Is Texas Our Future?

(Photo: Rachel George)

(Photo: Rachel George)

In last week’s TIME cover story, the prolific Tyler Cowen argues that “Texas Is Our Future”:

So why are more Americans moving to Texas than to any other state? Texas is America’s fastest-growing large state, with three of the top five fastest-growing cities in the country: Austin, Dallas and Houston. In 2012 alone, total migration to Texas from the other 49 states in the Union was 106,000, according to the U.S. Census Bureau. Since 2000, 1 million more people have moved to Texas from other states than have left.

As an economist and a libertarian, I have become convinced that whether they know it or not, these migrants are being pushed (and pulled) by the major economic forces that are reshaping the American economy as a whole: the hollowing out of the middle class, the increased costs of living in the U.S.’s established population centers and the resulting search by many Americans for a radically cheaper way to live and do business.

The full article is gated, but here’s a good summary of Cowen’s arguments. 

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  1. Blue guy in a VERY red state says:

    If you’re not moving to one of the major cities, and you need some type of safety net, heaven help you. The State of Texas will kick you to the curb in a heartbeat.

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    • momosgarage says:

      Funny you got a thumbs down because what you wrote is true. Texas is a great place to start companies that thrive on low wage employees, that cost little overhead in the way of local and state taxes which are typically used to create safety nets for low income workers with unstable employment. Nothing wrong with that, but it explains all the migration growth into the state. Its basically lower skilled workers hoping to find ANY job that are moving to Texas.

      Besides oil and upper management careers Texas certainly isn’t the place for a low to mid level, highly skilled employees in something like software development. California for example has far more favorable tax and legal benefits for start-ups with business plans and products like Riot Games, Facebook etc. I’m not saying one state is better than the other, I’m just pointing out that Texas due to employment laws that do not favor employees and tax codes that encourage industries reliant on low skill labor, naturally attract and recruit the most DESPERATE type of workers with low skill levels. There is a reason why many companies have their headquarters in places like California or Washington. You think Mark Zuckerberg wants to live in Texas, even though it would save him a boatload in overhead and labor costs?

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      • Stan says:

        “Texas certainly isn’t the place for a low to mid level, highly skilled employees in something like software development”

        Apparently you know nothing about Austin, TX.

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      • momosgarage says:

        @Stan

        I never said Texas did not have jobs, nor did a specify any particular city. The reality is that Texas is certainly attracting obscenely large numbers of lower skilled workers hoping to find ANY job by moving there. Texas might as well be known as “the home of” the $8 an hour machinist and the $12 dollar an hour H1B visa PHD holder, employed in engineering.

        Also, the tech migration to Austin is being driven mostly by senior mid-level employees trying to get more bang for their buck, moving to cities with lower costs of living, in order to raise young families, hoping to take no more than a 10% pay cut overall. That type of environment is not set up for someone without much experience who needs to learn and move up early in a career. I’d argue that Austin is the place where seasoned employees go to plateau their high paying careers and reduce their-day to-day overhead; NOT where someone fresh out of school whom needs training and cutting edge experience to move up later or someone making the jump from production to management. The Texas of today is NOT the Texas of Ross Perot who trained his people on the job at EDS, that kind of employer is LONG gone in the Lone Star state.

        Last, I would rather be laid off from a Facebook, Microsoft, Northrup or Google ANY day. Getting a possible severance and no arguments about whether I actually qualify for unemployment. Its pretty much gospel in Texas that you will be denied your unemployment benefits, should you actually need to claim them. Due-Process is long DEAD in Texas. Ask anyone who’s worked for Dell, Texas Instruments or AMD in Texas within the last 20 years.

        So, I still stand by my point, if someone is early in their tech career or just getting into the middle roles, find work in California, Washington State or Washington DC. In those place you will actually learn something and get on the job training. Texas on the other hand will chew you up and spit you out, with no good reason. Its really nothing more than a place people move to in order to reduce their costs of living when hitting the late 40′s, wanting to coast and keep earning 6 figures.

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      • J1 says:

        “no arguments about whether I actually qualify for unemployment”

        What sort of arguments have you heard to that effect?

        Also, Facebook, Nothrop, Google and Microsoft all have fairly significant operations in Texas. Does your statement apply to them? And EDS is still there, albeit part of HP now.

        ” You think Mark Zuckerberg wants to live in Texas, even though it would save him a boatload in overhead and labor costs?”

