Dear Commons Community,
Now that Governor Rick Perry has entered the race for the Republican presidential nomination, we are going to be hearing a good deal about his accomplishments in Texas. He will likely present his economic successes especially job growth as a major reason why he is the right person for president at this time.
Today, NY Times columnist, Paul Krugman, reviews the economic situation especially the unemployment picture in Texas in his column entitled “The Texas Unmiracle.” He presents evidence that the Texas experience “offers no useful lessons on how to restore national full employment”. He points to the data that shows:
“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.”
Krugman goes on to establish that Texas is a leader in low-government regulation and low-paying jobs – “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.”
Krugman’s conclusion is that what has worked for Texas will not work nationally.
“The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs involves a fallacy of composition – every state can’t lure jobs away from every other state.”