Features

November/ December 2013 The 2013 Opportunity Index

How well is your state helping you succeed?

By Anne Kim

Historians in Texas mark January 10, 1901, as the day modern Texas began—the day when the Lucas No. 1 well struck oil at the Spindletop field near Beaumont. As the authors of the Texas Almanac write, “The gusher spewed oil more than 100 feet into the air until it was capped nine days later. With that dramatic fanfare, Texas’ economy was wrenched from its rural, agricultural roots and flung headlong into the petroleum and industrial age.”

Since that fateful day at Spindletop, the mystique of Texas—as the land of big dreams, big wealth, and unlimited opportunity—has become as outsized as the state itself. As a mecca for corporate America, Texas is now home to more than fifty Fortune 500 companies, including such corporate behemoths as ExxonMobil, AT&T, Dell, Lockheed Martin, Hewlett-Packard, and, of course, Texas Instruments. The state also boasts an outsized share of the nation’s millionaires, trailing only California, New York, and Florida in the share of residents whose net worth tops $2 million or more. In the exclusive Houston neighborhood of River Oaks, where the median home price is $3.5 million, sprawling colonnaded estates fit for J. R. Ewing average more than 7,500 square feet of living space.

Without doubt, Texas is doing great by its corporate citizens and their executive elite. Texas Brags, a Web site run by the office of Governor Rick Perry, puts it with typical Texas swagger: “Texas is a land of ongoing success and endless opportunity.”

But when it comes to the people of Texas versus its companies, the promise of opportunity rings hollow for many.

Right off I-45 in Houston—across the freeway from the Lamborghini dealership—is Remington Ranch, a subdivision of cookie-cutter tract homes built mostly in 2005 and 2006 and now a casualty of the housing crash. Of the thirty properties for sale one day this fall, fifteen were in foreclosure. The schools that service this neighborhood—Ralph Eickenroht Elementary, Bammel Middle School, and Andy Dekaney High—receive among the worst possible ratings from GreatSchools.org. At Eickenroht, for example, third-grade math scores in 2011 were 24 percentage points below the state average.

In the rest of Harris County, where Houston is situated, neighborhoods like Remington Ranch are much more typical than ones like River Oaks. With a population of more than four million, Harris is the largest county in Texas and the third-largest county in the United States. The Houston-based nonprofit Children at Risk says that as many as 27 percent of children in Harris County were living in poverty in 2010, while more than 19 percent lacked health insurance. Statewide, the Kaiser Family Foundation says 24 percent of Texans were uninsured in 2011, which is worse than in Mississippi. Education is a problem too. In 2011, 24 percent of Harris County schools failed to meet federal standards for Adequate Yearly Progress under the No Child Left Behind Act. Only 19 percent of Texas students go on to finish college.

Nevertheless, it’s the state’s business-friendly image that has garnered the lion’s share of public accolades and fueled the state’s reputation for opportunity and economic growth.

Chief Executive magazine, for example, has ranked Texas the nation’s “best state for business” nine years running. Texas has also dominated CNBC’s “America’s Top States for Business” ranking since its launch in 2007, placing first in three of the last seven years and second in 2013. According to the running tally of these accolades maintained by the state, Texas also won the 2012 “Governors Cup” from Site Selection, “the magazine of corporate real estate strategy and area economic development.”

It’s certainly possible to overstate the impact these rankings and public recognition have had on the public policy choices Texas has made. But it’s also likely no coincidence that the “winning mix of low taxes, reasonable regulatory structure, fair court system and world-class workforce” that Texas Brags credits for the state’s success tracks almost precisely with the factors most praised by CNBC and other business-oriented press. Indeed, the most heavily weighted factor in CNBC’s rankings is the “cost of doing business”—that is, the rate of state and local taxes, as well as the cost of utilities and worker wages. As one CEO told Chief Executive, “The regulatory and tax environment in Texas makes it my first pick.”

But imagine if Texas—and every other state—got the spotlight not just for their success in growing business but for their ability to grow opportunities for their citizens, and at all levels of the income ladder. If states were graded not just on the basis of their corporate tax rates but also on the strength of their investments in education, how would Texas—and neighborhoods like Remington Ranch—be different?

Enter Opportunity Nation.


The Opportunity Index, developed by Opportunity Nation and Measure of America, is based on sixteen indicators in three categories: jobs and local economy; education; and community health and civic life.

  • Jobs and local economy indicators include unemployment; median household income; poverty rate; income inequality; and access to banking institutions, affordable housing, and the Internet.

  • Education indicators include preschool enrollment; on-time high school graduation rates; and the share of adults with an associate’s degree or higher.

  • Community health and civic life indicators include membership in social, civic, sports, and religious groups; volunteerism; the percentage of “disconnected” youth (youth not in school and not working); violent crime rates; the availability of primary health care providers; and access to grocery stores and produce vendors.

Two years ago, Opportunity Nation, a Boston-based nonprofit, launched the Opportunity Index in partnership with the research group Measure of America. This index is an effort to shift the national conversation around opportunity and to redefine what “opportunity” means—not just in general, but in terms of who benefits. Their measure challenges the business-centered rankings of state opportunity and growth that now dominate the popular press. Their focus is on people—in particular, young people aged sixteen to twenty-four, who are finding opportunities much more difficult to come by today.

The Opportunity Index ranks states based on sixteen indicators that Measure of America codirector Kristen Lewis says are essential to the “infrastructure of opportunity” for individuals. These indicators include not just the basics—the availability of jobs, affordable housing, and quality education—but also what a growing body of research shows is critical to upward mobility: social capital and civic life. These factors make up, at the individual level, the equivalent of the “business-friendly” environment that company-focused rankings measure.

Anne Kim is Editor of Republic 3.0.

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