Tuesday, September 6, 2011

A lesson in statistics: Perry's 40% job growth in Texas

Rick Perry, the conservative governor of Texas and contender for the GOP Presidential nomination likes to tout his record as a job creator. In his stump speeches across the country (or just in Iowa, New Hampshire, and South Carolina), he likes to emphasize that Texas led the country in job growth since 2009. 


In fact Perry claims that 40% of all the jobs created in the US since 2009 were in Texas. Astonishing statistic, but according to an analysis by Factcheck.org, Perry's claim is actually accurate. 
The problem with Perry touting this 40% statistic is that given population growth in Texas and other factors the unemployment rate in Texas has actually increased since June 2009 even if it is still below the national average. According to factcheck.org:


"In fact, if we look at the June 2009 starting point that Perry refers to, unemployment got worse in Texas – going from 7.7 percent in June 2009 to 8.4 percent in July 2011. The national rate, meanwhile, improved – dropping from 9.5 percent to 9.1 percent."


Moreover, it's not just the rate of job creation that's important in Texas, it's the quality of the jobs being created. Along with Mississippi, Texas has the highest number of workers earning below the minimum wage and the highest percentage of workers in the US (26%) who lack health insurance.


Paul Osterman, an economist at the MIT Sloan School of Management offers a compelling analysis of the jobs picture in Texas' Rio Grande Valley in today's NYT. The opinion piece reminds us that it's important to look at what Perry's "40%" really means and the impacts on the community, schools, and health care system. 


All in all, this "40%" label offers a valuable lesson in statistics, especially relevant for me and my students at Towson University as another semester of both undergraduate and graduate research methods gets underway. When looking at a statistic like this 40%, it's important to put things in perspective, to truly understand the full "statistical significance" of the percentages we cite, and to understand whether what's going on in the sample (e.g. Texas) is representative of what might be happening in the true US population. After all, Texas is a unique state that depends on the oil industry in particular to drive growth. 


As Obama prepares for his big jobs speech and the GOP Presidential candidates debate the economy and jobs tomorrow night, it will be important for us to understand the full jobs picture, compiling both statistics and trends that speak to our experience with unique samples like Texas and the larger US population. Moreover, sometimes it's not just about the percentage but what the percentage means and how it impacts other important factors and concerns. All in all, Perry's 40% offers a good lesson in statistics for us all.

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