Don’t Be Fooled by New Income Numbers in Texas

The Bureau of Economic Analysis recently released data on personal income levels for Texans for the second quarter of 2019. The data show Texas as having the largest increase in personal income of any state between Q1 and Q2 of 2019, at 7.5 percent. While this is encouraging news for Texas overall, it’s important to look a little deeper at what this really means for ALL Texans.

When we break down the data by sector of the economy, it becomes clear that a major driver of Texas’ income growth between Q1 and Q2 is from the “Professional, Scientific, and Technical Services” sector. This includes very high-skill occupations such as lawyers, accountants, engineering, computer services and consulting services, which saw an increase of 1.12 percentage points. Of the total increase in personal income in Texas, 19 percent occurred within this sector alone.

Though income growth in the “Professional, Scientific, and Technical Services” sector is booming and is great for our state, not all Texans are experiencing income growth in all sectors. In fact, the same report shows an average increase of just 0.24 percentage points when looking at all sectors. Furthermore, Texas does not include professional services in its sales tax collections meaning this growth does not add direct revenue for education or health costs that the state incurs.

In 2015, Texas ranked 11th worst among all 50 states for income inequality. The average income of the top 1 percent of Texans was $1.3 million, while the average for the remaining 99 percent of Texans was only $56,000. That means that the top 1percent made 24.2 times more than the rest of Texas workers.

At the Center for Public Policy Priorities, our goal is to make Texas the best state for people and families to live. Texans love to contribute to and share in the prosperity of our great state. But unfortunately, too many people lack fair access to the conditions necessary to thrive—like a quality education, affordable healthcare, and a good job.

Public policy is one of the most effective ways to address current inequities so that Texans of all backgrounds can thrive. CPPP strengthens public policy to expand opportunity and equity for Texans. Because social justice requires public policy.

While it’s exciting to see our state be ranked number one in income growth, it’s important to remember this prosperity is not shared equitably among Texans.

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