Another way to calculate Texas’ contribution to job creation is to lop off those states that have continued losing jobs and consider only those that have positive growth in employment these past two years. Using this metric, Texas has accounted for 29.2 percent of job creation since the recession ended. These are the facts. You may select whichever metric you wish. Regardless, it is reasonable to assume Texas has accounted for a significant amount of the nation’s employment growth both over the past 20 years and since the recession officially ended. This raises the obvious question – what kind of jobs are being created in Texas? Here are two charts that might help you form an opinion. BIS central bankers’ speeches  3  The first provides a breakdown of employment growth by sector since the recession ended, listing each employment sector by its weight in the employment mix of Texas. The most jobs have been created in the educational and health services sector, which accounts for 13.5 percent of Texas’ employment. The second-most jobs have been created in the professional and business services sector, which accounts for 12.5 percent of the Texas workforce. The mining sector, which includes support activities for both mining and oil and gas, employs 2.1 percent (yes, two-point-one percent) of Texas’ workers. In the second chart, you will see that these jobs are not low-paying jobs.
2  All speeches are available online at www.bankofengland.co.uk/speeches  2  In effect the benefits of deep and liquid markets – ease of price discovery, minimisation of basis risk, tight bid/offer spreads – have outweighed the fact that Libor may not be a perfect match to users’ underlying needs. Whilst users of Libor clearly benefit from this concentration of liquidity, the flipside is that it makes the adoption of alternatives to Libor a very challenging task. These network effects are reinforced by market convention, accounting practices, and the frictional costs of changing firms’ systems and risk models. And use of Libor is perpetuated by the need to hedge and manage legacy positions. Overall, there is substantial inertia in the use of Libor. The case for change The financial system’s Libor dependency matters for two reasons. First, as I have argued, in many applications users would be better served by a near risk-free rate: the bank credit component of Libor is in these cases neither necessary nor appropriate. Derivatives markets in particular could be more effective if there were liquidity in alternative reference rates. The prospect of improved market effectiveness might not, on its own, justify change. A second factor adds powerful impetus to the case for change. As the Governor emphasised, the truth is that the term deposit markets which underpin Libor fixings are no longer a liquid source of bank funding. Even a reformed Libor will need to rely on expert judgement to supplement transactional data. That is not a desirable state of affairs.