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Another By Donald L. Huddle Houston People figure out how “well off’ they are by two down-to-earth methods. One is to calculate how much their purchasing power, or “real income” \(dollar income corrected for consumer price into compare their incomes with those of other individuals and families. The first test deals with increases in absolute income and the second with how that income is parceled out. Economists sometimes overlook the distribution question, but both measurements have to be made to get an accurate impression of a person’s economic standing. As Thorstein Veblen observed decades ago, one man’s sense of well-being or deprivation depends substantially on how prosperous his neighbors are. Julie Ardery and Bill Bishop in their page 3 article focus almost entirely on this question of income distribution. Let us examine the other factor: how absolute income has risen in Texas. Commerce Department statistics show that in 1955, income per person in Texas was $1,667. By 1973 this figure had risen to $4,558, a total increase of almost 200 percent \(or 6 percent per year comcut the increase in real purchasing power to only about 3 percent per year, that’s nothing to sneeze atit means real income is doubling every 23 years. But did the lower income groups gain along with the rest? The answer again is yes. U.S. Labor Department data show one of every six Texans earned less than than $3,000 in 1950, but only one out of 25 earned less than this amount \(corprovement was similar for blacks and other minorities; two out of five earned less than $3,000 in 1950, but by 1973 all but one in eight had reached or sur as sed the $3,000 mark. If the standing of all Texans has thus improved in terms of real income, then why do pre-tax, pre-transfer income , shares seem increasingly maldistributed? My answer is that the pre-tax, pretransfer data do not very accurately measure how well either the rich or the poor have fared, because they leave out of account billions of tax dollars transferred from some citizens to others via federal government expenditures. Robert Lampman notes that national so MAY 26, 1978 Bishop present for 1953 are different from those they capture in their 1973 data. High-wage industries have made of Texas a profitable home, and no longer do they regard the state as a passive, exploitable colony. This development accounts, in part, for the rise in the share of income held by high-salary technicians and managers figuring at the top of the Ardery-Bishop scale for 1973. Further, the decline in earning power of Texans in the bottom half of the income scale represents a distinct advantage for industries dependent on labor-intensive technologies. The drop in the share of poor and working class incomes in Texas is dramatic evidence of the very important “opportunity” they offer for such industries. These Texans are part and parcel of a “good business climate” they represent cheap labor. They are, to use the antiseptic phrase of the urban economists, a “locational advantage.” Right along with abundant sunshine, energy resources, water, and land, Texas promises corporate America the exploitable resource of a bounteous supply of labor. To amplify the significance of the Ardery-Bishop study, we offer the results of a comparative analysis we have made of the sources of low income in Texas and the Northeast. Using 1970 Bureau of Labor Statistics profiles of ghetto employment,* we have found that the sources of poverty in Dallas and * The data used describe the conditions of employment found among people living in statistically defined sections of the “inner city” as designed and measured by the U.S. Bureau of the Census, Bureau of Labor Statistics. Houston differ greatly from the sources of material deprivation in the inner cities of New York and Boston. Ghetto residents of the two Northeastern cities are twice as likely as their Texas counterparts to be either unemployed or unwilling to take the lowpaying jobs available to them. The poor of Dallas and Houston are two and one half times as likely to be working for less than $2 an hour as are inner city wageearners in Boston and New York. More precisely, 13 percent of Dallas’ inner city workers and 12.1 pecent of Houston’s are employed well below the minimum wage. This state of affairs compares quite dramatically with that of New York and Boston, where only 5 percent and 4.6 percent of ghetto dwellers respectively work for less than $2 per hour. The bottom line is this: the source of poverty for 42.5 percent of the inner city poor of New York and Boston is a lack of jobs, while 80 percent of ghettoites in our two most “dynamic” and “opportunity-rich” cities stay poor because of the sort of jobs they have. It is small wonder then that part of the “opportunity” Texas offers is the labor pool which keeps us in the company of the other “rising” Sunbelt states with growth in low income economic activities that are on the decline elsewhere. The bloom is off the rosethe rise of the Sunbelt . and Texas “opportunity” are slogans contradicted by the bitter experiences of many who live here. What Texans share with Americans everywherethe increasing maldistribution of income and declining control over our jobs and livesfar outweighs the differences regional boosterism would try to hide. Things here are not materially better because others are without jobs and Texans are employed, or because Texas is a land of opportunity for the few and the Northeast a land of past opportunities for the many. Therefore, it would be shortsighted and dangerously provincial to identify the issues raised here as exclusively “Texan” in nature. The evidence of declining opportunity for poor and working class \(and an increasing percentage of economic boom, should be enough to make us realize that the state has a corner on neither affluence nor social and economic injustice. Texas may be the state most Observer readers live in, but it is also a “state of mind” that nurtures, in part, the dreams and mythical heritage as well as the economic contradictions shared by all Americans. David Perry and Alfred Watkins, both members of the faculty of the Department of Government at the University of Texas at Austin, are the editors of the recently published book, The Rise of the Sunbelt Cities.