Texas is known for its exceptional successes in leading the country in both job creation and economic opportunity. Yet, families continue to struggle to fill their grocery baskets or find affordable homes.
I don't like when politicians brag about the unemployment rate because it means nothing to a struggling mother who can't afford to lose her job and can't afford the daycare cost for her only child. Likewise, the statistics that governors use to measure their states' wealth mean nothing for a struggling father who can't afford to take a day off to be next to his sick child because he is worried about losing his health insurance.
The Texas unemployment rate is lower than the national average in big cities, but small towns are struggling, and politicians are looking the other way. The employment rate is low, but the minimum wage leaves struggling middle-class families struggling to pay their mortgage or provide their kids with a good Christmas.
Not everyone in Texas is struggling. The rich continue to get richer. Billionaires in Texas wealth increased dramatically in the last 18 months. Bert Beveridge, Tito's Vodka founder, Robert Rowling, Omni Hotels and Gold's Gym partner, and Kelcy Warren, Energy Transfer Partners owner, saw their wealth increase above 50%.
So, we know billionaires are getting richer in Texas. But, unfortunately, that's not the case for the middle class. According to Bloomberg, "Lower-income and middle-income people face higher effective tax rates in Texas than California." So, let's examine some numbers.
Median household income by income tier in Texas
- Lower Income: $25,581.00
- Middle Income: $78,866.00
- Upper Income:$190,778.00
According to a Pew report, the middle class is shrinking because more people are getting poorer and rich people are earning a bigger share of the economic pie. In addition, according to Investopedia, "There is more polarization of where growth is coming, at the extreme bottom and top of the economic spectrum. So, it is not just that people are falling out of the middle class into the lower class—they are also rising into the upper class, albeit in smaller numbers."
So, let's see what it takes to be considered a middle-class employee in Texas.
A recent Zippia report lists the salary you'd need to earn in Texas to be middle class based on home average costs and other expenses. For example, as an employee, to be considered middle class in Texas, you have to earn $55,605, based on an average monthly car payment of $375, a student loan of $204, and an average mortgage payment of $1,089.
Most middle-class people in Texas can't afford to buy homes anymore. The average sales price rose 18.99% from $365,495 to $434,910. Middle-class families can't afford to own their homes anymore.
The average Texan family is struggling to put food on the table. The Consumer Price Index (CPI) measures the average change in prices over time for a consumer goods and services market basket. In North Texas, the average food prices increased 5.7 percent, and energy prices surged 29.6 percent last year.
I'm not going to mention college tuition, medical care costs, or daycare expenses, but I guarantee you that they are all rising at a rapid rate. So, if your income is not increasing at the same rate, you will be poorer and poorer year after year.
Texas politicians need to pay extra attention to the middle class and lower prices, and increase their ability to earn money.
Mechele Dickerson is a professor of law at the University of Texas at Austin, who started a few years ago, "To help Texas workers achieve the middle-class goal, Texas businesses must provide middle-income jobs. Texas politicians must be willing to support policies that provide affordable housing — rented or owned — for middle-income households. Politicians need to keep college affordable and help workers find safe and affordable child care. Until Texans can afford to pay for the services that will help them become and remain members of the middle class, middle-income workers will continue to fall behind."
Professor Mechele Dickerson's words are as true today as they were true in 2016.
The Middle Class in Texas is in trouble. Stay tuned.