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Miracle or Myth: The Real Story of Job Creation
& Economic Recovery in Texas
TEDC 2013 Annual Conference
2020 Vision | San...
Miracle or Myth?
“We’re sending the message that
this is a state where you can risk
your capital and know that you can
hav...
Summary
• Evaluating performance of the Texas economy
through lens of wealth creation reveals much
more nuanced picture th...
The “Miracle”

October 17, 2013 | TEDC 2013 Annual Conference
Explaining the Texas “Miracle”
• Primary industry resiliency—manufacturing &
energy—combined with multiplier effect
• Grow...
Post-Recession GDP Growth ($)

October 17, 2013 | TEDC 2013 Annual Conference

Source: US Bureau of Economic Analysis, 200...
Job Creation
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%

Texas

US

Source: EMSI, US Bureau of Labor Statistics. Full-ti...
Job Creation
Expansion Recession Recovery
2004-2007 2008-2009 2010-2013
Texas

US
TX Share

908,382

-303,219

882,621

6,...
Post-Recession Job Change (#)

October 17, 2013 | TEDC 2013 Annual Conference

Source: US Bureau of Labor Statistics (CES)...
Job Creation
Expansion
2004-2007

Recession
2008-2009

Recovery
2010-2013

US

TX

US

TX

US

TX

8%

38%

-2%

2%

10%

...
Job Growth in Regional Offices, 2004-07

Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (...
Job Growth in Manufacturing, 2004-07

Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCE...
Population Growth
3.0%
2.5%

2.0%

Texas

1.5%
1.0%
0.5%

US

0.0%

Source: EMSI, US Census Bureau

October 17, 2013 | TED...
Net Migration to Texas (# People), 2000-10
200,000
180,000

Total, 2000-10

160,000

Florida

People

% Pop

1,146,917

6....
Net Migration to Texas (# People), 2000-10

Source: Internal Revenue Service, 2000-2010. Data includes only tax filers.

O...
The “Myth”

October 17, 2013 | TEDC 2013 Annual Conference
“Miracle” talk concealing blind spots?
• Texas ranks 35th in jobs per 100 residents—is
job growth keeping pace with popula...
Enough Jobs? (Jobs Per 100 Residents)
States

2012

Texas Counties

2012

1. District of Columbia

115.7

1. Kenedy

117.6...
Wealth: GDP Per Capita ($)

Source: US Bureau of Economic Analysis, 2012.
Adjusted for inflation ($2005 chained).

October...
Wealth: Per Capita Income ($ Adj)

October 17, 2013 | TEDC 2013 Annual Conference

Source: US Bureau of Economic Analysis,...
Unemployment Rate (%)

Source: US Bureau of Labor Statistics (CES), July 2013.
Not seasonally adjusted.

October 17, 2013 ...
Unemployment Rate (%)
Starr
Zavala
Sabine
Willacy
Hale
Maverick
Presidio
Newton
Hidalgo
Loving
Jefferson
San Augustine
Mat...
Unemployment by Education (%)
20
TX

US

No High School Diploma

21%

16%

16

High School Diploma

25%

28%

14

Some Col...
Population Age 25+ by Education
TX County

No HS Diploma

HS Diploma

Total

Liberty

26%

40%

66%

Cameron

37%

25%

61...
http://taxfoundation.org/article/2014-state-business-tax-climate-index

October 17, 2013 | TEDC 2013 Annual Conference
The Opportunity

October 17, 2013 | TEDC 2013 Annual Conference
Population by Age Cohort
Age Group

Share of Total
Share of Total
% Pop US
Pop Growth % Pop TX
Pop Growth
2013
2001-13
201...
Economic Development

October 17, 2013 | TEDC 2013 Annual Conference
Key Priorities
• Get away from miracle/myth debate & raise
awareness about what data is really saying
about state and loca...
Source: Area Development Online, 27th Annual Corporate Survey

October 17, 2013 | TEDC 2013 Annual Conference
Source: Area Development Online, 27th Annual Corporate Survey

