Former Governor Rick Perry liked to refer to Texas's economic growth throughout the mid-aughts as “The Texas Miracle.” Back in '03, the state started awarding a ton of grant money and tax incentives to big business in exchange for the promise that they'd create more jobs for Texans.
But when the Texas Organizing Project and Workers Defense Project set out to uncover just how well that was working out, they came away with one big question: How come huge corporations like Walmart are awarded $6 million in government tax breaks, only to create minimum-wage, no-benefits jobs for workers who will likely still need government assistance to make ends meet? What's the point?
On Thursday, members of both organizations gathered outside Houston City Hall to demand that city leaders make better use of the $229 million the city gives away to private businesses each year, with few checks and balances in place even to track how that money is being spent. In its new report, titled "The Failed Promise of the Texas Miracle," the Workers Defense Project was only able to verify that roughly 12 percent of jobs the city promised through tax incentives were actually created. In fact, only a small fraction of subsidy contracts even required minimum standards for what those jobs should provide, such as how much they would pay and whether there would be benefits.
“This is subsidizing poverty jobs,” said Lola Garcia with TOP, “and we don't need that.”
The advocates said they plan to propose a city ordinance that would impose wage, benefits and safety standards on businesses that get free money from the city. They're also asking for better reporting requirements so that businesses can be held accountable for how they use that money. In fact, one of the biggest problems in Houston, according to the report, was the lack of transparency — job creation data here, it said, was “especially poor.” Even if companies did report job creation, there was little information on who got those jobs and what they looked like. For instance, in Austin, where better data was available, Workers Defense found that 35 percent of jobs created with subsidy money went to people who didn't even live in Austin.
"What our report makes clear is that that money is not being spent to benefit working families," said Workers Defense Executive Director Jose Garza. "Instead of creating good middle-class jobs, our money is being spent to fuel low-wage job growth. There are too many families here in Houston who are working harder and harder and who are falling farther and farther behind."
The report estimated that Texas as a whole spends $1.7 billion per year on tax incentives and grants to attract businesses to Texas and, apparently, create jobs for blue-collar families. To put that into perspective, the report estimates that that money, which may or may not actually be used to perpetuate income inequality, could pay for the tuition of every person who applied for college in Texas, and there would still be $500 million left over at the end of the year.