Comparing Perry’s Texas to Romney’s Massachusetts

By Rob Sentz

Republican primary front-runners Rick Perry and Mitt Romney are each basing a large part of their campaigns on their economic track records. So who is better when it comes to jobs and the economy — Romney or Perry?

Let’s put each of their states under the microscope to see what the data says. In this exercise we will use Analyst, EMSI’s web-based labor market analysis tool, to help us see the ins and outs of the Massachusetts and Texas economies.

Notes:
1. All data, graphs, and tables are from Analyst’s 2011.3 dataset, which is based on BLS, Census, BEA, and nearly 80 other sources.

2. As an economic firm we want to stress this point — businesses and economic activity create jobs, not politicians.

TEN-YEAR TRENDS
Right off the bat we see that the Texas economy is the clear leader. The state grew by 18%, or about 2.2 million jobs, in the last 10 years. Over that same time period Massachusetts grew by 2%, or less than 100,000 jobs.

(click images to enlarge)

Almost every industry sector in Texas grew from 2001 to 2011. Agriculture, information, and manufacturing were the only ones to actually decline. The big leaders were health care (43% growth, 421,000 jobs), government (17% growth, 282,000 jobs), oil and gas (111% growth, 257,000 jobs), finance and insurance (38% growth, 216,000 jobs), and professional and technical services (29% growth, 210,000 jobs).

Massachusetts’ growth sprung primarily from health care (24% growth, 111,000 jobs), professional and technical services (10% growth, 37,000 jobs), educational services  (19% growth, 35,000 jobs), and real estate (27% growth, 34,000 jobs). A big thing to note is that nine industry sectors — utilities, government, transportation, retail trade, management of companies, wholesale trade, information, construction, and manufacturing — lost jobs from 2001-2011.

Since much of the discussion in the Republican primary has to do with the nation’s more recent economic turmoil, let’s refocus our analysis to 2007 – 2011.

MASSACHUSETTS FACTS
The current population of Massachusetts is 6.6 million, with 4.1 million jobs. The unemployment rate is 7.6%, and average earnings in the state are more than $63,000 per year. The gross regional product (GRP), which is the value of all goods and services produced in a region by all industries, is $378 billion per year.

In Massachusetts, nearly 80% of the population is White, Non-Hispanic. The age demographics tell us the state is pretty balanced, and educational attainment is high.

Massachusetts ’07-11

From 2007-2011, jobs declined by 1% (overall loss of 34,000). All things considered — not bad. The biggest losses were felt in construction and manufacturing (total losses of 82,000 jobs). The biggest gains were in health care (45,000 jobs), educational services (11,000 jobs), professional and technical (11,000 jobs), and accommodation and food services (10,000 jobs).

Also, here is a view of 6-digit (NAICS) industries that grew and declined from 07-11. In the table above we looked only at 2-digit NAICS. When we use the 6-digit sectors we can see much more specific industry detail. Portfolio management was the highest growing industry from 2007-11 in Massachusetts.

Here is a list of occupations that grew and declined from ’07-11. These are 5-digit occupations (SOC codes). Consistent with the industry data, the fastest-growing occupation is personal financial advisors.TEXAS FACTS

Texas has a total population of 25.6 million with 14.2 million jobs. The average earnings is $53.5K per year, and the unemployment is 972,000. The unemployment rate is 8.4%, which is a tad higher than Massachusetts’. The state’s GRP is $1.2 trillion per year.

In terms of demographics, Texas is 46% White, Non-Hispanic, 36% Hispanic, and 11% black or African American. Educational attainment is lower than Massachusetts. Texas also appears to have a slightly younger population when compared to Massachusetts.

Texas ’07-11

From 2007-2011, the Texas economy grew by 3% (391,000 jobs gained overall). The state had huge job gains in oil and gas extraction (56% growth and 175,000 jobs), health care (14% growth and 171,000 jobs), and government (7% growth and 125,000 jobs). Other sectors like finance and insurance, accommodation and food, professional and technical, and educational services all had decent gains. Losses occurred in construction and manufacturing (about 192,000 jobs), retail trade (41,000 jobs or -3%), information (35,000 jobs or -13%), transportation (24,000 jobs or – 4%) and wholesale trade (13,000 jobs or -2%).

Here is a look at 6-digit industries and 5-digit occupations that grew and declined at the largest clip in Texas from ’07-11. As you can see, oil and natural gas extraction is a very big driver for the state. Under Perry, the state also picked up quite a few local government jobs during the recession.

CONCLUSION

Based on job numbers, both candidates do have legitimate claims that their states have done well through the recession. In this comparison — Texas really benefits from the huge growth in oil and natural gas. See this recent interactive display to better visualize this trend. When looking at data like this, it is important to keep in mind that the economies of states (and these two states in particular) are quite different in terms of total population, demographics, and industry composition. That being said, if we had to pick a winner relative to jobs … Texas is the obvious choice.

There is a lot more data that we could explore and if you have any specific questions or would like to dig deeper, please email Rob Sentz ([email protected]).

Read more at Economic Modeling Specialists (EMSI blog)