October 17, 2013 | TEDC 2013 Annual Conference
Texas EDC Expenditures (2010-11)

EDCs spent approximately $735.6 million in 2011 (60% Type B, 40% Type A), compared
to $3...
Brian Kelsey
Civic Analytics LLC
3420 Executive Center Drive
Suite 300
Austin, TX 78731
brian@civicanalytics.com
Thanks to...
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Miracle or Myth: The Real Story of Job Creation & Economic Recovery in Texas

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Brian Kelsey's presentation at the TEDC 2013 Annual Conference in San Antonio on October 17, 2013.

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Miracle or Myth: The Real Story of Job Creation & Economic Recovery in Texas

  1. 1. Miracle or Myth: The Real Story of Job Creation & Economic Recovery in Texas TEDC 2013 Annual Conference 2020 Vision | San Antonio October 17, 2013
  2. 2. Miracle or Myth? “We’re sending the message that this is a state where you can risk your capital and know that you can have a chance to have a return on investments. It’s a reason that we’re leading the nation in job creation.” “People are fleeing high tax, high regulatory states to come and be a part of what some people refer to as the Texas Miracle. It’s not a miracle, as a matter of a fact, it’s just common sense.” Governor Rick Perry Sources: Newsmax, The Washington Times October 17, 2013 | TEDC 2013 Annual Conference St. Louis Post-Dispatch via Associated Press “Texans would be well served if Gov. Perry spent a little more time in Texas fixing the state’s systemic economic problems and a little less time boasting to out-of-state voters and businesses about a Texas miracle that never was.” DNC spokesperson
  3. 3. Summary • Evaluating performance of the Texas economy through lens of wealth creation reveals much more nuanced picture than “miracle/myth” • Growing lack of seriousness about connection between public investment & performance of state & local economies is a serious threat • Educating residents & businesses about EDC return on investment is critical priority October 17, 2013 | TEDC 2013 Annual Conference
  4. 4. The “Miracle” October 17, 2013 | TEDC 2013 Annual Conference
  5. 5. Explaining the Texas “Miracle” • Primary industry resiliency—manufacturing & energy—combined with multiplier effect • Growth in regional offices, especially leading up to recession during 2004-2007 • Population growth accelerated the expansion and dampened the downturn October 17, 2013 | TEDC 2013 Annual Conference
  6. 6. Post-Recession GDP Growth ($) October 17, 2013 | TEDC 2013 Annual Conference Source: US Bureau of Economic Analysis, 2009-2012. Data in table is in millions of dollars. Not adjusted for inflation.
  7. 7. Job Creation 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Texas US Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCEW). October 17, 2013 | TEDC 2013 Annual Conference
  8. 8. Job Creation Expansion Recession Recovery 2004-2007 2008-2009 2010-2013 Texas US TX Share 908,382 -303,219 882,621 6,087,873 -6,197,819 5,986,592 15% Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCEW). October 17, 2013 | TEDC 2013 Annual Conference 5% 15%
  9. 9. Post-Recession Job Change (#) October 17, 2013 | TEDC 2013 Annual Conference Source: US Bureau of Labor Statistics (CES), June 2009-July 2012. Data in left table is in thousands of jobs. Not seasonally adjusted.
