Perhaps no state embodies America’s bullish, risk-taking mentality more than Texas. It is unabashedly pro-business and very inexpensive, with the second lowest tax burden in the United States, few regulations and hardly any labor unions.
America’s shrinking oil sector has been painful for Texans, but it has also prompted the state to adopt a new economic strategy that reflects two complementary trends in America. One is the huge influx of immigrants over the last 20 years, and the other is the rise of service and knowledge industries to counterbalance the demise of the U.S. manufacturing sector. Texas’s population has more than doubled since 1960–and by next year it will join California as a minority-majority state, meaning more than half the population will be nonwhite. Texas’s immigrant work force is increasingly bifurcated: while waves of Mexican workers labor in the agricultural and service sectors, large numbers of skilled immigrants have arrived to study in the state’s comprehensive university system and take jobs at technology firms like Texas Instruments and Dell, the latter based in Austin.
Many of the educated newcomers have an entrepreneurial bent and hail from Asia, and once in business often take advantage of cheap Hispanic labor. Tushar Patel, a native of Ahmadabad, India, moved to Texas 14 years ago armed with a degree in electrical engineering from the Florida Institute of Technology. After first working in one of Austin’s many tech companies, he started a successful Internet-access service in 1996, Electronic Corporate Pages. Tommy Hodinh, CEO of MagRabbit, a medium-size transportation and logistics firm in Austin, came to the Lone Star State from Vietnam 30 years ago with lots of ambition but almost no cash. “I didn’t have money for a hamburger,” he says. “But you work hard in this country, and you can find a very high level of success.” His firm now does logistics for the biggest firms in the state, including Toyota, which will open a new plant in 2006.
China, with its cheap labor and massive market, may also seem like a great place to make a buck. But that country is still plagued by a host of structural problems. Texans just like to make deals. Tilman Fertitta, CEO of Houston-based Landry’s Restaurants, runs one of the fastest-growing companies in America, with 300 restaurants and 30,000 employees, many of them Latinos, and more than $1 billion in sales. The workers make more money than they would in Mexico or Central America. “In the United States everyone has the same opportunity to make money,” says Fertitta. “In the state of Texas that’s even more true. It’s not a myth.”
Lyssa Jenkens, chief economist for the Greater Dallas Chamber of Commerce, says that immigration “has been essential to Texas’s growth. We could not have filled the jobs without migration, on both ends of the spectrum.” The state comptroller, Carole Keeton Strayhorn, notes that as its oil industry shrank, Texas spent years trying to catch up with America’s transition to a service economy. Now, she adds, the United States is trying to “replicate” Texas.
The Texas story is really about a culture–one that, like the United States, values risk and encourages people to “think big.” “There’s a spirit here that is pervasive–it’s a can-do spirit that dates back to the days of the Wild West,” says Nav Sooch, the Indian-born chairman of Silicon Laboratories, a computer-hardware firm based in Austin. “It’s not uncommon to see bumper stickers that say native Texan, or I wasn’t born in Texas but I got here as soon as I could. Guys like me, we don’t put bumper stickers on our cars, but we feel that way, too.”
