In his column today, Paul Krugman dismantles the myth that Rick Perry's policies allowed Texas to escape the recession without feeling any economic pain.
The basic point: while Texas did indeed have more net job growth than other other parts of the country, it also had more net population growth, and during the recession, it's unemployment rate—and the total number of unemployed—have grown as well. Here's a chart Krugman posted on Friday illustrating how the unemployment rate in Texas is on par with that of New York or Massachusetts:
Texas boosters will nonetheless argue that that the unemployment isn't the right thing to look at. You have to look at overall job growth, they'll say, to which Krugman today
responds:
So Texas tends, in good years and bad, to have higher job growth than the rest of America. But it needs lots of new jobs just to keep up with its rising population — and as those unemployment comparisons show, recent employment growth has fallen well short of what’s needed.
If this picture doesn’t look very much like the glowing portrait Texas boosters like to paint, there’s a reason: the glowing portrait is false.
Still, does Texas job growth point the way to faster job growth in the nation as a whole? No.
What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.”
Undoubtedly, some Texas boosters will say that this means the U.S. as a whole should become more like Texas and reduce wages throughout the country so that we can compete with countries like China. Thanks to the differences between trade among states and trade among nations, they're wrong, but even if they weren't, it would be amusing to watch Republicans run a campaign centered on the premise that the solution to our economic challenges is to cut everybody's paycheck.
