Just hours after Rick Perry officially entered the presidential race last Saturday, liberals started to attack Texas’s economic record. Paul Krugman got the ball rolling in Sunday’s New York Times: “So what you need to know,” Krugman claimed, “is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment.” With the latest Gallup poll showing that just 26 percent of Americans approve of President Obama’s performance on the economy, liberals have little choice but to try to distort what is happening in Texas. To do so, they will have to rely on sleight of hand. Krugman continued:
In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts. . . .
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The Texas unemployment rate is indeed about one percentage point lower than the national average, and it is true that other states such as New York and Massachusetts have very similar rates.
But things in America are a lot worse than the unemployment numbers indicate, for the simple reason that many people have given up looking for work altogether, thus completely removing themselves from the labor force. This complicates the numbers, as people do not fall out of the “unemployed” column only when they get a job, but also when they stop looking for one. If we are to see a recovery, we will need to lower the unemployment rate by returning Americans to work. Unfortunately, job seekers’ simply giving up has been a hallmark of the Obama administration. During the Obama “recovery,” about 2.8 million Americans have given up and completely stopped looking for work.
This is why, even though Texas has created lots of jobs, its official unemployment rate is similar to those in “blue states” like New York and Massachusetts. It is a superficial similarity. While Texas’s labor force has grown by 350,000 since the recession ended in June 2009, Massachusetts’s has remained virtually unchanged, and New York’s has fallen by 140,000.
Keeping a similar unemployment rate to Texas’s isn’t quite the wonderful accomplishment it seems to be when so many people have given up looking for work. Eventually, the rest of the states will suffer a long-term unemployment problem that Texas won’t because, when the economy does recover, those who have given up looking for work will start looking again. When they do, they will quietly add themselves to the numbers and the disparity will become apparent.
I have never understood how its possible to simply stop looking for work and still survive. Does one give up eating? Give up sleeping under a roof? Take up crime?
John - You forgot one other thing (unless I missed it) - Texas has a very large illegal immigrant population and to the extent they get into the numbers, they will bring down the averages or the medians.
There is something else to watch for: a claim that Texas' schools are not as good because they have low scores in reading. When you compare average reading levels by grade in Texas schools you will see it has lower averages than many state. Thus during the standoff in Wisconsin, the teachers union (initially) was touting how well Wisconsin does in reading scores compared to Texas. Wisconsin spends a lot more per pupil than Texas. Well, someone decomposed the scores by grade and demographic (white, Hispanics and blacks). Turns out, each demographic in Texas in every grade outperformed the same demographic breakdown in Wisconsin. The difference is that Texas has a higher percentage of lower performing demographics than Wisconsin, hence the average in Texas is lower. When that was pointed to the teachers union it pulled the ad.
That is correct. As more jobs are created, more people swim across our border to create more demand for jobs. We also must admit the children of these people into our schools. If they can't speak English when they get here, they won't score well in reading comprehension and writing, will they?
Despite the unfunded mandates thrown onto the state by Obama and the democrat congress, and despite having to care for the illegals who stream across the river every day, Texas has a balanced budget and a few billion left over for the rainy day fund. The last fact is to head off the other stuff that will follow about the Texas budget.
Mother of 4 if you are married and one partner works the other partner might give up looking for work.
I know a couple in OH where the man drew unemployment for 99 weeks, then went out and got a job. The wife then managed to get fired and she is now drawing unemployment.
During the husbands unemployment they acquired two new cars, a Yorkie puppy for $2000 and a beautiful big screen TV. I can't wait to hear what they get while the wife is "unemployed".
One anecdote about abuse of unemployment says nothing about the system or it's utillity/necessity as a whole. It's truly intellectually dishonest to use these extreme anecdotes to make points that lack scientific/statistical support. All of the reliable scientific evidence says that cases of fraud and misuse are rare. Why not be honest about the real philosophical reasons why you don't like social programs, i.e. your social darwinism.
So before I could get to the 3rd paragraph I found myself asking, "When was the last time Krugman was even in Texas?" I, myself, feel very fortunate to be living here right now.
Have any of you ever been unemployed. You barely make enough to pay rent and buy groceries, much less buy a TV, a dog and a new car. That example is such an outlier. How many of the unemployed are doing that? So if less than 1 percent milk the system like that then that means EVERYONE must? And frankly it matters not how Rick Perrys economy is doing, he's a Christian fascist dominionist who wants to tell people how to think, who to marry and that he knows that God made us. He knows. The most intelligent people in the world wouldn't claim to know, but he knows.
Lott says you can't use the unemployment rate to compare the Texas labor market to that of New York or Massachusetts because discouraged workers are counted in the unemployment rate.
Problem: there's more than one unemployment rate. The one you see on TV each month is what's called U3. U1 and U2 don't concern us here, but U4 and U5 do, because they are the unemployment rates that DO count discouraged workers (U4 defines "discouraged worker" more tightly than U5, so that latter will be higher than the former).
So, do U4 and U5 tell a much different story than U3? No.
Here's U5 (with the more broadly defined discouraged workers thrown in):
New York: 10.1%
Texas: 9.3%
Massachusetts: 8.8%
And just to be thorough, here's U6 (with all discouraged workers plus those who are working part time because they can't get full time positions):
New York: 14.7%
Texas: 14.3%
Massachusetts: 13.7%
(Source: I feel somewhat mixed about this article.
Lott says you can't use the unemployment rate to compare the Texas labor market to that of New York or Massachusetts because discouraged workers are counted in the unemployment rate.
