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A Look Ahead with The Economist: The Census

Thursday, March 19, 2020

The coronavirus is clearly having notable effects on the markets and the economy, both nationally and in Texas. It is obviously the primary focus of our attention these days, as well it should be. One aspect of the situation which will almost certainly worsen in the weeks to come is the strain on the health care system. One thing we can all do to help prepare for future problems like the current pandemic is to respond to the Census.

Accurate Census counts are far more than just a matter of interest and curiosity. They are important to ensuring adequate federal funding for various programs, appropriate representation in Congress, and an understanding of demographic trends in order to plan for the future.

The economic and fiscal costs of a significant undercount would be substantial. Less funding has the potential to negatively affect the health and wellbeing of residents of the state, as well as reduce job training, infrastructure investments, housing and other important programs and initiatives. Because about 75% of the funding loss is in health-related programs, an undercount can limit the ability to respond to situations such as the current coronavirus pandemic.

We recently analyzed the potential impacts of even a modest undercount — about 1.5% — and estimated that the direct funding losses in Texas would total an estimated $2.1 billion per year. These losses are from reduced funding for programs which are based on the Census. The study of potential economic and fiscal costs was conducted as a public service and is available for free download at perrymangroup.com.

Direct losses generate negative ripple effects through the economy which multiply the overall economic harms. Over the 10 years following the count, total losses including multiplier effects are projected to be $39.2 billion in gross product and nearly 418,500 job-years of employment.

In addition, lower funding leads to substantial “downstream” effects such as reduced wellness, less infrastructure improvement, greater social service needs, and more limited job training. Downstream effects over the 2021 through 2030 period include an estimated $42.5 billion in gross product and nearly 498,000 job-years in Texas — when multiplier effects are considered.

Reduced economic activity would also lead to lost tax receipts including $1.98 billion to the State and $1.78 billion to local entities every year. These amounts are over and above the losses from reduced funding for programs.

Encouraging responses and ensuring all Texans are counted can assure that Texas receives fair and equitable allocations from Federal initiatives over the coming decade and, hence, enhance future prosperity in the state. It can also help in preparing for the inevitable challenges that come our way, from labor shortages to congestion to, yes, even pandemics. Fill it out.

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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.

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