. It’s here I go back to Peter’s piece: Texas has fallen from the No. 1 state for job growth to 10th. Its unemployment rate is now the 26th lowest, a collapse from the time it spent among the nation’s best. And the success the state’s companies have had with trade to other countries could get hampered by policies that come out of the Trump White House.
Texas has merely demonstrated that economies move in cycles. Part of the story of Texas’ slowing growth is declining energy prices. Other states have also started to rebound after sluggish recovery from the recession. Texas’ growth is still stronger than the national average, but it no longer stands out. And things could get worse if President Trump follows through on his promise on instituting a 20 percent border tax. Imports, Parker reminds us, make up around one dollar in every five dollars floating around in the Texas economy.
Texas has clearly had a hand in helping lift up the nation’s wage growth—if its trend toward middling and worse continues, it will be interesting to see how the nation’s earning growth responds without one of its largest buoys.
