Tyler Cowen’s 10 Reasons Texas Is Our Future

It's big. It's hot. It's cheap. And, according to Tyler Cowen, it's where America's 'new cowboys' are blazing a path for the nation to follow

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TIME Magazine Cover, Oct. 28, 2013
Photo-illustration by Sarah Illenberger for TIME

The crisis may be over (for the time being) in Washington. But the crisis for America’s middle class continues, as middle-income jobs get harder to find and the cost of living gets harder to bear. Where can Americans turn for answers? In a word: Texas.

In the cover story of this week’s TIME magazine, libertarian economist Tyler Cowen, author of the new book Average Is Over, looks at why so many Americans are headed to the Lone Star State. And he comes to a surprising conclusion. For better or worse, he argues, it’s because Texas is our future.

Based on Cowen’s research, here are 10 reasons why America’s future is going to look a lot more like Texas:

1. Everyone’s moving there

More Americans are moving to Texas than to any other state. As Cowen notes in the piece:

Texas is America’s fastest-growing large state, with three of the top five fastest-growing cities in the country: Austin, Dallas and Houston. In 2012 alone, total migration to Texas from the other 49 states in the Union was 106,000, according to the U.S. Census Bureau. Since 2000, 1 million more people have moved to Texas from other states than have left … Over the past 20 years, more than 4 million Californians have moved to Texas.

2. The middle-class squeeze

We’re creating jobs at the low end of the income spectrum — 58% of jobs created since the end of the Great Recession pay less than $13.83 an hour. However, it’s not that incomes are stagnant generally. Earners at the top have done very well — but the gains have been distributed quite unevenly. Last year the top 1% of earners took home 19.3% of household income, their largest share since 1928. The top 10% of earners didn’t do so badly either, taking home a rec­ord 48.2% of household income.

The middle-income job is disappearing, at the same time that holding onto a middle-class lifestyle is becoming more expensive. As a 2010 report by the Department of Commerce found, looking at economic data from the past two decades, “The prices for three large components of middle-class expenses have increased faster than income: the cost of college, the cost of health care and the cost of a house.”

3. Automation

One of the big reasons behind the middle-class squeeze is automation — and it’s only going to get worse, possibly much worse. A recent study by researchers at Oxford University found that 47% of jobs in the U.S. are vulnerable to automation, not just in fields involving manual labor but also increasingly in fields involving complicated decisionmaking.

Looking forward, says Carl Benedikt Frey, co-author of the Oxford study, more and more low-to-medium-skilled jobs will be vulnerable to automation. “Take the autonomous driverless cars being developed by Google. This new technology may lead to workers such as long-haul truck driver being replaced by machines,” he says. “The ability of computers, equipped with new pattern-recognition algorithms, to quickly screen through large piles of documents threatens even occupations such as paralegals and patent lawyers, which are indeed rapidly being automated.” Even the bulk of service and sales jobs, Frey says, from fast-food-counter attendants to medical transcriptionists — the types of fields where the most job growth has occurred over the past decade — are also to be found in the high-risk category.

4. The skills gap

Automation doesn’t just kill jobs, of course, it also creates them. To take just one example, as Cowen notes in his book, according to the U.S. Air Force, it takes about 168 workers to keep a Predator drone in the air for 24 hours. To compare, the operation of an F-16 fighter aircraft requires fewer than 100 people for a mission.

But the new jobs will be far different from the old ones, Cowen argues. Rather than driving a truck, workers will be needed to regularly inspect that the sensors of self-driving vehicles are in good working order. Medical technicians will let software interpret body and brain scans, but they will need to know more about the limitations of the software (to override mistakes or look more closely when necessary) than about traditional medical science. Teachers and professors will be less crucial to the communication of information and grading, and more important for motivating and inspiring (two tasks computers usually cannot manage on their own).

The question to ask in the years to come will be: Do you add value to the computer, or is the computer better off without you? If the answer is the latter, your job is in trouble. In such an economy, the job growth is likely to be strong — as it is now — in very high- and very low-earning jobs. But the middle is in trouble. As Cowen puts it, average is over.

5. Cheap land, cheap houses

So where can people go when their incomes aren’t keeping pace with the rising cost of living? We know they’re headed to Texas. And they’re headed there because land is cheap, and thus housing is cheap.

A typical home in Brooklyn costs more than half a million dollars (and rising rapidly), and 85% of these dwellings are apartments and condos rather than stand-alone homes. They don’t usually have impressive sinks and seamlessly operating air-conditioning fixtures. In Houston, the typical home costs $130,100 — and it is likely a stand-alone and newer than the structure in Brooklyn.

Housing is bigger — and cheaper — in Texas.

6. Cheap living generally

Cowen notes that this cheap cost of living isn’t just limited to housing, it’s a pervasive fact of life in Texas. And it has a huge impact on people’s standards of living:

The lower house prices, along with a generally low cost of living — helped along by cheap labor, cheap produce and cheap gas (currently about $3 a gallon) — really matter when it comes to quality of life … Texas has a higher per capita income than California, adjusted for cost of living, and nearly catches up with New York by the same measure. Once you factor in state and local taxes, Texas pulls ahead of New York — by a wide margin. The website MoneyRates ranks states on the basis of average income, adjusting for tax rates and cost of living; once those factors are accounted for, Texas has the third highest average income (after Virginia and Washington State), while New York ranks 36th.

7. Jobs

Of course, it’s not just cheap living that draws people to Texas. It’s also jobs, as Cowen notes:
In the past 12 months, Texas has added 274,700 new jobs — that’s 12% of all jobs added nationwide and 51,000 more than California added … In fact, from 2002 to 2011, with 8% of the U.S. population, Texas created nearly one-third of the country’s highest-paying jobs.

8. Low taxes

Texas has no income tax. Per resident, it collects roughly $3,500 in taxes overall (including all state and local taxes) every year. By way of contrast, California collects $4,900 per resident — New York collects a whopping $7,400 per resident. Both states, of course, have income taxes.

People are going to Texas because it’s a low-cost, low-tax state. But they’re also migrating to other Sun Belt states, like Colorado, Arizona and South Carolina, which have similar policy profiles.

9. The rise of the ‘new cowboys’

These folks moving to Texas are a bit like the mythical cowboys of our past — self-reliant, for better or worse. As Cowen predicts in his piece, a new generation looks set to repudiate work and consumerism in favor of a simpler, off-the-grid way of life:

A new class of Americans will become far more numerous. They will despair at finding good middle-class jobs and decide to live off salaries that are roughly comparable to today’s lower-middle-class incomes. Some will give up trying so hard — but it won’t matter as much as it used to, because they won’t have to be big successes to live ­relatively well.

10. The rise of micro-houses

Cowen even predicts that micro-houses will become popular as people seek out super-low-cost living:
In the coming decades, some people may even go to extremes in low-cost living, like making their homes in ­micro-houses (of, say, about 400 sq. ft. and costing $20,000 to $40,000) or going off the grid entirely. Brad Kittel, owner of Tiny Texas Houses, blogs about his small homes built from salvaged materials at tinytexashouses.com. His business, based in the small rural community of Luling, east of San Antonio, offers custom homes, plans and lessons on how to be a salvage miner. So far he has built about 75 tiny homes … The micro-home trend is being watched by traditional homebuilders as well. Texas-based developer D.R. Horton, a member of the New York Stock Exchange and one of the largest homebuilders in the country, built 29 micro-homes sized from 364 to 687 sq. ft. in Portland, Ore., last year.

In some ways, Cowen says, the new settlements of a Texas-like America could come to resemble trailer parks. “The next Brooklyn may end up somewhere in the Dakotas,” he writes. “Fargo, anyone?”

What it all adds up to is a future where many more Americans live in Texas — and much of the rest of America looks more and more like the Lone Star State.

Among the policies Cowen proposes as we move into this future: cheaper education (to allow workers to upgrade their skills), looser building and zoning regulations (to radically reduce the price of housing across America), and a loosening of occupational licensing at the state and local level (to open up many more low-skill jobs).

Texas, he writes, is “America’s America,” where Americans go when they need a fresh start. And a little more Texas could go a long way.

