The Perry Campaign
Perry's Texas jobs miracle: What's so great about low wages, high unemploymentand drug smuggling?
Rick PerryPhoto by Gage Skidmore
Paul KrugmanPhoto by Prolineserver
Since Rick Perry hit the campaign trail hard, he's been touting a platform of job creation.
After all, he can't very well rely on his other go-to positions, namely secession and the idea that problems can be prayed away. And there's a statistic that Perry and others are fond of throwing around — that Texas, and by extension, Perry, is responsible for 30 percent of the jobs created nationwide in the last two years.
Paul Krugman, the New York Times columnist and Nobel prize-winning economist, takes issue with that stat, arguing that Texas' job growth is not only unexamined, but impossible to recreate on a national scale.
As Tina Rosenberg reported, $27 billion in drug money flows across the United States' southwestern border, 60 percent of which is part of Texas. It's a tough industry to ignore.
In a recent column, Krugman writes that any admiration for Texas' job growth emanates from a misunderstanding of its relationship to population growth, which Texas has enjoyed in part because of its temperate climate, cheap housing and large immigrant population.
"Many of the people moving to Texas — retirees in search of warm winters, middle-class Mexicans in search of a safer life — bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low — almost 10 percent of Texan workers earn the minimum wage or less, well above the national average — and these low wages give corporations an incentive to move production to the Lone Star State.
"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.' The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs — which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice — involves a fallacy of composition: every state can’t lure jobs away from every other state."
But it's not all low-wage jobs, relaxed regulations and big oil.
New York magazine suggests there's another industry at work buoying the Texas economy — drugs.
As Tina Rosenberg reported in July, $27 billion in drug money flows across the United States' southwestern border, 60 percent of which is part of Texas. It's a tough industry to ignore.
Tell us: Do you think job creation in Texas is myth, or miracle?