        I don’t think he wants to live there, but given Facebook’s growing corporate presence, it would seem he does indeed want to save a boatload in overhead and labor costs.

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    • momosgarage says:

      Facebook, Northrop, Google and Microsoft do not have their headquarters in Texas.

      Texas is typically the place some employers run when they want to underpay staff and use labor laws to coerce employees, using “carrot & stick” methods, while avoiding taxes as well. This is a WELL KNOWN fact, I don’t don’t choose to run my businesses this way, nor do any of my clients or their partners, but at the same time other business owners do have the right to choose this route if they wish.

      Texas and Florida are epicenters for unemployment claims being fraudulently denied by employers, so if you don’t know this, I doubt you’ve ever really been that high up on the food chain. In Texas employment laws do not favor rank & file employees and has tax codes that encourage industries reliant on low skill labor, naturally attracting and recruiting the most DESPERATE type of workers with lower skill levels. Hence my point, that people thinking of moving to Texas SHOULD NOT do so, unless they are in upper management positions looking to lower their cost of living and/or work in oil & gas.

      Dell, Texas Instrument and AMD do reside in Texas and for the most part are MUCH worse places to work than ANY of the equivalent counterparts I mentioned above, whom have corporate offices in WA, CA and VA. I know PLENTY of folks that worked at Texas Instruments and Dell in Texas, whom later moved on to work at Google and Microsoft. In retrospect they would never “wish” anybody with the healthy tech career being forced to live and work in Texas after their experience seeing both sides of the fence.

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      • J1 says:

        It’s a well known fact that I’m going to need more than your assertion to have any idea whether what you say is true. It’s pretty much gospel that shouting and insults don’t really support your assertions, no matter how much higher on the food chain you are than those of us who clearly don’t know our place. If you have something to back up your assertions – other than yelling I mean – I’m ready to be schooled.

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  2. plusECON says:

    I’d love to hear Glaeser’s thoughts on this. He does talk about Houston in his book a lot, but I don’t remember too much…

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    • Kvasek says:

      A major point that Glaser makes about Houston is that it has no zoning laws. As a result, it has plenty of low-cost housing. However, it is much different than some of the cities Glaser praises. Houston is not necessarily a very high density city, and the knowledge spillovers are not always that great (though there are exceptions: Houston is wonderful for health sector). Unlike Boston, NYC or London, in Houston you have to drive everywhere, which reduces chance encounters.

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    • Josh says:

      Out the Richardson area of DFW.

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  3. Phillip says:

    Last I checked New York and LA had their fair share of folks.

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  4. Mudlock says:

    Theory: Texas can afford to be the low-tax state it is because the elderly don’t live there. (Lowest percentage 65+ in the nation.)

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    • Doug says:

      Hidden due to low comment rating. Click here to see.

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  5. Brian Kelsey says:

    Perhaps a more nuanced viewpoint is in order. Texas ranks very well in traditional measures of economic development (e.g., jobs, private investment) but is underperforming other states in many aspects of wealth creation, unemployment, and workforce readiness. Further, inequality gets barely a mention among the rampant boosterism. Here’s a link to a presentation I gave earlier this month at our statewide economic development conference:

    http://civicanalytics.com/texas-economy-miracle-or-myth

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    • Voice of Reason says:

      I think that it’s presumptuous and biased to talk about equality like it’s the ultimate goal, and any inequality is a problem that must be stamped out before all others. People should be more concerned about the opportunities that are presented for all people, rather than spending all of your time worrying about what the Jones’ have, and why you can’t have it.

      Remember, Adam Smith said that equality was far less important than personal freedom, and that inequality was actually an important market force in itself. Why strive to be the best when even when you win the tournament, you’re back where you started?

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  6. celli says:

    As a newly minted Texan I can tell you that good government, weather, and citizens who take pride in their home state are what attracted me. Also, of course, two of my children and their families who live here and love it. Thanks to all the Texans who have greeted me so warmly!

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  7. Ron Zu says:

    Texas has no State income tax, but it has high property taxes, and a sales tax in some areas that is close to 9%.

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  8. Mike says:

    As long as Oil & Gas is strong, Texas will remain an attractive place to live and work. As the oil runs dry, or alternative energy sources become more feasible, Texas star will begin to fade. I love Texas, but we’re based on oil and gas. As much as our diarrhea of the mouth politicians tout our economy and “job creation,” if it were not for a lot of dead dinosaurs under our borders, we would not have the sort of growth we’re enjoying today.

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