Tuesday, August 16, 2011

A Note on the Texas Unmiracle

Never too late to chime in on the Texas Unmiracle, which Paul Krugman wrote a column about, and then blogged, twice.

One particularly interesting aspect of The Texas Unmiracle is actually to look at jobs gained by sector, particularly comparing "free-market" Texas with "socialist" California during the recovery. Turns out that from it's employment trough in early 2010, California has gained 209,000 jobs, less than Texas's 349,000. Yet, 61% of the difference came from government employment alone. That's right, Texas added nearly 28,000 government jobs over this period, while California's government bled 57,600 jobs. The other main differential job gain was in "mining and logging" -- a sector which has bounced back nationally. And Texas employs 10 times as many workers in this sector to begin with... These two sectors, combined, already explain 93% of the difference in jobs gained.

Of course, one should keep in mind that California is a larger state, and so it "should" have gained about 40% more jobs. But of course, the differential jobs in government, mining and logging, and the impact of higher oil prices, and one would expect that differential gains in these sectors would feed into retail and construction.

Hence, to the extent that Texas has done well owes to the growth of government employment.

(All data SA, from BLS.)

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