Oklahoma’s economic dynamism — in the eyes of the beholders?
Published: July 22nd, 2013
OKLAHOMA CITY – There is good news and bad news when it comes to the Oklahoma economy. Conclusions about the state’s overall ranking depend, in some respects, on how underlying economic data is scrutinized– and who is doing the scrutinizing.
The state garnered a mixed assessment in a new study of all 50 states from the Urban Institute, deemed the State Economic Monitor, and conducted in collaboration with the Brookings Institute’s Tax Policy Center.
At five percent, Oklahoma had one of America’s lowest unemployment rates over the past year, although the adjusted percentage represented a 0.1 hike in the jobless percentage over the previous year.
Oklahoma’s average weekly earnings for all private sector employees were off 0.2 percent – but that was after the nation’s best improvement of any state in the immediate prior year. Oklahoma’s tax revenues (personal income, corporate income and sales taxes) were off slightly in the period, May 2012-May 2013.
Oklahoma’s housing values rose over the past five years by 4.2 percent, among the nation’s best, but not as strong as North Dakota’s 23 percent increase in value.
In some of the “Monitor” rankings, the Sooner State comes in merely “OK” — slightly above the national average for new housing starts, for example. Another possible negative in the view is that Oklahoma was one of the nation’s six states where public sector employment increased by more than one percent from May 2012 to May 2013
The Monitor took note of Oklahoma’s GDP increase of 2.1 percent over the past year, but that was slightly lower than the national boost of 2.5 percent.
Finance Secretary Preston Doerflinger, Gov. Mary Fallin’s key economic policy adviser, felt the Monitor understated Oklahoma’s strengths: “Oklahoma weathered the worst blows of the collapse better than most states and emerged more quickly than most states, as well.”
In particular, he pointed to the Sooner State’s cumulative increases in per capita person income:
“There is more to Oklahoma’s household income position than the earnings data cited in the study. The study doesn’t cite the fact that Oklahoma’s median household income rose by $4,000 since 2011, placing us No. 1 in the U.S. per capita for family income growth during that time.
“In 2012, Oklahoma’s median household income held steady while the rest of the nation slipped. It’s an important, often unheralded achievement because it shows Oklahomans are getting paid more for their work after decades at the end of the pay scale.”
Doerflinger also contended, in an interview with CapitolBeatOK, the Monitor left out a significant plus for Oklahoma: “Migration patterns aren’t addressed in the study, but those are telling. Coastal residents are flocking to the country’s center because places like Oklahoma are low-cost, high-reward places to do business and raise families. Turning Californians into Oklahomans is becoming a banner industry here.”
As for the upward shift in total public sector employment, an issue that has frustrated conservative activists, Doerflinger deflected blame from Fallin’s administration, saying:
“The growth the study shows in Oklahoma’s public sector workforce reflects hiring by cities, counties and schools, as the state workforce employee count has remained mostly static in recent years. Local entities were hit harder than the state when the Recession came, and in Oklahoma those entities have been restoring cuts that had to be made to police forces, firefighters, municipal workers, teaching staffs, and so on.”
Some support for Doerflinger’s varied contentions can be found in the new book from Meredith Whitney, a prominent banking analyst who appears frequently on business programs and websites. Whitney is well-known for predicting the housing and financial turmoil of 2007-08 that led to the Great Recession.
In “Fate of the States: The New Geography of American Prosperity,” Whitney concluded that America’s “central corridor” states – Texas, Oklahoma, Indiana, Colorado, Utah, North Dakota and Montana – are “best-positioned for fast economic growth and population migration.”
Those states (and some of the other middle American states) have in common certain public policy habits, including pro-business policies, low taxes, low population density and strong balance sheets, particularly in comparison to most other states in the Union. The low population density, Whitney argues, translates into lower housing costs, shorter communities and a higher quality of life.
While she lauds the prospects of states like Oklahoma, she says several other states are now trapped in “the negative feedback loop from hell.” Whitney writes, ““Illinois and New Jersey are the worst because they’ve been doing it the longest. They spent as if the good times would never end and made big promises to state and local government employees based on the deliberate bet that they wouldn’t.”
You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok.