Low Wages, but More Jobs in Low-Tax Texas

In Texas, where there's no state income tax and few restrictions on business, Craig LeTulle is living the American dream on his ranch. He doesn't think President Barack Obama has any right to take it away with tax hikes targeting the rich.

Obama says it's only fair for those who can afford it to pay a little more to help the country get its fiscal house in order and recover from a deep economic downturn.

Republicans call it class warfare and an attack on job creators. They insist that cutting taxes and government spending is the way to spur economic growth and earlier this week blocked Obama's $447 billion jobs bill.

For LeTulle, it's personal.

Despite his success, he doesn't consider himself rich. But his commercial roofing business depends on investments made by the very people who'd see their bank accounts shrink if taxes go up.

"The more money they take out of that man's pocket and send to Washington, the less money he has to put out in the community and to build things," he said.

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LeTulle wants his taxes to be spent efficiently on things like roads and police, not wasted on a bloated bureaucracy and programs that feed a destructive "entitlement society."

"Washington has to understand: it's not their money," LeTulle told AFP.

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---'In Texas we don't spend much, we don't get much'---

The United States is embroiled in an impassioned debate over basic economic principles and the 2012 election is shaping up to be a referendum on the role of government in society.

Texas Governor Rick Perry may be trailing in the polls for the Republican nomination to challenge Obama, but his governing philosophy of low taxes, limited government and generous opportunities for business has been embraced by all the Republican White House hopefuls.

There are few places in the United States where this conservative policy has been more thoroughly applied than Texas.

It is one of the only states in the nation without an income tax. State legislators meet for just 140 days every other year and lawmakers are paid an annual salary of just $7,200. The state government spends 22 times more on business and economic development than it does on regulatory agencies.

Perry says this pro-business approach is responsible for the "Texas Miracle": 40% of jobs created since the recession officially ended in June 2009 were in the Lone Star state.

Critics note that most of those jobs were low-wage positions and say the social cost is simply too high.

"The Perry model would be a disaster for the United States," said Democratic state representative Garnet Coleman of Houston.

Texas has among the highest number -- and percentage -- of people living in poverty. Ditto for minimum wage jobs, people without health insurance and high school drop outs.

School test scores are among the lowest in the nation, as is state spending per student. The social safety net is among the least generous and most highly restricted in the country. And Texas has the dirtiest air in the United States.

"In Texas we don't spend much, we don't get much, that's the Texas Miracle. No public sector," said labor economist Daniel Hamermesh of the University of Texas - Austin.

While the business climate may be welcoming when it comes to taxes and loose regulations, Texas does not have a sufficiently educated workforce to draw many high-wage, high-skill positions, Hamermesh said.

"You can have all the deregulation you want but you're not going to get the kind of job creation that leads to a saner and also in the end a wealthier society," he told AFP.

Texas Republican National Committeeman Bill Crocker disagrees.

"At the end of the day, freedom and opportunity will produce more for everybody in the population than the nanny state can produce," he said.

Generous welfare benefits simply lock people into a cycle of poverty, Crocker explained. And even a low-wage job is better than no job.

---- "I work hard but still, it's not enough" ----

Mary Soto, 29, makes $12.25 an hour -- nearly twice the minimum wage -- as a full-time dental assistant. Her husband is working, too, but they still rely on an Austin food bank to keep their four children from going hungry.

"I work hard but still, it's not enough, I'm still struggling. I'm still trying to find a way to pay what life throws at me," Soto said.

"You go to school and get a good education and all your problems will go away, that's what I thought. But no, they don't go away. They're still here."

Food banks are seeing an increasing number of working families like the Sotos, said John Turner marketing director of the Capital Area Food Bank of Texas which serves 48,000 people a week.

He's worried about Republican moves to cut funding to the programs that provides 20 to 30 percent of the food on his shelves.

There are too many people who have to choose between paying the rent or the grocery bill and he's not sure how he'll feed them all without government help.

"You might be surprised about the face of hunger today," Turner said.

"It's about a livable wage and until we fix that I think the situation is going to continue for some time."

Source-AFP