Click here to join TIME for as little as $2.99 to read Tyler Cowen’s full cover story on why Texas is America’s future

493 comments
btinfinity2012
btinfinity2012

All this talk about people moving to Texas is irritating for some reason.

carlos_llanes1979@hotmail.com
carlos_llanes1979@hotmail.com

The worst type of individual is the one whom makes assumptions based upon unproven or second had biases. It shows a lack of culture and personality. Many attack the state of TX yet have never lived there and those that have may have had a limited experience there due to their socio economic position in life. That being said, you cannot argue with factual data. Numbers do not lie. Texas has one of the healthiest economies in the United States of America and is quite frankly the last piece of freedom left in America. Many attack the conservative nature of the state yet I must ask; when did it become a bad thing to have an identity? There are a great number of Christians in TX and what is wrong with that? Affordable housing, less unemployment, and corporate growth; seems like a flourishing environment to me. 


One post attacked the heat and climate, I for one do not intend to live anywhere without central heating and air, so for me, the argument is null and void. I don't believe most homeowners spend all their life outside, in fact I am quite sure most homeowners have vehicles that are also equipped with an air conditioner. Would you rather live in a state with excellent weather (for example California) were you spend over 40% of your income on housing and the remaining on fuel and utilities?


Regardless of your view, your position in life usually determines where you choose to live. If I was a single corporate executive I could totally see living in a miniature flat in Manhattan. If I loved hunting and exploring land, I could totally love living in Montana. If massive beaches were my motivation, I could move to California or Florida. I guess what I am getting at is that everyone is subject to there own bias based on their personal desires yet you should not knock something that you have never experienced without at the very least doing some research.


In closing, you can attack TX all day long but for me Christianity, Family, Housing, Patriotism, Career Growth, and Land are important to me thus TX is the perfect fit. I respect those with different views and would not disrespect anyone whom chose to live elsewhere. 

oks06a
oks06a

I think its funny that Texans are bragging about the revelations in this article. I am a Texan and there are plenty of things I love about Texas, but just think critically for 10 seconds if your brain is capable of permitting you... 

The whole reason that Texas is looking like the future for America is because the future for America is looking pretty crappy right now. The middle class is disappearing. The only reason that Texas bodes will with no middle class is because the cost of living is lower so that its easier for low income families to make it. Texas is merely a consolation price for a failing America... nothing really to brag about.

ashanty678
ashanty678

I profess that the right to buy and sell is a fundamental human right.The war with Japan was initiated by Japan.Because of the United States unfair trading practices.Black countries should be the last to foster unfair trade.Seeing that it was the buying and selling of black people.That slavery was based on.The United States is the great deceiver.Building embassies and bases all over the world.Only to broker bogus trade.Governments have got to take their hands off national and international trade.Then play the part of referee not bully in the world economic arena.You would be a fool to believe that the United States does not have to trade with the rest of the world.The United States's uranium,bauxite, fertilizer,and many other goods.Comes from other parts of the world.Non aligned nations do not have to take military action like Japan.But could impose tariffs,sanctions, increased taxes,withdrawal of exports,and other punitive trade measures.Should the United States and her allies.Play the bully in international affairs.Peter Carlos Hinds.

NYVic
NYVic

NYVic just now

When I first read this article, I was shocked that Time would allow such shoddy reporting. Is this an opinion piece? It's certainly not a news article. Where to begin? First question for the author: you admit a long drought last year. Where are Texans going to get water in this idyllic future you propose? Second question: do you, Mr Cowen, plan to move into a house built by unregulated developers, or is that just for the little people? Me? I want my electrical wires and gas plumbing to be installed by licensed professionals with very strict codes. Did you sleep thru the Chinese Sheetrock crisis in Florida? Are you ok with people getting hurt from crummy, regulation free buildings? Well, as long as its not YOUR family, right? Three, lets discuss schools. In the beginning, you state, ( in Texas) "Many schools are less than stellar", but near the end you conclude that our "(US) K-12 needs to be much more rigorous ..." Will they become more rigorous by Texas' less than stellar schools? By teaching that dinosaurs were on Noah's ark as part of the science curricula? Ands lets end with social and medical issues. Texas has terrible health care availability, probably some of the highest % of uninsured in the nation, and thanks to your " lack of Government interference", women night have to drive 450 miles for birth control and or abortion services. You can keep your crappy construction, education and health care. I'm thrilled to stay in NY and pay for the things that matter to me: parks, museums, roads, bridges, good schools and colleges, health care etc.Edit (in 5 minutes)

StephenMoulton
StephenMoulton

I moved from San Diego to Austin last year and spent 6 weeks this summer up in Dallas.  I love this state.  The one thing I don't get is why everyone thinks Austin is this liberal bubble in the middle of a conservative state.  Dallas and Harris Counties are blue as well.  Austin's weirdness has little to do with being "liberal" as the rest of the country understands it, but more to do with being...well...weird.  In a good way though. 

