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In Texas, More Jobs and More Poverty
Star Telegram
Mitchell Schnurman

September 16, 2011
View the Original Article

When the country loses jobs, it's not surprising that more people fall into poverty. But when Texas adds jobs, more people fall into poverty, too.

Last week, new census data showed that the poverty rate climbed 6 percent nationwide in 2010. In Texas, it rose almost 9 percent, even though the state has consistently led the nation in job growth.

Texas entered the recession later than most states, but the poverty increase is not just a short-term blip. Go back a full decade, and both the nation and Texas show a similar rise in the percentage of people below the poverty line, despite the fact that Texas was adding jobs while the United States was hemorrhaging them.

On the campaign trail, Gov. Rick Perry often brags about Texas creating 1 million jobs during his tenure. But over the same time, 1.4 million Texans fell into poverty.

"It's not only about growing jobs, it's about growing jobs that pay well," said Steve Murdock, a Rice University sociology professor who was the state demographer and director of the Census Bureau.

The poverty line in 2010 was defined as a family of four earning $22,314 annually before taxes and other expenses. For a single adult under 65, it's $11,344 a year, which is lower than the pay from a full-time minimum-wage job.

Census Bureau officials presented a graph that showed changes in real family median income and poverty rates since 1967, and the two lines were a mirror image: When income rose, poverty fell, and when income declined, poverty took off.

In Texas, median incomes have always been lower than the national mark. But statewide declines in the past decade and since the recession have also been steeper. It's tough for Texas to make a big dent in poverty if it's a laggard in income.

Texas has the highest share of minimum-wage workers in the country, the highest percentage of residents without health insurance and a greater share of employers who don't offer insurance.

Texas also ranks No. 3 among states for income inequality, which means the gap between the haves and have-nots is among the highest here.

The poverty rate is 10 percentage points higher than the state's unemployment rate. It's safe to assume that many people with jobs are scraping by.

The Texas experience should be fodder for presidential candidates and policymakers, who have generally focused on jobs alone, not on the quality of the work. Adding jobs is much better than losing them, obviously, but that hasn't prevented many more Texans from living in poverty.

Technical and structural factors contribute to the weak showing. The most important metric is the unemployment rate, which soared from 4.4 percent in December 2007 to 8.5 percent in August. Texas has regained all the jobs lost during the recession, but its population has been growing much faster than the nation's, in part because people are moving here from other states.

Texas also has a high concentration of Hispanics and African-Americans, and their poverty rates are more than twice as high as Anglos'. In the past decade, Murdock said, minorities accounted for 89 percent of the state's population growth, and Hispanics and African-Americans in Texas are four times more likely than Anglos not to have a high school degree.

"One of the best cures for poverty is education," Murdock said. "Without that, we can't remain a competitive state."

That reality doesn't square with the Legislature's decision to cut billions from education spending rather than tap the rainy-day fund or raise revenue. In effect, Murdock said, state leaders will reduce payouts to schools by about $500 per student while also requiring them to absorb up to 180,000 new students statewide.

Job cuts are now appearing in the education sector, which harms the economy. As important, the pullback undermines the long-term effort to improve graduation rates for high school and college students.

In general, the poor are not a static group. People tend to move in and out of poverty depending on whether they lose their job or get sick or divorced, said Arthur Sakamoto, a sociology professor who teaches classes on poverty and income equality at the University of Texas at Austin.

"By American standards, it's a miserable life, but they're not starving like the poor in Somalia or rural Mexico," he said.

Most have phones, refrigerators and air conditioning, but it's hard to live on so little money. Some residents can afford to run air conditioning only a few hours a day, he said.

Last year, 4.6 million Texans lived in poverty, which is 18.4 percent of the population and the highest share since 1994. The national poverty rate was 15.1 percent in 2010, the highest since 1993.

One group of Americans didn't lose any ground on that score despite the recession. Just 9 percent of people 65 and older were below the poverty rate, the lowest share among all age groups.

In 1959, more than one-third of older citizens lived in poverty. Social Security and Medicare changed that, and their poverty rates plunged for two decades and then continued a steady decline.

In the work world, layoffs and cuts in pay and benefits have become commonplace, but seniors are less affected by them.

For the past decade, working-age Americans have been more likely to fall into poverty than their grandparents, the data show.

"Government programs are usually essential to reducing poverty," Sakamoto said.

Some European countries have poverty rates that are half of ours, he said, because they restrict immigration, set a higher minimum wage and make healthcare accessible for all.

Those ideas will go nowhere in the GOP presidential debates, and they may not get traction in today's America. But as Texas has shown, simply creating jobs isn't enough.

Mitchell Schnurman's column appears Sundays and Wednesdays. 817-390-7821