All across the nation, people voting with their feet are choosing Texas. The Census Bureau recently announced that eight of the 10 counties leading the country in population growth were in the Lone Star State. Harris County gained nearly 54,000 residents, the biggest increase in the nation. Other big winners were Collin, Montgomery, Denton, Fort Bend, Bexar, Tarrant, and Williamson counties.Â
All told, Texas’s population rose by 473,453 in 2023. With 30.5 million residents, its population is second only to California. However, tens of thousands of people are fleeing the Golden State. It’s not hard to see why many of them are relocating to Texas: Economic growth is strong, labor markets are thriving, and the cost of living is affordable.
Texas produces $2.4 trillion in new goods and services each year, making it the eighth-largest economy in the world. Its gross domestic product grew at a rate of 7.7% in the third quarter of 2023. In comparison, American GDP growth was about 3.0%. Likewise, Texans’ personal incomes rose 5.2%, significantly greater than the national average of 3.5%. There’s lots of wealth here, and it’s growing quickly.
Based on state labor data, that wealth is also widely available. January job growth was 2.0% compared to the national average of 1.8%. Although Texas shares the national unemployment rate of 3.9%, the state’s labor force participation rate is 1.5 percentage points higher — a major difference showing Texas labor markets are very healthy. Labor is more readily employed and more productive in Texas than just about everywhere else in the country.
Living in Texas is also quite affordable. Home prices are rising, but they are manageable. The median sales price in February was $341,000, about 17% cheaper than the national median of nearly $413,000. Similarly, while consumer prices in Texas are growing more quickly than elsewhere, they are still usually lower. Overall, the cost of living in Texas is 6-8% below the national average. The explanation for higher Texas inflation, especially in urban areas, is probably surging demand rather than flagging supply. This likely reflects strong job and income growth.
The contrasting fortunes of Texas and California illuminate why the former’s model of competitive capitalism outperforms the latter’s model of crony capitalism. California is a high-taxing, high-spending state with a significant regulatory burden. The results are predictable: Labor and capital are fleeing, seeking greener pastures. Fewer taxpayers means less tax revenue, which partly explains the state’s whopping anticipated budget deficit of $73 billion.
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In contrast, Texas’s thriving economy helps to keep the public purse full. Its budget surplus at the start of the previous legislative session was $32.7 billion. It used some of these funds to cut property taxes, invest in public schools, and offer relief to small businesses by increasing franchise tax exemptions and appraisal caps. These pro-family results wouldn’t be affordable if Texas didn’t embrace free enterprise, eschew personal income taxes, and keep regulation light.
Every now and then, someone will try to argue Texas isn’t all that it’s cracked up to be. Obviously there’s room for improvement. But we don’t need to rely on commentators and think pieces to see what’s going on. Foot-voting tells the tale: Hundreds of thousands of people want to become Texans because the opportunities to flourish here are greater than just about anywhere else. That’s something to be proud of.
Alexander William Salter is the Georgie G. Snyder associate professor of economics in the Rawls College of Business at Texas Tech University, a research fellow at TTU’s Free Market Institute, and a state beat fellow with Young Voices.
