Fact-Checking Romney on Texas Jobs Claim

The attacks on whether Rick Perry can take credit for the "Texas Miracle” just won’t stop — and now Perry’s chief presidential rival, Mitt Romney, has jumped on board.

Following up on his remarks at last night’s debate, Romney issued a press release today challenging Perry’s record of job creation. “Perry has substantially underperformed his predecessors on job creation,” the release says, alleging that “the state unemployment rate in Texas has doubled under Perry.”

Is Romney right? The Tribune's fact-checkers determined that the statistics he cited are correct, but they don't account for the underlying economic changes in the state and the nation that affect Texas’ unemployment rate and job creation.

 

According to the Texas Workforce Commission, the total number of nonfarm jobs grew by 10.7 percent during Ann Richards' tenure, 20.3 percent during George W. Bush's tenure and 11.3 percent during Perry's tenure. 

These bar graphs show the growth and decline in the number of private and public sector jobs during the tenures  Richards (1991 to 1994), Bush (1995 to 2000) and Perry (2000 to present). As you can see, the private sector continuously grew during the tenures of Richards and Bush. During Perry’s time in office, the number of private sector jobs declined in a couple of intervals: in 2002 and 2003, and again in 2009 and 2010. 

The recent decline in private sector jobs could be attributed to the national recession. “Growth in the energy and high-tech sectors and rising home prices” delayed the impact of the national recession on Texas until 2009, according to a report released by the Federal Reserve Bank of Dallas

 

The private-sector decline in the early 2000s could also be attributed to the national economic climate. The tech bubble burst around the time Perry succeeded Bush. According to the Federal Reserve Bank of Dallas, the Texas economy cooled in 2000 because of higher interest rates and the decline of technology markets.

When Perry took office in December 2000, the unemployment rate in Texas was 4.2 percent — as Romney points out, exactly half the July 2011 unemployment rate of 8.4 percent. Texas’ unemployment rate remained at 4.2 percent during Perry's first two months as governor and then began to slowly increase, rising to 6.9 percent in the summer of 2003. 

 

Texas did not withstand the crash of technology markets or the national recession, but when the national housing boom ended in 2006 and the national economy weakened, Texas maintained unemployment at or below a healthy rate of 5 percent for the next two years. The unemployment rate dipped as low at 4.3 percent for four months in 2007 and did not rise above 5 percent until August 2008.

According to the National Bureau of Economic Research, the national recession began in December 2007. That's exactly when the unemployment rate began to rise in Texas.

Today, the unemployment rate is 8.4 percent — the highest in nearly 25 years. During Perry's 10 years as governor, the average rate has been 6.1 percent, which is lower than the average during Richards' tenure but higher than the average during Bush's tenure.

Of course, the unemployment rate measures the percentage of people in the workforce who are not employed and are currently looking for jobs. Changes in the size of the workforce — from migration or an increasing population of young people — can dramatically affect the rate.

Both political sides have used this technicality to explain whether Texas’ unemployment rate is unusually high or perfectly reasonable. Perry backers say the positive business climate in Texas has increased migration, which skews the unemployment rate and hides a healthy economy. Perry opponents say the number of jobs being created isn’t keeping pace with the growth of the workforce —  and that, therefore, the economy isn’t doing well enough.

 

As Romney pointed out at last night's debate, Perry cannot take credit for the fact that Texas has no state income tax, is a right-to-work state, is rich in oil and gas resources and has a Legislature with a Republican majority. But Perry also cannot control the natural ebb and flow of the state and national economies.

Texas Tribune donors or members may be quoted or mentioned in our stories, or may be the subject of them. For a complete list of contributors, click here.