NinaBaptiste
NinaBaptiste

If you are looking for a job and a cheap place to live, yes Texas has it all from a pure economic standpoint.  But if you are looking for cultural enrichment,  look elsewhere.     I lived in Texas for 10 years and couldn't wait to leave.  It's so dry and void of feeling. Nothing is unique about Texas.  Its city and suburbs and suburbs that stretch for tens of miles, and no matter what city or suburban corner your on, they all look the same.  Nothing is connected, everything is spread out.  What happens if our country faces a Gas shortage or Energy Crisis?  For residents of MegaMetro's like Houston and Dallas it will be quite hard to drive 75 mile (or more) round trip to work when gas hits 7$ and never comes back.  Then Washington, D.C., New Orleans, LA, San Fransico, CA and other dense cities will become much more attractive to people's pocket books.

SatoATC
SatoATC

I left California a in 2003 for Texas. I had been looking for an affordable, family friendly, God-friendly, Constitution friendly environment and I found it in Texas. California had been assaulting my values and my pocket-book, as a small business-man, for decades, and we put NONE of our 4 children through the liberal-propaganda-filled CA Government schools. We sent some to Christian schools and home schooled our last one, till we got to Texas, where a teacher could say God without an insane-intolerant parent breathing lawsuit down their neck. Though Texas has high property taxes, it is more than offset by the reasonable prices for homes and land and NO STATE INCOME TAX. Texas isn't afraid to call wrong wrong, just because it's not politically correct.  The main reason I came to Texas was to find normal people, living normal lives in a normal environment. Texas isn't perfect, because it's full of humans, but the majority of the California immigrants i've met wanted out of that looney state.

JohnMack
JohnMack

What happens when climate change kicks in big? When water is so polluted or scarce? When the state government refuses to deal with these problems?

RobertKaiser
RobertKaiser

There are 2 types of Texans in your story, the I'm rich and can do what I want and your not so you can't,  or the I'm going to get rich at all cost regardless of the effect on others or the environmental and social consequences.  The next generation will be cleaning up the mess and facing the consequences of not taking care of the young poor.  I do not want Texas ideals to spread and the state lives in filth buried in the sand over the last 150 year of raping the earth to the benefit of obnoxiously rich less than 1% that have rigged the system.  

IllidanStormragge
IllidanStormragge

Hopefully those aren't liberals moving from California to Texas or else the policies that make it attractive will be lost within a decade.

psx5783
psx5783

I hope this article doesn't cause resentment toward Texas.  We're not perfect, but I hope what we're doing right will inspire others in different states to alter the course of there local governments to create the right environment for prosperity for the constituents. 

DonaldMcclure
DonaldMcclure

To Roberclee- Here is how it works= with the World's 15th largest economy and no interference from Washington to stop us, we will be  the  10th largest economy's in the world before my grandson, in his freshman year, graduates from High School. As the 15th currently we have refused Washington's offer of several billion dollars to expand one of their health programs and set up our own because we are competent and can do it better with Texas money. We would be saving multi-millions of dollars a year just in the savings by not having lawsuits we brought against the feds. We have won 3 out of 4 and are about to file 4 more. By winning the lawsuits we have unburdened our citizens from fed nonsense and they have created jobs,jobs, jobs. Most likely you have heard the expression that"free people are free to create and move forward". Quick takes: As to federal help with interstate roads all of the gas tax money going to the feds will go to Texas we will spend it better so no road sweat- our schools will not need fed money which is just ours sent to Washington and then back to us anyway. We will control our borders-beleive me the Texas Rangers will do a better job because we won't be under BO's edict not to arrest those illegals here that bring their kin and all the illegals here will be shipped out to their home countries or to Northeast US wherever they wish. This makes room for us to allow the many US citizens that want to come here to migrate and we will be sure they are not gang members (costing us much to inprision-pay welfare to their families here illegally) and another note- You  are probably unfamiliar with the Supreme Court ruling which held that we Texans have to pay for the education of illegal border jumpers and the feds do not. We will save a bundle on that alone. So please do not concern yourself with what would happen once we are free-just write your congressmen and Senators to allow secession of Texas. And last two things do not  reply any more to me since 1. You don't know "come here from sic em" and 2. Don't mess with Texas or Texans!!!!!!!!!!!!!!!! 

robslackjr
robslackjr

Texas is basically positioning itself as a third world economy within the United States.  Not quite as cheap as outsourcing to China--but the infrastructure is much better, thanks to the federal government.

