Keith Phillips, senior economist and policy adviser for the Federal Reserve Bank of Dallas, is discussing "Why some states grow faster than others," noting that regional differences have evened out considerably since the volatile days of the 1980s. The reasons for the differences, he said, include which industries are important in a state and how they're doing; business cycle sensitivity and recessions, including things like the housing boom and bust; and weather crises like Hurricane Katrina.
Phillips also offered this observation about his profession: An economist, he said, is "someone who's good with numbers but doesn't have the personality to be an accountant."
Phillips compared average annual job growth over the past three decades among all the states. Idaho ranked 6th. Nevada was first, and Washington 10th. "You all know that obviously Idaho's been a strong growing state in terms of jobs," he told Associated Taxpayers of Idaho. "The strong states tend to be states that are southern, mountain, or agricultural states. The weak states tend to be the older manufacturing states in the northeast and the Great Lakes regions."
Technology also can have impacts - like air conditioning did in his home state of Texas, Phillips said - as can state policies. "So that's where job growth has occurred in the past." As to where it will occur in the future, a key factor is where people want to live, and where businesses can maximize their profits, he said. One study showed that states with "high economic freedom," measured by taxes, size of government, labor restrictions and other factors, had strong job growth. "Within these three subsectors, tax burden was the least significant," he said. "Government size and labor restrictions were most important."