Charles Miller Responds: "The Destiny of Demographics"
Thu February 27, 2014 8:17 am

Followers of Texas politics and business will certainly know the name Charles Miller, who is a chairman emeritus of the Greater Houston Partnership and a former chair of the UT System Board of Regents, among many other things. He wrote a response to a post from Monday about the changes in demographics in Texas, and I thought it was worth printing below in its entirety:

The Woe-Is-Me forecasts from demographers about the outlook for Texas personal income growth has been tiresome and consistently wrong. Average per capita income in Texas grew in the 1980s, the 1990s as well as the recent decade ending in 2010 (which included the tech and housing bubbles bursting).

Average per capita income in Texas in the first decade of this century grew faster than the U.S. (by 5 percent), faster than California by (8 percent) and faster than New York, New Jersey, Florida, Massachusetts, Georgia, Washington, Illinois, Pennsylvania, Ohio, Michigan, Wisconsin, and many others while the Hispanic population continued to grow. Places like Washington, D.C., Virginia, and Maryland grew faster due primarily to the bloat of the federal government.

If adjusted for cost-of-living, Texas results are even more  outstanding. (Household income would have somewhat similar relative results but is affected by family size and younger populations, like Texas.) The problem with the demographer's projections is that income is made up of more than wages, such as proprietors’ income, and the opportunities for income growth for newcomers is not determined exclusively by education. The implication that certain ethnic populations such as Hispanics won’t be entrepreneurial, start small businesses, work hard and grow has a distasteful flavor--and it’s dead wrong.

There is also a continual in-migration of skilled workers to Texas who are drawn by those opportunities, many whom were educated or trained elsewhere at another state's expense--demonstrating that it’s not necessarily how much Texas spends on education but rather on the business opportunities created by other economic policies and some good resource luck. (BTW, Texas spends a very competitive share of that personal income on education. And great colleges in New England do not create jobs for the
region.)

Long-term economic forecasts for Texas will depend heavily on how Mexico manages its own economy and its own demographics, and that outlook has recently improved significantly. The test for Texas is to stay its general policy course on taxes, spending, and regulation, and not try to re-invent itself in the model of northern and coastal states. It's so hard for elites not to plan and manage everything, and simplicity is so uninteresting.

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