  10. 10. Job Creation Expansion 2004-2007 Recession 2008-2009 Recovery 2010-2013 US TX US TX US TX 8% 38% -2% 2% 10% 13% Mining, Quarrying, and Oil and Gas Extraction 27% 36% -10% -11% 25% 40% Professional, Scientific, and Technical Services 13% 20% -4% -4% 9% 14% Construction 9% 19% -17% -11% 5% 12% Accommodation and Food Services 7% 12% -3% 0% 9% 14% Retail Trade 3% 7% -5% -3% 4% 8% -3% 5% -12% -9% 4% 7% Management of Companies and Enterprises Manufacturing Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCEW). October 17, 2013 | TEDC 2013 Annual Conference
  11. 11. Job Growth in Regional Offices, 2004-07 Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCEW). October 17, 2013 | TEDC 2013 Annual Conference
  12. 12. Job Growth in Manufacturing, 2004-07 Source: EMSI, US Bureau of Labor Statistics. Full-time, wage & salary jobs only (QCEW). October 17, 2013 | TEDC 2013 Annual Conference
  13. 13. Population Growth 3.0% 2.5% 2.0% Texas 1.5% 1.0% 0.5% US 0.0% Source: EMSI, US Census Bureau October 17, 2013 | TEDC 2013 Annual Conference
  14. 14. Net Migration to Texas (# People), 2000-10 200,000 180,000 Total, 2000-10 160,000 Florida People % Pop 1,146,917 6.1% Texas 939,184 3.7% 140,000 Georgia 607,872 6.3% 120,000 North Carolina 554,912 5.8% Arizona 548,539 8.6% Illinois -533,582 4.2% 100,000 80,000 California -1,160,601 3.1% 60,000 New York -1,319,239 6.8% 40,000 20,000 0 Source: Internal Revenue Service, 2000-2010. Data includes only tax filers. October 17, 2013 | TEDC 2013 Annual Conference
  15. 15. Net Migration to Texas (# People), 2000-10 Source: Internal Revenue Service, 2000-2010. Data includes only tax filers. October 17, 2013 | TEDC 2013 Annual Conference
  16. 16. The “Myth” October 17, 2013 | TEDC 2013 Annual Conference
  17. 17. “Miracle” talk concealing blind spots? • Texas ranks 35th in jobs per 100 residents—is job growth keeping pace with population? • Texas is well outside top states in measures of wealth creation—(1) are we creating enough high-paying jobs? (2) is workforce adequately prepared for growing skill requirements? • 40 counties in TX have higher unemployment than US, including 15 at 10% or greater October 17, 2013 | TEDC 2013 Annual Conference
  18. 18. Enough Jobs? (Jobs Per 100 Residents) States 2012 Texas Counties 2012 1. District of Columbia 115.7 1. Kenedy 117.6 2. North Dakota 61.4 2. Carson 77.1 3. Nebraska 51.8 3. Loving 70.4 4. Minnesota 50.7 4. McMullen 63.9 5. Wyoming 50.3 5. Gregg 63.8 6. South Dakota 49.7 250. Wilson 15.0 7. Massachusetts 49.3 251. Bandera 14.4 8. Iowa 49.1 252. Clay 13.7 9. Wisconsin 48.6 253. Newton 11.9 10. Vermont 48.4 254. San Jacinto 35. Texas 41.8 48. Bexar Source: US Bureau of Labor Statistics (CES). Data seasonally adjusted. October 17, 2013 | TEDC 2013 Annual Conference 7.9 42.0
  19. 19. Wealth: GDP Per Capita ($) Source: US Bureau of Economic Analysis, 2012. Adjusted for inflation ($2005 chained). October 17, 2013 | TEDC 2013 Annual Conference
  20. 20. Wealth: Per Capita Income ($ Adj) October 17, 2013 | TEDC 2013 Annual Conference Source: US Bureau of Economic Analysis, 2011. Adjusted for inflation ($2005 chained) and purchasing power parity.
  21. 21. Unemployment Rate (%) Source: US Bureau of Labor Statistics (CES), July 2013. Not seasonally adjusted. October 17, 2013 | TEDC 2013 Annual Conference
  22. 22. Unemployment Rate (%) Starr Zavala Sabine Willacy Hale Maverick Presidio Newton Hidalgo Loving Jefferson San Augustine Matagorda Orange Cameron 15.0 14.9 14.3 13.8 12.0 11.8 11.8 11.1 10.8 10.6 10.2 10.2 10.0 10.0 10.0 Source: TWC, August 2013. Not seasonally adjusted. 40 counties in Texas currently have higher unemployment rates than US (Aug 2013). October 17, 2013 | TEDC 2013 Annual Conference Source: EMSI
