NCPA - National Center for Policy Analysis

The Texas Model

October 25, 2010

More than half of the net new jobs in the United States during the past 12 months were created in Texas, says Rich Lowry, editor of National Review.

  • According to the Bureau of Labor Statistics, 214,000 net new jobs were created in the United States from August 2009 to August 2010.
  • Texas created 119,000 jobs during the same period.
  • If every state in the country had performed as well, we'd have created about 1.5 million jobs nationally during the past year.

What does Austin know that Washington doesn't?  At its simplest:  Don't overtax and -spend, keep regulations to a minimum, avoid letting unions and trial lawyers run riot, and display an enormous neon sign saying, "Open for Business."

It's not as though Texas has been exempt from the Great Recession, says Lowry.

  • Its unemployment rate is 8.3 percent -- high, though beneath the national rate of 9.6 percent.
  • It faces a recession-driven shortfall of roughly $15 billion for its next two-year budget, a significant challenge to its low-tax ways.

But it has weathered the storm better than the nation, and better than its mammoth competitor on the West Coast.

  • A new Texas Public Policy Foundation report notes that Texas experienced a decline of 2.3 percent from its peak employment, while the nation declined 5.7 percent and California 8.7 percent.
  • During the past 12 months, California nearly canceled out Texas' job creation all by itself, losing 112,000 net jobs -- its unemployment rate is above 12 percent.

In Texas in recent decades, the watchwords have been prudence and stability in the course of nurturing a pro-business environment, while California has undergone a self-immolation that President Obama wants to replay nationally.  For policymakers wanting to restart the American jobs machine, keep in mind the Texas model, says Lowry.

Source: Rich Lowry, "The Texas Model," National Review, October 15, 2010.

For text:

For study:


Browse more articles on Economic Issues