As told by the Democrat Chair of the Texas Fed….
http://www.dallasfed.org/news/speeches/fisher/2011/fs110817.cfm
Texas’ Record of Job Creation
Here is a chart that displays nonagricultural employment growth by Federal Reserve Districts over the past 21½ years, using the employment levels of 1990 as a base of 100 and tracing job creation through June.
To illustrate a point, I am going to separate out three districts: the Second, headquartered at the New York Fed and consisting of New York, southwestern Connecticut, Puerto Rico, the U.S. Virgin Islands and a dozen counties in New Jersey; the Eleventh, represented by the Dallas Fed, made up of Texas, the wooded areas of eastern Louisiana and southern New Mexico; and the Twelfth, or the San Francisco Fed’s district, which consists of California, eight other states, the Northern Mariana Islands, American Samoa and Guam. The state of New York produces 72 percent of the economic output of the Second District; Texas accounts for 95 percent of the Eleventh District’s output; and California accounts for 62 percent of the Twelfth District’s output. One might consider this second chart to be an imperfect but reasonable proxy for the employment growth over the past two decades of the three largest states in the country.
Like the chart for employment in all 12 of the Fed’s districts, the three districts’ employment levels are indexed to 100 in 1990. You will see that, at the end of June, the index stands at 150 for the Eleventh District, 125 for the Twelfth and 103 for the Second. Nonagricultural employment growth in Texas has compounded at an annual rate of 1.95 percent over 21½ years; that of California at 0.57 percent; and New York’s at 0.19 percent. If you are interested in the output of their workers over this same period, the compound annual growth rate of Texas GDP is 3.6 percent; California’s is 2.59 percent; and New York’s 2.06 percent.
Now, let’s look at job creation in Texas since June 2009, the date that the National Bureau of Economic Research (or NBER, the body that “officially” dates when a recession starts and ends) declared the recent economic recession to have ended.
There are several ways to calculate Texas’ contribution to national job creation from June 2009 through the end of June 2011. One is to look at the number of jobs created by all 50 states, including those that have lost jobs since the nation’s anemic recovery began. Using this metric, through June of this year Texas has accounted for 49.9 percent of net new jobs created in the United States.
Another way to calculate Texas’ contribution to job creation is to lop off those states that have continued losing jobs and consider only those that have positive growth in employment these past two years. Using this metric, Texas has accounted for 29.2 percent of job creation since the recession ended.
These are the facts. You may select whichever metric you wish. Regardless, it is reasonable to assume Texas has accounted for a significant amount of the nation’s employment growth both over the past 20 years and since the recession officially ended.
This raises the obvious question―what kind of jobs are being created in Texas? Here are two charts that might help you form an opinion.
The first provides a breakdown of employment growth by sector since the recession ended, listing each employment sector by its weight in the employment mix of Texas. The most jobs have been created in the educational and health services sector, which accounts for 13.5 percent of Texas’ employment. The second-most jobs have been created in the professional and business services sector, which accounts for 12.5 percent of the Texas workforce. The mining sector, which includes support activities for both mining and oil and gas, employs 2.1 percent (yes, two-point-one percent) of Texas’ workers. In the second chart, you will see that these jobs are not low-paying jobs. The average weekly wage in the education and health services sector is $790; in the professional and business services sector it is $1,117; and in the mining sector, the average weekly wage is $2,271. Together these three sectors account for 68 percent of the jobs that have been created in Texas in the past two years.
I should point out that in 2010, 9.5 percent of hourly workers in Texas earned at or below the federal minimum wage, a share that exceeds the national average of 6 percent. California’s share was 2 percent and New York’s was 6.5 percent. Texas and New York do not have a state minimum wage that is higher than the federal minimum wage.[1] At least 17 states do have minimum wages that are above the federal level of $7.25; California’s minimum wage, for example, is $8.
The agricultural sector has a relatively high share of minimum wage workers. Approximately 2 percent of Texas’ workers are in the ag sector, whereas 1.1 percent of California’s workforce and a mere 0.5 percent of New York’s workforce are employed in agriculture. This is true especially in the border area, which also has many migrant workers and where the level of education is relatively low. Finally, Texas has a younger workforce than the nation, further boosting the share of minimum wage earners in the state. For example, the leisure and hospitality sector employs a disproportionate number of young people, and the average weekly wage in that sector is a very low $347.
So those are the facts. The Dallas Fed will henceforth be providing monthly updates on employment in Texas through our website at www.dallasfed.org. We hope it will be a useful tool for everyone ranging from columnists who write for the New York Times to the pundits who provide commentary for Fox News, as well as serious economists.
"Communism doesn't work because people like to own stuff." Frank Zappa
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