The American economy has had little to cheer about since the 2008 financial meltdown and the resulting recession. Recovery has been feeble, and many states continue to struggle. One bright spot in the general gloom, however, is Texas, which began shining long before 2008.
Not only has Texas created jobs at a stunning rate; it has also — pace critics such as the New York Times' Paul Krugman — created lots of good jobs. Indeed, the rest of the nation could turn to the Lone Star State as a model for dynamic growth.
Texan job creation has far outpaced the national average. The number of jobs in Texas has grown by a truly impressive 31.5% since 1995, compared with just 12% nationwide, according to Bureau of Labor Statistics data. Texas has also lapped California, an important economic rival and the only state with a larger population.
The Texas employment situation after the financial crisis was far less spectacular, of course, with the number of jobs growing just 2.4% from 2009 through 2011. But that was still six times the anemic 0.4% growth rate of the overall American economy.
The National Establishment Time-Series (NETS) Database, which provides detailed information on job creation and loss for firms headquartered in each state, can tell us more about Texas' employment growth. NETS data are divided into two periods — the first from 1995 to 2002, the second from 2002 to 2009.
During the 2002—09 period, small businesses of fewer than 10 employees were the Texas employment engine, adding nearly 800,000 new jobs; of those, about three-quarters were in firms with two to nine employees.
Larger Texas companies — those with 500 or more employees — lost a significant number of jobs over this span, and medium-size firms likewise shrank,
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