The Lookout

Texas job boom under Perry driven by government, energy and service sectors, numbers show

Zachary Roth
The Lookout

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Republican presidential candidate Texas Gov. Rick Perry eats a veggie corn dog as his wife Anita looks on at the …

When Texas Governor Rick Perry announced Saturday that he's running for the Republican presidential nomination, he boasted that 40 percent of the jobs that have been created in the United States over the last two years are in Texas. Using numbers that go back to June 2009, when the recession officially ended and the recovery began, Perry said the jobs are a testament to his business-friendly, low-regulation policies.

Since that figure (37 percent, to be precise) surfaced in June, there's been no shortage of efforts to explain it, with many arguing that Perry deserves less credit than he is taking. Some argue that the new jobs in Texas are mostly about rising oil prices, which have fueled an oil and gas boom. Others say the increase is a function of population growth and immigration. And still others point to the growth of government in Texas--including spending on the military, border security and the drug war.

But instead of speculating, let's look at the data. The Lookout used jobs data compiled by the Department of Labor to determine which industries have gained jobs in Texas since June 2009. Here's what we found:

• Roughly 39,000 out of the 302,000 new jobs created in Texas since the recovery began -- or 13 percent -- were in government. And 82 percent of those new government jobs were in local government. Texas's public sector has expanded by more than 2 percent in the past two years -- very nearly as fast as its private sector.

• Another 39,500 -- just over 13 percent -- were in oil and gas extraction, or in support activities for mining, a category that includes oil-field services companies.

• Even more -- 78,000, or 26 percent -- were in home health-care services or "ambulatory health-care services," while an additional 64,000, or 21 percent, were in "administrative and support services". Another 43,000, or 14 percent, were in "employment services."

• And 24,000, or 7.9 percent, were in "food services and drinking places" -- restaurants and bars, essentially.

Together, those categories account for nearly 95 percent of the new jobs created in Texas.

The manufacturing sector, which nationwide has seen renewed growth in recent years, has lost 1,800 jobs in Texas over the same period.

These numbers complicate Perry's story of a free-market paradise in the Lone Star State.

According to Ray Perryman, who runs a Waco-based economic analysis firm, the growth in local government hiring is thanks in part to federal stimulus money. But more important, he told The Lookout, is Texas's rapid population growth, which in turn has meant an increase in public-sector needs. "That's more of a follower than a driver of growth," Perryman said.

The increase in oil and gas and oil field services jobs isn't hard to explain. Oil has largely remained above $80 a barrel over the last two years, and the state's Eagle Ford shale formation has also allowed it to prosper from the fracking boom. Perryman said the numbers don't even include other industries -- engineering, for instance -- that are also dependent on the oil and gas business.

What about the other areas of growth? According to the job classification system the government uses, administrative and support service jobs are those that "support the day-to-day operations of other organizations" -- for instance, "general management, personnel administration, clerical activities, cleaning activities." Employment services jobs include temporary and other employment agencies.

According to William Rodgers, a former chief economist at the Department of Labor who now teaches at Rutgers University, the growth in temp jobs is in line with national trends. "One of the main sectors that we've seen adding a good chunk of the jobs has been the temp sector," Rodgers told The Lookout. Because consumer demand has been weak, he said, "employers are hesitant to hire full-time workers."

And Rodgers said that growth in these jobs, as well as in administrative, home health-care and especially food service jobs, along with the slight decline in manufacturing jobs, are not indicators of a healthy economy. "A large number of those jobs are part time, with lower wages," Rodgers told The Lookout, citing a trend we've also noted. "From a job quality standpoint, in terms of hours worked, and whether the job has health insurance and other benefits, one would have to say we've got to do a much better job, not only in the quantity but in the quality of the jobs."

Of course, these numbers don't tell us everything. It's impossible to say how many jobs one sector is ultimately responsible for, because the success of one sector frequently has a multiplier effect -- as when, say, growth in the oil and gas industry creates new jobs at restaurants and bars near drilling sites. Even the role of population growth isn't straightforward. Some observers have cited it to diminish the significance of Texas's job growth. If a state's population is increasing, they say, then so too will its total number of jobs. But Perry has argued that the increasing population is itself evidence of the state's strong economy: People are moving to Texas, he says, because of its sunny economic climate, not for the weather. Texas's unemployment rate, at 8.2 percent in June, is a percentage point below the national average.

Notes on methodology:
• We used data available online, compiled by the Bureau of Labor Statistics. These numbers differ from those cited in a recent short analysis by the Federal Reserve Bank of Dallas, which combined BLS data with its own data.
• We used numbers that were not seasonally adjusted, because seasonally adjusted numbers weren't available for every category. Because we were measuring movement from June 2009 to June 2011, the effect on results is negligible.

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