Former Texas Gov. Rick Perry address a National Rifle Association meeting in Nashville, Tennessee on April 10. (Justin Sullivan/Getty Images)

Now that he's declared that he's running for president, plan on hearing plenty more from Rick Perry about what he's called the "Texas Miracle" -- the state's impressive economic performance during his long tenure as governor.

"We were the engine of growth because we had a simple formula: control taxes and spending, implement smart regulations, invest in an educated workforce, and stop frivolous lawsuits," the former governor said in his speech announcing his campaign late last wek.

Whole books have been written about why the state is doing well and whether Perry's conservative, free-market economic agenda deserves any of the credit. This post answers a few key questions you may have if you're new to the debate about Texas.

So what's the big deal about Texas?

In his speech, Perry talked about his state's record of putting people to work. By this measure, Texas has done unquestionably well.

There are now about 1.1 million more employees on the payrolls of Texas businesses than there were at the beginning of 2008, before the financial crisis. That's a lot of jobs. By comparison, the entire country has only 3.3 million more workers than it did then. In that sense, the story of America's recovery has been in significant part the story of Texas's recovery.

Texas isn't the only state where the workforce is getting bigger -- California's is too, for example -- but given that some other states have hardly recovered the workers they lost during the crisis, the figures for Texas are noteworthy.


Advocates for the Texas economic experience also like to talk about how cheap it is to live there. Something that costs a dollar on average, in the rest of the country costs just 96.5 cents in Texas, according to the Bureau of Economic Analysis. In other words, going shopping in Texas is like getting 3.5 percent off everything. Not bad.

Texas isn't as cheap as some states, but other major centers of economic activity, like California and New York, are costly by comparison.

What does all this mean for the typical family?

Although Texas's workforce has gotten larger as a whole, financial circumstances for individual workers and families in Texas have changed little. In 2000, when Perry took office, the typical household in Texas earned $52,227, adjusting for the lower prices back then. In 2013, that figure was basically the same, at $53,027.

Still, that's substantially better than what the typical family in the country experienced. Over the same period, median household income declined from from $56,800 to $51,939.


Wait. How can Texas's economy be doing so well if ordinary households aren't doing that much better?

Although businesses in Texas have been hiring, they've only just managed to keep pace with the state's exploding population. So new jobs are easily filled by new arrivals, which doesn't create much pressure for companies to compete by paying higher wages.

The population of Texas increased from 20.9 million to 27 million between 2000 and last year, an increase of 29 percent. By comparison, the population of the country as a whole increased just 13 percent over the same period.

Texas's population is growing mainly because it's a state full of young families, many of whom are immigrants.

Today, the typical Texan is 33.8 years old, compared to 37.3 years old for the typical American, and the state's fertility rate is among the highest in the country, according to the Centers for Disease Control and Prevention. About 4.2 million Texans were born in a foreign country, the Census found, and an estimated 1.5 million are undocumented, according to the Migration Policy Institute.

According to the Census, some 563,000 people moved to Texas from other states between 2010 and 2014.  That group accounts for about 31 percent of Texas's population growth between 2010 and 2014.

While it isn't clear how many of them came looking for work as opposed to other reasons, it seems safe to say that Texas's economy has created opportunities for a few hundreds of thousands of Americans who wouldn't have had them otherwise.

Does Perry get the credit for any of this?

"I would say, 'Yes,' " said Bernard Weinstein, an economist at Southern Methodist University. "I would say he deserves some credit."

It's always hard to know how much of an economic trend is due to the actions of a particular policymaker. Perry was an influential governor for 14 years, but Texas is a big and complicated place.

Weinstein praised Perry for his controversial reforms directed at the reducing cost of tort and workers compensation for businesses. Above all, though, Weinstein said Perry had been effective in persuading firms to move to Texas from other states.

"Obviously, he didn't control the price of oil, but he's been a very good spokesperson and a very good salesperson for the state of Texas," Weinstein said.

Booms and busts along with the price of oil have been part of Texas's history for decades. Recently, high oil prices, along with the new technology of fracking, have brought more business to the state, although there's debate about just how much.

Critics of Perry, including Paul Krugman of The New York Times, claim that a third of the state's growth is due to the fact that is naturally rich in fossil fuels. And they say that since the price of oil has fallen over the past year, forcing many rigs to close, Texas's winning streak might be at an end.

Oil isn't the only natural resource that is abundant in Texas. So is land, which is inexpensive. Lax rules on zoning in sprawling cities such as Houston have made construction permits easy to come by, making real estate especially cheap. That is an important reason for the low cost of living, which probably has attracted many from around the country to Texas.

Weinstein said that Perry had also benefited from decades of decisions by his predecessors that have created a favorable climate for business in the state -- although, he noted, the state's governing philosophy has come with costs. Overall low taxes, he said, have created an "underdeveloped public sector."

Texas has no income tax and instead relies heavily on sales taxes. Many economists as well as conservative policymakers prefer sales taxes to income taxes, because a tax on income discourages people from working. On the other hand, the poor and the working class must pay more in taxes under a system like the one in Texas.

On average, the poorest one in five Texas residents pays 12.5 percent of their annual income in taxes to the state and to local governments, among the highest rates in the country, according to the nonpartisan Institute on Taxation and Economic Policy. Since the poor spend more of their income making basic purchases, sales taxes are particularly costly for them.

The wealthiest 1 percent of Texans, by contrast, pay hardly anything in state and local taxes -- just 2.9 percent of their income. The middle class in Texas also pays slightly less in state and local taxes than the middle class in other states.

"We have one of the most regressive tax policies in the country," said Ann Beeson, the executive director of the Center for Public Policy Priorities in Austin. "Wealthy people are not paying their fair share, and low-income people are getting stuck paying all the taxes."

Without investing more in public education and health care for its poorest citizens, the state won't be able to keep growing, she argued. Only 26.6 percent of Texans have at least a bachelor's degree, compared to 28.8 percent nationally. Twenty percent of the population does not have health insurance, which is much more than national average of 13 percent, according to the Kaiser Family Foundation.

"Businesses are not going to continue to be drawn here if we have a huge class of uneducated, sick, poor people," Beeson said.

Accounting for the low cost of living,  Texas's poverty rate was 15.9 percent according to the most recent Census estimate, the same as the national average.

What else can you tell me about Texas?

If you want to learn more, here are a few things you should read: