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The not-so-miraculous Texas economy

March 14, 2014

The Washington Monthly has an article that digs into some recent talking points about the Texas economy. It’s no surprise that much of the boom is due to the shale plays, including the Eagle Ford that has been such a boon to San Antonio and points south. (The photo left shows the gas flares at night.) Austin and the silicon hills are the high tech shining light. But surprising, to me, is that this has not resulted in that large an influx of people or business from other states. Most of the state’s recent population increase comes from immigration, and from the highest teen birthrate in the nation:

No wonder then, that the flow of Americans moving to Texas is so modest. The state may offer low housing prices compared to California and an unemployment rate below the national average, but it also has low rates of economic mobility, minimal public services, and, unless you are rich, taxes that are as high or higher than most anywhere else in America. And worse, despite all the oil money sloshing around, Texas is no longer gaining on the richest states in its per capita income, but rather getting comparatively poorer and poorer.

Unless we encourage orthogonal sectors, I fear this energy boom may end as many past have, with a slump, few business sectors to pick up the slack, and a swathe of workers who have difficulty finding their next perch.

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