The lead editorial in June 10th Wall Street Journal highlights a "remarkable fact" from Richard Fisher, President of the Federal Reserve Bank of Dallas: 37% of all net new jobs since the start of the recovery have been created in Texas.
Why Texas? The Journal suggests a number of reasons: no state income tax, a flexible and contained regulatory system, a fiscally responsible state government, a right-to-work law and successful reform of its tort system. "Texas stands out for its free market and business-friendly climate."
Texas is among the few states that are home to more jobs than when the recession began. The others include North Dakota, Alaska and the District of Columbia.
Using Bureau of Labor Statistics (BLS) data, Dallas Fed economists looked at state-by-state employment changes since June 2009, when the recession ended. Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state. New York was second with 98,200, Pennsylvania added 93,000, and it falls off from there. Nine states created fewer than 10,000 jobs, while Maine, Hawaii, Delaware and Wyoming created fewer than 1,000. Eighteen states have lost jobs since the recovery began.
The data are even more notable because they're calculated on a "sum of states" basis, which the BLS does not use because they can have sampling errors. Using straight nonfarm payroll employment, Texas accounts for 45% of net U.S. job creation. Modesty is not typically considered a Texas virtue, but the results speak for themselves.
Texas is also among the few states that are home to more jobs than when the recession began in December 2007. The others are North Dakota, Alaska and the District of Columbia. If that last one sounds like an outlier at first, remember the government boom of the Obama era, which has helped loft D.C. payrolls 18,000 jobs above the pre-crisis status quo. Even so, Texas is up 30,800.
What explains this Lone Star success? Texas is a big state, but its population of 24.7 million isn't that much bigger than the Empire State, about 19.5 million. California is a large state too—36.9 million—and yet it's down 11,400 jobs. Mr. Fisher argues that Texas is doing so well relative to other states precisely because it has rejected the economic model that now prevails in Washington, and we'll second that notion.
Read the entire article here http://online.wsj.com/article/SB10001424052702304259304576375480710070472.html?KEYWORDS=Richard+Fisher.