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The Economist: How big is Texas?




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The author of this entry is responsible for this content, which is not edited by the Wilson County News or wilsoncountynews.com.
Dr. M. Ray Perryman
March 5, 2014 | 826 views | Post a comment

I am often asked just how important Texas is to the United States economy. The shortest answer is “very.” In honor of Texas Independence Day, here are some key facts about the Lone Star State’s contribution.

First, some basic facts. Texas is the second most populous state, with 26.4 million residents. Before the mid-1990s, we were third behind New York and California. Since then, we passed New York and have been adding residents at a faster pace than any other state (though California is still significantly larger with 38.3 million residents). More than 8% of Americans now live in the Lone Star State, and that proportion is likely to continue to expand in the future.

One reason for our growing population is that Texas is a jobs engine, with 8% of total US employment now set in Texas. Since 2000, the state has accounted for nearly 2.0 million (31%) of the net new jobs created in the United States. In addition, we entered the recent recession later and emerged earlier, and have contributed more than a million new jobs since the depths of the downturn. In terms of output (real gross product or RGP) in the economy, the Lone Star State accounts for 9% of the national total.

Texas is also an essential energy resource for the nation. About 36% of oil and 30% of natural gas produced in the United States comes from Texas fields. With 29% of refining capacity, the Lone Star State fuels vehicles across the nation. At the same time, Texas is home to more than 20% of total US installed wind energy capacity, with some of the largest fields anywhere and a new set of transmission lines to get that power where it needs to be.

In addition, Texas is crucial to foreign trade activity. Four of the largest 11 maritime ports (ranked by tonnage) are in Texas. Laredo is the second-largest land gateway for imports/exports (ranked by value). In fact, almost 18% of US exports make their way to world markets via the Lone Star State.

Agriculture is another important Texas contribution. We rank second among all states in the total value of ag products sold, and first in livestock, poultry, and related products. Texas produces more cotton, cattle, and sheep/goats than any other state, as well as a notable proportion of many other crops. Clearly, Texas agriculture is critical to the nation’s (and, in fact, the world’s) food supply.

Not every Texas statistic is positive, however, and this is where our challenge lies. The state has a larger percentage of the population without health insurance (24%, according to the Kaiser Family Foundation) than in any other state and far higher than the national average (15%). We also have a high rate of poverty, ranking in the top 10 among all states with nearly 18% of Texans living in poverty. Our educational attainment levels lag other areas, particularly those that often compete with us for quality corporate locations and expansions. In 2009, less than 80% of Texans had graduated from high school, compared to 85% across the United States and even higher in many of the other populous states. We also trail in the numbers with Bachelor’s or more advanced degrees. While there have been notable improvements in these areas over the past 10 years, more must be done to stay competitive. There are other issues (such as a need to develop additional water supplies) that could also lead to problems in the future.

Texas is blessed with abundant natural resources and a framework for business growth that has enabled our economy to set the pace for the nation. For ongoing success through the decades to come, it is essential to make meaningful progress toward dealing with those lists we don’t like to top. If we do, the Lone Star State will grow ever more important to the nation as a source of products, people, and prosperity.

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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.
 
« Previous Blog Entry (March 3, 2014)
 


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