NCPA - National Center for Policy Analysis


March 3, 2008

As Barack Obama and Hillary Clinton race around Ohio and Texas, they are telling a tale of economic woe.  Yet the real story isn't how similar the two states are economically but how different.  Texas has been prospering while Ohio lags, and the reasons are instructive about what works and what doesn't in economic policy, says the Wall Street Journal.

First, Texas's growth puts the lie to the myth that free trade costs American jobs:

  • Texas has gained 36,000 manufacturing jobs since 2004 and has ranked as the nation's top exporting state for six years in a row; its $168 billion of exports in 2007 translate into tens of thousands of jobs.
  • Ohio and neighbors are losing auto jobs, but many of these "runaway plants" are not fleeing to China, Mexico or India.
  • They've moved to more business-friendly U.S. states, including Texas, which in 2006 exported $5.5 billion of cars and trucks to Mexico and $2.4 billion worth to Canada.

But Ohio's most crippling handicap may be that its politicians -- and thus its employers -- are still in the grip of industrial unions, says the Journal:

  • Ohio is a "closed shop" state, which means workers can be forced to join a union whether they wish to or not.
  • Many companies -- especially foreign-owned -- say they will not even consider such locations for new sites.
  • States with "right to work" laws that make union organizing more difficult had twice the job growth of Ohio and other forced union states from 1995-2005, according to the National Institute for Labor Relations.

Meanwhile, Texas is a right to work state and has been adding jobs by the tens of thousands.  Nearly 1,000 new plants have been built in Texas since 2005, from the likes of Microsoft, Samsung and Fujitsu.  Foreign-owned companies supplied the state with 345,000 jobs.  No wonder Texans don't fear global competition the way some Presidential candidates do, says the Journal.

Source: Editorial, "Texas v. Ohio," Wall Street Journal, March 3, 2008.

For text: 


Browse more articles on Economic Issues