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Texas Politics - Poverty in Texas - BETA
Eva de Luna Castro discusses employment in Texas. Eva de Luna Castro discusses employment in Texas.
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Eva de Luna Castro on the reasons for low wages in Texas. Eva de Luna Castro on the reasons for low wages in Texas.
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Where the jobs are - and good wages Where the jobs are - and good wages
5.1    Wages and employment

As noted earlier, Texas has a somewhat lower median household income than does the United States as a whole. In 2003 The Economic Policy Institute reported that Texas had 91% of the median income of the US ($39,200 in Texas versus $43,300 for the US). And the hourly median wage in Texas for the same year was 88% of the national average ($12.01 versus $13.62).

These figures suggest that wage-earners in Texas lag behind the rest of the country and, simply put, earn less. In addition, since 1979 a worker earning the national median saw his/her income increase by 10% in 2003, which is not a large increase - but the same worker in Texas saw his or her wages increase by only 2.4%, while the cost of living increased a great deal more.

These figures alone also offer one explanation as to why Texas has the problems it has: its wages are lower and have increased much less over the last thirty years, as Eva Luna de Castro of the Center for Public Policy Priorities discusses in this video clip. . Therefore we might have some evidence to ague that some Texans are poor because they are deprived of wages sufficient to rise above the poverty line. To explore this possibility further, we can focus on low-income families in particular. Families in the bottom or poorest fifth (or quintile) of the total population are frequently counted as the poorest; after all, 80% of all families have higher incomes. In 2003, such a low-wage worker was paid 89% of what his or her national counter-part earned ($7.56 vs. $US 8.46). And since 1979, the US average low-wage worker saw wages increase by 6.9% (adjusted for inflation), but the Texas worker's wages increased 1.0%.

What accounts for this wage structure?

In the first place, Texas has had for many years an unemployment rate that is higher than the national average. A high employment rate suggests a surplus of labor - i.e., more people are looking for work than there are available jobs. This imbalance means that employers can offer lower wages and workers (especially those with few skills) will have little alternative but to accept them. And a high unemployment rate also means that moving up the ladder toward better-paying jobs and better income will be difficult. (You can hear an analysis from the Eva Luna de Castro of the reasons for persistent low wage conditions in this video clip.)

Second, among low-income Texas a relatively large percentage works part-time, and does so involuntarily. That is, many bottom-quintile income Texans work part-time, even though they might like full-time work. In 2003, a fifth of all part-time workers in Texas wanted to find full-time work but could not do so; this figure compares with the national average of 14.7% nationally.

Texas Politics:
© 2009, Liberal Arts Instructional Technology Services
University of Texas at Austin
3rd Edition - Revision 103