Paul Krugman breaks down Rick Perry's "Texas Miracle"

More required reading if you haven’t stumbled across it yet.

So where does the notion of a Texas miracle come from? Mainly from widespread misunderstanding of the economic effects of population growth.

For this much is true about Texas: It has, for many decades, had much faster population growth than the rest of America — about twice as fast since 1990. Several factors underlie this rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states, who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular.

[W]hat does population growth have to do with job growth? Well, the high rate of population growth translates into above-average job growth through a couple of channels. Many of the people moving to Texas — retirees in search of warm winters, middle-class Mexicans in search of a safer life — bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low — nearly 10 percent of hourly 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.

Again, the reason everyone yaps about how Texas created more jobs than the other states is because more people flew into Texas than other states. The “job growth” was a by-product of simply getting an assload more people. Simply put, that can’t work nationally, because… every state can’t get people from all the other states. And even that neglects the fact that unemployment rates aren’t any better in Texas.

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