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<H1 property="dc.title">Perry criticizes government while Texas job growth
benefits from it</H1>
<H3 property="dc.creator">By Michael A. Fletcher, <SPAN
class="timestamp updated processed" epochtime="1313868221000"
datetitle="published" pagetype="leaf" contenttype="article">Published:
August 20</SPAN> </H3>
<P>LONGVIEW, Tex. — Texas <A
href="http://www.washingtonpost.com/politics/rick-perry-announces-he-will-join-2012-presidential-field-to-challenge-president-obama/2011/08/13/gIQA3TSODJ_story.html">Gov.
Rick Perry</A> has leapfrogged to the <A
href="http://www.washingtonpost.com/politics/republican-race-snaps-into-focus-with-unlikely-top-tier-of-romney-bachmann-perry/2011/08/14/gIQAbiwvFJ_story.html">top
tier</A> of Republican presidential candidates largely on the strength of one
compelling fact: During more than a decade as governor, his state created more
than 1 million jobs, while the nation as a whole lost 1.4 million jobs.</P>
<P>Perry says the <A
href="http://www.washingtonpost.com/politics/perry-romney-offer-a-contrast-on-job-creation-approach/2011/08/16/gIQAun4nLJ_story.html">“Texas
miracle”</A> rests on conservative pillars that he would bring to the White
House: minimal regulation and government, low taxes and a determination to limit
the reach of Uncle Sam.</P>
<P>What he does not say is that much of that job growth has come because of
government, not in spite of it.</P>
<P>With a young and fast-growing population, a large and expanding military
presence and an influx of <A
href="http://www.recovery.gov/Transparency/agency/Pages/StateTotalsByAgency.aspx">federal
stimulus money</A>, the number of government jobs in Texas has grown at more
than double the rate of private-sector employment during Perry’s tenure.</P>
<P>The disparity has grown sharper since the national recession hit. Between
December 2007 and last June, private-sector employment in Texas declined by
0.6 percent while public-sector jobs increased by 6.4 percent,
according to the federal Bureau of Labor Statistics. Overall, government
employees account for about one-sixth of the workforce in Texas. </P>
<P>The significant role of government in Texas’s relative prosperity stands in
stark contrast to the “go-it-alone” image cultivated by Perry, who credits a
lack of government interference for fostering a business-friendly environment in
Texas.</P>
<P>“The fact is, government doesn’t create jobs, otherwise the last
2<SUP>1</SUP> <SPAN>/</SPAN> <SUB>2 </SUB>years of stimulus would have worked,”
Perry said this month in a speech to the National Conference of State
Legislatures. “Government can only create the environment that allows the
private sector to create jobs. The single most important contributor to our
jobs-friendly climate here in Texas is our low tax burden, because we know
dollars do far more to create jobs and prosperity in the people’s hands than
they do in the government’s.”</P>
<P>Perry has criticized Washington for “thumbing its nose” at the American
people. In announcing his candidacy for president last weekend, Perry said he
would “work every day to make Washington, D.C., as inconsequential in your life
as I can.”</P>
<P>Mark Miner, a Perry spokesman, said the governor’s job-creation record speaks
for itself. He also said the state received less per capita — about $1,000 per
resident vs. more than $1,400 in New York and $1,200 in California — than most
other states from the stimulus plan while still producing more jobs. </P>
<P><STRONG>Population boom</STRONG> </P>
<P>Analysts call the growth in government employment in Texas a natural
consequence of the surging population, which has grown by more than
20 percent in the past decade to 25.1 million. The increase has caused
local governments and school systems to hire more teachers, budget analysts,
compliance officers and police officers. </P>
<P>“A lot of growth has been happening in the public sector to respond to a
growing population,” said Don Baylor Jr., a senior policy analyst with the
Center for Public Policy Priorities, a research and advocacy group in Austin.
“That has been an ongoing driver of our job growth.”</P>
<P>Baylor warned that the growth in government jobs may shortly come to an
abrupt halt when state budget cuts take effect this year. In July, a dip in
government jobs contributed to a spike in the state’s unemployment rate, which
went from 8.2 percent to 8.4 percent.</P>
<P>“I think we are about to find out what the jobs picture looks like” without
growth in the public sector, Baylor said. </P>
<P>The Texas economy also has benefited from the huge sums spent by the federal
government. The state is home to several large military installations as well as
NASA, which helped Texas reap more than $227 billion in federal spending in
2009 — more than double its 2001 total, according to the Census Bureau. Texas is
the nation’s second-most-populous state, behind California, where the federal
government spent almost $346 billion in 2009.</P>
<P>In the wake of the Great Recession, the state has raked in nearly
$25 billion in federal stimulus money, which has gone to everything from
road projects and unemployment benefits to helping to balance the state budget.
Befitting its population, Texas has received the third-highest amount of
stimulus money in the nation, behind California and New York. </P>
<P>“It is not like Texas does not benefit from Washington,” said Richard W.