  23. 23. Unemployment by Education (%) 20 TX US No High School Diploma 21% 16% 16 High School Diploma 25% 28% 14 Some College/Assoc Deg 28% 28% 12 Bachelor's Degree + 26% 28% 18 Population Age 25+ 10 8 6 4 2 Jan-92 Oct-92 Jul-93 Apr-94 Jan-95 Oct-95 Jul-96 Apr-97 Jan-98 Oct-98 Jul-99 Apr-00 Jan-01 Oct-01 Jul-02 Apr-03 Jan-04 Oct-04 Jul-05 Apr-06 Jan-07 Oct-07 Jul-08 Apr-09 Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 0 High School Diploma Bachelor's Degree + No High School Diploma Some College/Associate Degree Source: US Census Bureau (ACS), 1992-2013 October 17, 2013 | TEDC 2013 Annual Conference
  24. 24. Population Age 25+ by Education TX County No HS Diploma HS Diploma Total Liberty 26% 40% 66% Cameron 37% 25% 61% Hidalgo 36% 24% 61% Webb 37% 23% 60% Walker 19% 38% 57% Henderson 19% 36% 55% Ector 26% 28% 54% Hunt 17% 35% 52% Angelina 19% 33% 52% Harrison 16% 35% 51% Bastrop 18% 33% 51% Potter 24% 26% 51% San Patricio 23% 27% 51% October 17, 2013 | TEDC 2013 Annual Conference 31% of job openings in TX between 2013 and 2020 will require postsecondary education (including 10% < four-year degree). 68% of job openings in occupations with median wage of at least $18 per hour in TX between 2013 and 2020 will require postsecondary education (including 17% < four-year degree). Source: EMSI, BLS Source: US Census Bureau (ACS), 2012
  25. 25. http://taxfoundation.org/article/2014-state-business-tax-climate-index October 17, 2013 | TEDC 2013 Annual Conference
  26. 26. The Opportunity October 17, 2013 | TEDC 2013 Annual Conference
  27. 27. Population by Age Cohort Age Group Share of Total Share of Total % Pop US Pop Growth % Pop TX Pop Growth 2013 2001-13 2013 2001-2013 Next generation (< 25) 33% 16% 37% 31% Primary working (25-44) 26% -4% 28% 16% Mid-late career (45-69) 31% 77% 28% 46% Retired (70-79) 6% 5% 5% 5% Elderly (80+) 4% 7% 3% 3% Texas accounted for 16% of total US population growth during 2001-2013, but 32% of the next generation (< 25) age cohort. October 17, 2013 | TEDC 2013 Annual Conference
  28. 28. Economic Development October 17, 2013 | TEDC 2013 Annual Conference
  29. 29. Key Priorities • Get away from miracle/myth debate & raise awareness about what data is really saying about state and local competitiveness • Clearly make case for greater investment in assets that drive economic development • Improve understanding of EDC activities and ROI to Type A and Type B corporations October 17, 2013 | TEDC 2013 Annual Conference
  30. 30. Source: Area Development Online, 27th Annual Corporate Survey October 17, 2013 | TEDC 2013 Annual Conference
  31. 31. Source: Area Development Online, 27th Annual Corporate Survey October 17, 2013 | TEDC 2013 Annual Conference
  32. 32. Texas EDC Expenditures (2010-11) EDCs spent approximately $735.6 million in 2011 (60% Type B, 40% Type A), compared to $33.8 billion the state received in total sales and gross receipts tax revenue (2%). http://www.texasahead.org/lga/EDC_Reports/edcr2011/edcr2011.pdf October 17, 2013 | TEDC 2013 Annual Conference
  33. 33. Brian Kelsey Civic Analytics LLC 3420 Executive Center Drive Suite 300 Austin, TX 78731 brian@civicanalytics.com Thanks to EMSI for making data 512-731-7851 available for this presentation. http://civicanalytics.com @civicanalytics October 17, 2013 | TEDC 2013 Annual Conference

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