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Charles Miller Responds: “The Destiny of Demographics”

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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

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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  • Right on, this destroys the pedants argument that Texas is the worst state in the union to live. However I suspect most bored state workers will simply avoid reading. Of course it proves me right on just about everything.
    Today is Texas Independence Day, Remember the Alamo!

    • WUSRPH

      Nobody I know says that Texas is the worst state to live in. Mississippi certainly is worse…and so are several others for climatic and other conditions…..What they say is that Texas is not facing its problems and, if it does not, things will get worse rather than better. If by “proves me right” you mean of the political right wing, yes…but otherwise, no.

      • Its said here every day.

        • WUSRPH

          I think you confuse criticism with condemnation. You criticize something because you want it to be better than it is…That does not mean that you condemn it and think it is the worst place.

    • Blue Dogs

      Texas is the BEST and BEAUTIFUL state to live in because we keep taxes low, less regulation, good job creation and staunch PRO-BUSINESS climate.

      • WUSRPH

        All that is true UNLESS you are poor (and we are way up near the top of the list in percentage of poor people) and are sick (we lead the nation in the percentage of WORKING PEOPLE with no health insurance).

        • only if you factor in illegals, stop being so uninformed it ain’t hard.

          • WUSRPH

            AS RR would say: There you go again!

      • Indiana Pearl

        Where is the water?????

        • We have water on tap in Texas, not sure about the backwoods in Indiana.

  • So he’s saying we’ll depend on other states to make the capital investments?

    • nickthap

      It’s a strangely free-riderish argument he uses there.

  • Guest

    Miller is probably more correct than not regarding broader economic prospects, but ignores that our current state educational institutions are insufficient to maintain current levels of growth. Sure, the Texas economy has grown faster than national economy for 100 years, and its a safe bet that it will continue to do so through the medium term. But this is not destined to always be so, and today’s inputs – a poor educational system that trains too few and often trains them insufficiently – affect growth decades from now. Nobody in Texas has proposed or pursued a northern- or coastal-style state government, and increasing educational funding does not substantially change the Texas model of low-taxes,-small-government. If anything, the low downside risk of the Texas economy means that we have the leeway to spend more on educating our children and building infrastructure – such as roads and water wells for oil and gas exploration – to maximize our economic potential.

  • John Johnson

    Oh, I just love the “expert” opinions from people like Rice’s Prof. Jones and Mr. Miller.They fire me up. Jone’s proclamations have all sorts of holes in them, as do Mr. Millers. I trust they don’t mind a commonbred Texan disputing their lofty opinions.

    If I am reading Mr. MIller correctly, we should just ignore our ranking with regards to education because the uneducated will open up businesses without a high school diploma and make more than the hourly employee flipping burgers or picking fruit. He also states that the high tech jobs will be filled by imports educated elsewhere, and that border crossings will slow because of rthe fantastic wages Pemex is going to be paying.

    All is truly right in Mr. Miller’s world. I can’t wait unitl it all comes to pass. How foolish, for not only all those “elitists”, but also those down at my level, to worry our little selves about our children, our grandchildren and our state. According to Miller, nothing is wrong.

    Thank you, Jesus, for the natural resources underneath us, and the ports and refineries along our southern coastal border, that allow us to declare ourselves in good shape while ignoring the highest homeowner insurance rates in the country, a failed electricity plan, “fee’s” on everything we touch, anchor babies, continued misuse of dedicated funds, potholes, crowded highways, parched, cracking lakebeds, shanty towns, income disparity, and $11,000 in yearly costs per student to produce some of the poorest educated children in the country.

    We have it so much better than others, we should just be satisfied with what we’ve got. That’s what Mr. Miller is telling us, and it is the same, basic lie that Perry has been proclaiming for years now. At some point, the proverbial dog will be hitting the end of its chain. I think we best be relying on our commonsense and less on what people like Mr. Miller or Rick Perry have to say. Until we do, we will continue to elect people like Rick Perry because we think he acutally has had something to do with the black gold and flammable gas sitting underneath us that has driven all our economic blessings.

    • Beerman

      JJ, again, you have hit the nail on the head!

  • David Siegel

    ..”great colleges in New England do not create jobs for the region” How about the high-tech corridor along Route 128? Or the fast-growing biotech center at Kendall Square, next to MIT?