But as a model for building a innovative, future-oriented economy? The Texas model would be a disaster if nationalized. The high skill / high wage / high innovation states like California, New York and Massachusetts are far more important to our future.

We could (and SHOULD) expel Texas from the union. It s oil and cheap labor are replaceable--but we'd be liberated from millions of teabaggers holding our country back.


sunenge
sunenge

@carlos_llanes1979@hotmail.com  You are aware that Texas has one of the largest non-Xtian communities in the U.S., right? kind of blows your whole theory out of the water.

EngineerEveything
EngineerEveything

@oks06a  Nice explanation. I am a Texan as well, and I've been wondering, what the mass migrations will do to the Texas economy, eventually. It'll artificially inflate living costs, until the operators decide that they do not need to ramp up more oil producing assets, or that they need to scale down/consolidate like BP has been doing as of late; what will happen then to all these support roles Texas expanded on in the last 4 years ? All of a sudden, we will have interstate migrants, with newly acquired mortgages without work, and unable to pay on them, creating another crash in the housing market (this time, concentrated in Texas). Additionally, those with lots of capital, are probably buying up properties that people left in a hurry when moving to Texas, dirt cheap, that they will gentrify and increase the cost of which will make moving back unrealistic for many. Texas, may become Detroit-esque when the operators decide to scale down.  Scary stuff.

oks06a
oks06a

@ashanty678  


Two things.


1.) May I suggest a couple English grammar and punctuation classes? Better yet, lets make it a couple dozen.


2.) Actually you have it backwards. It is not that the US has to trade with the rest of the world. Its that the US MUST trade with China and (for the time being) China MUST trade with the US and because those two are so massive economic powers... the rest of the world MUST trade with the US. There are really no countries that have the sort of leverage to pull off what your suggesting (unfortunately). 

xzd5bp
xzd5bp

@NYVic We Texans love it when people move down here and tell us over and over again how much they love this God forsaken state!  We love it when they come over and keep telling us how much they hate Obama and how they love that our minorities know their place and how they love that there are mega-churches on every block.


They were losers who couldn't make it in their own state and now they come over and join the Teabag party and other wingnut cults and never shut up about how everything is Obama's fault.  Their brain-dead, high school drop out son couldn't get into medical school and it's all Obama's fault.


They love the oppressive heat!  They love the pollution!  They love all the fat people walking around complaining that schools teach math and science and not Bible.

TEXMike
TEXMike

Great stay in New York!! Don't need you down here where we believe in working hard for the things in life, instead of the handout mentality thats so prevalent in New York and many other parts of the U.S.! Its literally detroyed so many parts of this country and you continue to blindly march into self destruction! Stay on course see how that works out for ya! LOL

monty4aloha
monty4aloha

@NYVic From some who has had business and families in many states, I will tell you that you  don't know what you are talking about and probably got your information from some type of biased report's. I feel sorry for you. From some who has been in business from California, Hawaii and Texas this article is spot on and this writer should be commended for really digging into the subject matter.

DouglasHamner
DouglasHamner

@NYVic  You just think its a crappy article because you are used to seeing liberal mainstream media dribble.

Shosanna3
Shosanna3

@NYVic You can get crappy construction, education and health care in NY, that's not the point of the article.

SkinnyPostRoute
SkinnyPostRoute

@NinaBaptiste  Actually Houston in America's most ethnically diverse city.  And as a former resident of New Orleans, I can tell you with a 99.9% confidence level that there is an intellectual (and subsequently financial) exodus of the entire metro area.

xzd5bp
xzd5bp

@SatoATC See!  These are the people we like, good God-fearing people who hate Obama and want to say the "N" word without anyone getting angry at them.

