The concept of a Census to identify and enumerate the population of an area dates back more than 5,000 years. Accurate Census counts are important to ensuring adequate federal funding for various programs and appropriate representation in Congress. In addition, the Census is crucial to understanding population and demographic trends to plan for the future.
Undercounts occur for a variety of reasons, including failure to realize the importance of the Census, lack of understanding as to whether and how to respond, inadequate internet access, or fear of providing information. Certain population groups are particularly difficult to count, including the large Hispanic population and immigrants who were intimated by some of the political rhetoric surrounding the 2020 Census.
The Urban Institute estimates that 1.28% of the Texas population was not officially counted. We used those results to project the potential economic costs to Texas over the 2021-30 period. (For more detail, see www.perrymangroup.com.)
We estimate that the direct losses of federal funds due to the undercount could total more than $18.5 billion over the next 10 years in programs that are important to the wellbeing of Texans as well as future economic growth. More than 75% of direct potential losses would likely fall in health programs, an area that is already critically underfunded in the state.
Direct costs lead to negative ripple effects through the economy, multiplying the overall economic harms. We estimate that the undercount could lead to total losses of almost $34.2 billion in Texas gross product and over 358,600 job-years of employment over the 2021-30 period (including multiplier effects).
There are also substantial “downstream” effects. Having less funding for nutrition, education, social services, health care, and other programs can lead to reduced productivity and efficiency, diminished overall health of the population (further reducing productivity), and increased stress on the social services system. Similarly, inadequate infrastructure resources impose costs on local businesses and households and reduce efficiency. We estimate that these downstream costs over the 2021 through 2030 period include another $37.0 billion in gross product and over 426,700 job-years in Texas (when multiplier effects are considered).
Much of this cost could have been avoided. If Texas had achieved the national average percentage undercount, losses would be over 61% lower. Unlike many other areas, Texas did not fund an information effort to encourage participation. If the state would have invested in an effort comparable to that of California, it would have received about $44 in direct federal dollars for every dollar spent.
Since economic activity generates tax receipts, there are also fiscal implications, and the State and local governments stand to lose billions beyond the reductions in federal funds. It’s a lose-lose that will cost Texans dearly over the next 10 years. Stay safe!