Fisher, president and chief executive of the Federal Reserve Bank of Dallas. “We
get ours. But still, the driving force of the Texas economy is the private
sector.”</P>
<P>Company executives and economic development officials credit Texas’s economic
successes to what they call a pro-business culture. Texas is a right-to-work
state, has relatively low business taxes and has no state income tax. They also
applaud Perry for pushing through a series of tort reform measures, which limit
medical malpractice lawsuits, impose fees on unsuccessful plaintiffs and make it
easier to dismiss cases deemed to lack merit.</P>
<P>Texas also has abundant land for development and limited land-use
restrictions, making development cheaper and easier than in many places.</P>
<P>Fluor, a global firm that designs and builds complex industrial plants, moved
its corporate headquarters to the Dallas area from Orange County, Calif., five
years ago. Alan Boeckmann, who was Fluor’s chief executive at the time, said the
corporation was eager to take advantage of what Texas had to offer.</P>
<P>“Most of the reasons fall into the category of corporate efficiency,” he
said. “We had very little in the way of clientele and business issues in
California. Also, it was very difficult to recruit people to California because
the cost of living scared them away.”</P>
<P>Texas’s relatively soft landing after the recession has helped its other
assets, which include a booming energy sector, world-class airports, Gulf of
Mexico ports and burgeoning trade with its southern neighbor, Mexico. Trade with
China also is up sharply.</P>
<P><STRONG>Housing prices in check</STRONG> </P>
<P>Texas was shielded from the worst of the housing-market bust by the state
government’s tight regulation of home equity loans, which were not permitted
until the late 1990s and are limited to 80 percent of a homeowner’s equity.
Elsewhere, property owners often took out riskier home equity loans and
mortgages that left them financially crippled when housing prices collapsed,
causing damaging ripples across the economy.</P>
<P>At the same time, mortgage lenders in Texas are tightly regulated, which
prevented abuses that were prevalent in many parts of the country. Taken
together, the regulations helped keep Texas housing prices in check.</P>
<P>“<SPAN>Because of early and robust regulation, </SPAN>We never had that
disconnect between incomes and home prices that you saw elsewhere at the height
of the housing bubble,” said Douglas B. Foster, commissioner of the Texas
Department of Savings and Mortgage Lending. “So there was no need for exotic
mortgage products.”</P>
<P>Perry’s campaign called the mortgage regulations appropriate. “Governor Perry
is not against all regulations,” Miner said. “He is against regulations that
kill jobs and harm the economy.”</P>
<P>James C. Oberwetter, president of the Dallas Regional Chamber of Commerce,
says that, overall, the state’s economy has benefited from a light hand of
government — even if that has allowed social problems to fester.</P>
<P>“There are some conservative principles at work, which, true enough, cause
problems for funding some of our social programs,” he said. “Yet, on the other
hand, it leads us to great job creation.”</P>
<P>Many educators and others say that trade-off is evident in many social
indicators. More than a quarter of the state’s population lacks health-care
coverage. Texas is last in the country when it comes to the number of adults
with high school diplomas. It is 44th in the country in school spending per
pupil, and its rate of income inequality is the ninth- highest in the
country.</P>
<P>The Census Bureau says <A
href="http://www.bls.gov/ro6/fax/minwage_tx.htm">9.5 percent </A>of the
Texas workforce is paid at or below the federal minimum wage of $7.25 an hour,
tying it with Mississippi for the largest share of minimum-wage workers in the
country. Many restaurant workers are among those who earn less than the minimum
wage.</P>
<P>“In Texas, as anywhere else in the nation and in all capitalist societies,
you earn what you learn,” Fisher, the head of the Federal Reserve Bank of
Dallas, wrote in a June op-ed piece in the Dallas Morning News, calling for
educational improvements. “Income is directly correlated to educational
attainment.”</P>
<P>In <A href="http://longviewusa.com/">Longview</A>, in the oil- and
gas-producing heart of East Texas, the economy is growing swiftly, and employers
are struggling to find qualified workers.</P>
<P>“We can’t get enough production welders,” said Aaron Lowe, a welding engineer
at Trinity Rail, a railroad car manufacturer that has been expanding briskly in
recent months after shrinking during the downturn.</P>
<P><SPAN>The same is true at other employers. </SPAN>Eastman Chemical, which
manufactures coatings, adhesives and other products, has seen a huge boom in
sales with the drop in natural-gas prices. The two local medical centers also
are hiring.</P>
<P>Still, education officials worry about the future of a city where only half
of the high school graduates go on to higher education. “Every independent
school district in Texas is underfunded,” said James Wilcox, superintendent of
schools in Longview.</P>
<P>And that, he said, will hurt in the short run. Wilcox said he recently had to
cut 20 of the school system’s 1,100 jobs to accommodate state budget cuts. </P>
<P>He also said it will hurt in the long run by leaving many of his students
unprepared for the evolving job market. </P>
<P>“If kids go right to work from high school, they are only going to get pretty
much minimum-wage jobs,” Wilcox said. “They have to be able to get some training
that would make it so they don’t have to start at the bottom.”</P>
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