TEXMike
TEXMike

This guy has absolutely no clue as to what he is saying or he's just very angry!! LOL

SatoATC
SatoATC

@IllidanStormragge They've got a saying in Austin "Keep Austin Weird". Austin is in one of the few blue counties in Texas. There are radical liberals in Austin (Like that Congresswoman Wendy Blah-blah-kill-a-baby-for-my-convenience" and it is under siege.

laxx1559
laxx1559

@IllidanStormragge Texas is slowly becoming more liberal due to all the left-leaning latinos that are moving there.  As a liberal, I am enthralled that the largest Republican bastogne is turning blue!

DouglasHamner
DouglasHamner

@robslackjr    I came down here, got a $25+ an hour job with opportunity for overtime, no problem. you just need to look beyond retail and handing out newspapers.



psx5783
psx5783

@robslackjr Jobs being outsourced to China/ Oild Pricing is a trade and currency manipulation issue.  I recommend looking into  Trade Wars/ Petro dollars or just simply Goolge it.  Hope this helps

SatoATC
SatoATC

@robslackjr PLEASE EXPEL US. We've got a saying you hear more and more "impeach or secede"

vijayawatchthis
vijayawatchthis

I'd move to Texas in this scenario.  My household earns $150k a year because my wife and I took the time to get technical skills for a technical world (you know, computer networking, automation, development, testing, etc). And no, we didn't have rich parents or friends pay for our training/education.  We did it all on our own.  So, there would be 150k worth of wages moving out of the tax base in the US and to the tax base of Texas.  I know plenty other people that would do the same.  The wage earners will eventually go somewhere that makes wage earning more rewarding and allow a wage earners to keep more of what they earn.  It's just like Atlas Shrugged.  If you strip an individual of too much of what they see as their 'rewards' for working, they will go somewhere more appreciative leaving you holding the bag of dependency with less people to pay for the dependant.  Their is a reason communist countires don't allow their people to freely come and go!

robertclee13
robertclee13

@robslackjr Better close down the Pantex Plant near Amarillo before expelling TX- a lot of nasty weapons stuff there!

txgaia
txgaia

@robslackjr Texas accounts for 8.92% of the US GDP, second only to California. It is most certainly not a 3rd world economy. The innovation is low taxes, a balanced budget, and stable, predictable state governance. The US couldn't find a better model among our state governments.

JoeBtfsplk
JoeBtfsplk

@oks06a @ashanty678


Two things back at'cha:


1)  One ought not decry another's ability to write or punctuate unless one is proficient at these skills himself.  You might review you incorrect usage of 'its' and your

xzd5bp
xzd5bp

@TEXMike TEXMike is right!  We revere the job-providers and life-givers in our state!  We never question their motives because we know they have everyone's best interests at heart.  No one takes hand-outs here in Texas!  Maybe we give tax breaks and kickbacks to wealthy landowners and patriotic businessmen (no businesswomen - women in Texas are from Adam's rib).  But no one else gets government handouts.  We all work hard, especially the job-givers and life-providers!  They work harder than anyone in this God-forsaken state!  I'm glad they're the ones at the top, because they're the ones that are really working hard!

xzd5bp
xzd5bp

@monty4aloha @NYVic It's cheaper here, but then again, it's ugly, hot and miserable.  That and everyone is angry, paranoid and in some wingnut cult yelling about the end of the world.  It's almost as bad as Florida!

toby41
toby41

i am Latino and  Upper  Middle class. Once latinos become prosperous, and they will in Texas, they will become conservative. By the way, i live in Houston and  we have had theater and the symphony for over 50 years, plus the rodeo!



toby41
toby41

i am Latino and  Upper  Middle class. Once latinos become prosperous, and they will in Texas, they will become consevative.

psx5783
psx5783

@wutzthedeal @psx5783 I don't speak for the individuals for Texas, just the results that Texas has produced economically, hope that answers your question.

DouglasHamner
DouglasHamner

@JohnMack @DonaldMcclure BS Article, the reason why Texas recieves the country's largest share of Federal money is that it has more military bases than any other state and it has the largest international border of any state. The New Republics crap argument has been refuted on both side of the political spectrum.

RobertKaiser
RobertKaiser

@robertclee13 @robslackjr the feds are not dumb, if you are going to create massive amounts of toxic waste, you need to do it where you can bury it without even getting permission.