    • Beerman

      Today’s MBA graduates, from New England and most large colleges, are only worried about downsizing, off-shoring and short term profits, and outrageous bonus packages for themselves.

      They take whatever they can, drain it, and move on. They have no need for roads, bridges, a thriving middle-class or an educated and healthy population.

      Wait, that sounds familiar, maybe Texas has been taken over by carpetbaggers from New England?

  • Tellnitlikeitis

    Charles Miller is wrong because he lives in the past. And, he denies reality.

    Here’s the reality:

    The state’s K-12 total enrollment growth from the 2000-01 school year to the 2012-2013 school year: 1,016,221

    Increase in the number of low income students during that same period: 1,057,197.

    Testimony in the school finance trial was that half of our high school low income students are NOT on track to graduate.

    By 2040, 3 of every 10 Texas workers will NOT have a high school diploma, according to demographer Steve Murdock.

    30 percent of your workforce without a high school diploma is toxic and undermines Mr Miller’s sunny outlook.

    Murdock says we have to increase high quality Pre K as the first step in changing the dire trend line.

    Mr. Milller ought to use his influence to help legislators see the future. Instead of expanding Pre K, his friends have been cutting Pre K funding – $200 million two years ago.

  • Jon

    Tell me how Mexico’s going to handle it’s share of Eagle Ford and the Pemex privatization efforts, and you can better say how the economic situation between Texas and Mexico is going to be over the next decade. Immigration becomes something of a non-issue if there are high-paying jobs in the oil industry just on the other side of the border.

    • Blue Dogs

      Jon, Mexican President Enrique Pena Nieto will try to bring millions of immigrants back home to Mexico by pushing this job creation agenda.

      • Jon

        If Nieto turns the situation at the U.S.-Mexico border into at least some semblance of the situation at the U.S.-Canadian border, immigration becomes a non-issue. And the way to do that is simply to make the job opportunities in Mexico financially viable enough to make the ordeal of trying to get over the border not worthwhile.

        (And, yes — aside from privatizing Pemex, the government will have to regain control of the border areas from the cartels, if for no other reason than petroleum engineers and others don’t want to be kidnapped, and private investors don’t want to see their dividends falling off the back of the truck pipeline. But the financial incentives here are vast enough so that it’s worth the national government’s time to get the border situation back at least to the lower-level days of 25-30 years ago, where smuggling was going on but not to the point people feared for their lives if they crossed over from Texas.)

  • buyaclue

    And great colleges in New England do not create jobs for the

    Austin is one of the fastest growing job markets in the U.S. Is he saying that UT plays absolutely no role in that job growth??

  • Pat

    Is Miller aware that Mexico’s share of the Eagle Ford sits underneath land CONTROLLED BY LOS ZETAS AND/OR THE GULF CARTEL? That Los Zetas have attacked Mexican oil pipelines in the past? In many cases, Los Zetas or the CDG actually own the land. There will be no Mexican shale renaissance until the cartel problem is solved – i.e., most likely never.

    • Blue Dogs

      Don’t forget the Chavistas trying to hijack Mexico like they already have done to Peru, Bolivia, Ecuador, Nicaragua, Paraguay and others in Latin America.

  • nickthap

    I don’t see anything in Mr. Miller’s post actually arguing the points made in the article about demographics. It’s just a version of the “shoot the messenger” kind of argument.

    • Tellnitlikeitis

      Exactly, nickthap….

      Miller avoids the reality, which then allows him to put a nice shine on his spin. Low income students made up less than half of our school enrollment during the Bush/governor years. Low income kids made up less than half of the enrollment when Perry became governor in 2000.

      Those low income students now make up 61 percent of the enrollment; the percentage creeps up every year. Those children are much more expensive to educate. Way too many drop out.

      Murdock is telling us that 3 out of every 10 Texas workers will not have a high school diploma by 2040.

      Miller should be smart enough to realize the impact on household incomes when 30 percent of your workforce lacks a high school diploma.

      You may not like the projection but wishing it away won’t change things.

  • I appreciate the large amount of low information posters, but jeez folks read a book. Here’s a good one to start with Gladwell’s David and Goliath. He debunks the pedant’s myth of needing a degree or certification to be successful.