The economy of Texas is considered to be one of the largest ones in the United States of America. Since Texas has the second largest population in the States, it is naturally that it produces more products than other states. Apart from this, they have lower tax rates in Texas. Thus, there are only seven states, including Texas, which do not impose personal state income tax. According to K.R. Phillips and C. Slijk (2014), Texas economy is considered to be one of the fastest growing in the USA.
They have grown in the employment rate. The main spheres where people of Texas intend to be employed are the following ones: oil and gas, business services, hospitality, construction, and others. However, Texas economy is dependent on energy prices. Since the energy industry plays a crucial role in the state, when there prices of oil and gas collapse, employment rate decreases.
Nevertheless, the growing demand for the products and services produced in the state is an important way by means of which Texas economy can benefit and continue its growth.As the research by the Federal Reserve Bank of Dallas (2013) has shown, one of the key points which allow Texas economy growing rapidly is immigration to the state which is regarded as a cause and consequence of the economic success of Texas. Immigrants strive to live in Texas due to its fast economic growth.
One more factor which attracts people to the state is the economy’s diversification. Apart from this, Texas economy is characterized by low taxes, acceptable living costs, and a friendly atmosphere for business operations. However, the authors of the research conducted by the Federal Reserve Bank of Dallas observe that there are several important challenges for Texas economy. Among them the following are mentioned: the problem of keeping tax rates low, a necessity to invest in public schools and infrastructure, the immigrants’ low level of education.
Despite the above-mentioned challenges, Texas economy continues showing sustained expansion.
Phillips, Keith R. and Slijk, Christopher. “Texas to Remain a Top State for Job Growth in 2014.” Southwest Economy First Quarter 2014.
Orrenius, Pia M., Zavodny, Madeline, LoPalo, Melissa. “Gone to Texas.” Federal Reserve Bank of Dallas November …