Perry and Romney can duke it out over who created
the most jobs, but governors have as much influence over job growth in
their states as roosters do over sunrises.
States don't have their own monetary policies so they can't lower
interest rates to spur job growth. They can't spur demand through fiscal
policies because state budgets are small, and 49 out of 50 are barred
by their constitutions from running deficits.
States can cut corporate taxes and regulations, and dole out
corporate welfare, in efforts to improve the states' "business climate."
But studies show these strategies have little or no effect on where
companies locate. Location decisions are driven by much larger factors --
where customers are, transportation links, and energy costs.
If governors try hard enough, though, they can create lots of lousy jobs.
They can drive out unions, attract low-wage immigrants, and turn a
blind eye to businesses that fail to protect worker health and safety.
Rick Perry seems to have done exactly this. While Texas leads the
nation in job growth, a majority of Texas' workforce is paid hourly
wages rather than salaries. And the median hourly wage there was $11.20,
compared to the national median of $12.50 an hour.
Texas has also been specializing in minimum-wage jobs. From 2007 to
2010, the number of minimum wage workers there rose from 221,000 to
550,000 -- that's an increase of nearly 150 percent. And 9.5 percent of
Texas workers earn the minimum wage or below -- compared to about 6
percent for the rest of the nation, according to the Bureau of Labor Statistics.
The state also has the highest percentage of workers without health
insurance. Texas schools rank 44th in the nation in per-pupil spending.
The Perry model of creating more jobs through low wages seems to be catching on around America.
According to a report out today from the Commerce Department, the
median income of U.S. households fell 2.3 percent last year -- to the
lowest level in fifteen years (adjusted for inflation). That's the third
straight year of declining household incomes. Part of this is loss of
jobs. Part is loss of earnings.
More and more Americans are retaining their jobs by settling for
lower wages and benefits, or going without cost-of-living increases. Or
they've lost a higher-paying job and have taken one that pays less. Or
they've joined the great army of contingent workers, self-employed
"consultants," temps, and contract workers -- without healthcare
benefits, without pensions, without job security, without decent wages.
It's no great feat to create lots of lousy jobs. A few years ago
Michele Bachmann remarked that if the minimum wage were repealed "we
could potentially virtually wipe out unemployment completely because we
would be able to offer jobs at whatever level."
I keep on hearing conservative economists say Americans have priced
themselves out of the global high-tech labor market. That's baloney. The
productivity of American workers continues to soar. The problem is
fewer and fewer Americans are sharing the gains. The ratio of corporate
profits to wages is the highest it's been since before the Great
Besides, how can lower incomes possibly be an answer to America's
economic problem? Lower incomes mean less overall demand for goods and
services -- which translates into even fewer jobs and even lower wages.
In short, the Perry (and Bachmann) model of job growth condemns
Americans to lower and lower living standards. That's nothing to crow