Problem: there's more than one unemployment rate. The one you see on TV each month is what's called U3. U1 and U2 don't concern us here, but U4 and U5 do, because they are the unemployment rates that DO count discouraged workers (U4 defines "discouraged worker" more tightly than U5, so that latter will be higher than the former).
So, do U4 and U5 tell a much different story than U3? No.
Here's U5 (with the more broadly defined discouraged workers thrown in):
New York: 10.1%
Texas: 9.3%
Massachusetts: 8.8%
And just to be thorough, here's U6 (with all discouraged workers plus those who are working part time because they can't get full time positions):
New York: 14.7%
Texas: 14.3%
Massachusetts: 13.7%
Note: Those interested in state comparisons should go to the link. Texas does do (a little) better than both New York and Massachusetts in terms of long-term unemployment (U1) and those who have completed temporary jobs (U2).
No matter how you define discourage workers, counting them in with the unemployed who aren't discouraged doesn't change a thing: Texas is a little worse than Massachusetts and a little better than New York (assuming the differences are statistically significant, to which I cannot speak).
His other questionable claim is that GDP per capita is a better measure of living standard than is income per capita. His point about children being taken into account in the latter and not the former is well taken. However, in eliminating one problem, he creates another: GDP is the total value of what gets created (whether by labor or by capital), whereas income (I believe) only covers what goes to labor. Texas is disproportionately dominated by oil, which is very capital intensive. If an unusually large share of this GDP is walking out the door to other states as payments to capital, it's really not relevant here.
Still, his treatment of one of the biggest questions on this topic (does labor moving to Texas cause jobs or do jobs cause labor to move to Texas) was interesting. And his treatment of the role oil plays the whole affair (other than as noted above) was quite strong.
One other important consideration is the imigration question. For example, Wisconsin lost 28,000 people to imigration last year. If we can assume that a number of these were unemployed and they moved to Texas, which actually had an increase of 179,000 immigrants last year, then the unemployment numbers in Texas are worse than what they actually would be. One statistic I saw said that if you take out immigration Texas actually would have an unemployment rate of 2.8%.
The beauty of this article is that it proves with facts and underlying realities that the usual media sources are nothing more than mouthpieces for the liberal agenda of the Democrats.
The media and the democrats are doing evertyhing in their power to undermine all viable Republican candidates. Unscrupulous tactics are the only kind they know, it seems. In other words, they distort facts at every turn and latch on to outright lies, if it helps their cause.
It baffles me how people can ignore facts. Here's one, for example. When a Republican is the President, the news is all about every bad little thing they can tout about the man in the White House. Under Democrat rule, such as Obama, the whole country could be falling apart and there's hardly a peep about it, since it reflects badly on their candidate and their cause.
Republicans who pose a threat because they're "the real deal" that Americans are looking for are demonized by the media. Meanwhile, Democrats get a complete pass as they knock out the foundation that has made America the great country it is. It's pitiful.
@blsdaniel: There's another reason for Texas' unemployment rate being similar to NY or MA: As the labor force is fluid, NY/MA's unemployed can migrate out of the state (LOWERING the total # of unemployed there), into job-creating states like TX (ADDING, at least temporarily, to the unemployment rate there). Looking at the massive number of new jobs created in Texas, it's obvious to see how people have flowed in from other (jobless, underperforming) states. As people flow into Texas, unemployment "drops" in underperforming states. In a sense, Texas is acting like an escape valve, soaking up the unemployed from other states, making their numbers look better. But if populations remained static, unemployment would be far greater in California, New York, Michigan, and significantly lower in Texas. I suggest you check out the numbers here: External Link
blsdaniel, you are misreading everything that Lott wrote. Take something simple as your claim: "His other questionable claim is that GDP per capita is a better measure of living standard than is income per capita." Lott was specifically arguing that you can't claim that people in Texas are earning less than those in other states by looking at per capita income when there are a lot of children. That isn't a deep point. Young kids don't work, right? More kids also mean more people earning the minimum wage, right? But presumably they earn more than that once they get older. Now does that mean that as you have a lot more kids that you don't have less money to spend per person? Sure, but the claims about minimum wages and income are what Lott was addressing.
You have also distorted what he wrote about unemployment rates. Let me make it simple for you. Texas has a lower than average unemployment rate and a rate similar to the rate in the states that Krugman selected despite absorbing a huge influx of population from other places. None of the measures that you point to deal with this influx of population. You have completely missed the point.
blsdaniel, you are misreading everything that Lott wrote. Take something simple as your claim: "His other questionable claim is that GDP per capita is a better measure of living standard than is income per capita." Lott was specifically arguing that you can't claim that people in Texas are earning less than those in other states by looking at per capita income when there are a lot of children. That isn't a deep point. Young kids don't work, right? More kids also mean more people earning the minimum wage, right? But presumably they earn more than that once they get older. Now does that mean that as you have a lot more kids that you don't have less money to spend per person? Sure, but the claims about minimum wages and income are what Lott was addressing.
You have also distorted what he wrote about unemployment rates. Let me make it simple for you. Texas has a lower than average unemployment rate and a rate similar to the rate in the states that Krugman selected despite absorbing a huge influx of population from other places. None of the measures that you point to deal with this influx of population. You have completely missed the point.
J.D.,
How exactly did someone get fired and collect unemployment? One cannot collect unemployment if they were terminated with cause. Or did you mean she was laid off, and entirely different situation.
