Texas. With an energy sector that’s unmatched nationwide, population growth rate that’s quadruple the national median, and a tech industry that is quickly rivaling Silicon Valley, the Lone Star State is on a trajectory to become the most powerful state in America. And soon. Forget California’s massive economy and entertainment industry, or New York with its global hub for finance, fashion, and the arts. It is Texas that’s on a path to totally overshadow the rest of the US, and the facts back this up. But how is this possible? How has a scarcely inhabited and desolate wilderness on the distant fringes of the declining Spanish Empire transformed into a global powerhouse in just a few centuries? Let’s get into it. Sure, Texas might not be the biggest state by land or population. However, it ranks near the top for both categories, as well as most other areas of influence. Even better, it’s gradually climbing the ranks across a wide range of metrics, some that you may not even be aware of. Let’s start with population. In 2020, California had as many as 10 million more people than Texas. That’s 39,538,223, to be precise. Now, 10 million people are by no means a small difference. But there’s a key piece of information missing here. Texas has also had the largest population increase in the last decade out of all U.S. states. An important thing to track because with more people, comes more political power, particularly in the US House of Representatives, but we’ll come to that in a moment. First, a brief walk through the state’s history will tell you just how large this population increase has been, and why California should be getting nervous. Six U.S. censuses would pass before Texas joined the U.S. The first two were dominated by Virginia as the most populous state, a title overtaken by New York at the third census and kept for an impressive 150 years. What disrupted this status quo was the pace of U.S. settlers moving to the western and southern states in the mid-20th century, giving states like California, Florida, and Texas a significant boost. So, in the 1960s, Texas ranked sixth by population. With its 9.5 million residents, it was only behind Ohio, Illinois, Pennsylvania, California, and New York. The 1970 U.S. Census marked the downfall of New York, getting knocked from the first position by California. Texas, for its part, moved to the fourth place with an astonishing 16.9% increase in population, amounting to almost 11.2 million people. The 1980 U.S. Census saw this number rise to 14.2 million, designating Texas as the third most populous state in the U.S. While Texas saw an impressive 19.4% population increase at the 1990 Census, it was still ranked No. 3, only behind New York and California. The 1990s were also when the more-than-10-million gap between California and other U.S. states first appeared. It would take another decade before Texas assumed the high second place it holds today, surpassing 20 million residents at the 2000 U.S. Census. Though California was still firmly planted at No. 1, Texas boasted – and still does – a much faster growth rate than the Golden State. This rang true in the 2010s as well, when Texas grew by 20.6% to reach a figure of 25 million people. In comparison, California grew twice as slower, leaving it with 37.2 million people at the 2010 Census. This gap would only widen in the 2020s, when Texas grew by 15.9% to 29.14 million people, while California only grew by 6% to 39.54 million people. If you do the math, you’ll realize that the overall gap between California and Texas narrowed from 13 million to only 10.4 million during the first two decades of the 21st century. More importantly, this gap has only kept narrowing since. When the COVID-19 pandemic struck in 2020, California faced an unprecedented scenario in its long history of demographic dominance. It started losing people. By July 2022, an estimated 700,000 people left California. Throw the 200,000 new residents into the mix, and you get an alarming population decline of roughly half a million. Texas, on the other hand, faced no similar scenarios. In fact, its population grew by almost 900,000 people between April 2020 and July 2022. So, for the first time in recent history, the gap in population between California and Texas dropped below 10 million. California had a little over 39 million people, while Texas had over 30. Unsurprisingly, Texas isn’t slowing down. The Lone Star State added some million people to its overall population in the last two years, while California’s growth was measured in thousands. This puts the gap between California and Texas to fewer than eight million people as of 2024. If Texas keeps up with the current growth rate, it’s expected to surpass California sometime in the 2040s. So let’s talk about that political power. The U.S. House of Representatives, the lower chamber of the U.S. Congress, is population-based. That’s how Texas managed to add two new representatives in a relatively short period of time, bringing its total to 38, which is 8.7% of the total 435 seats. Texas also accounts for over 7% of electoral votes needed to win the U.S. presidency. So, it’s no wonder the Lone Star State is one of the most sought after states in the presidential elections. In recent history, the state has gone decidedly Republican. The last time Texas voted blue was in 1976. The state has also been at the forefront of many prominent social issues in the U.S., including immigration and healthcare, with Texas often setting the tone for national debates. The state’s political clout is further amplified by its economic power. However, Texas’s economic power alone is arguably the No. 1 reason why the Lone Star State is expected to become the most powerful state in the U.S. Let’s break this down. First up – what’s the current state of Texas’s economy? When measured by nominal gross domestic product (GDP), Texas has the second-largest economy in the U.S. In 2023, Texas’s GDP was $2.56 trillion, a 6.7% increase from 2022. This means that Texas accounts for 9.37% of the national GDP of the U.S., the largest economy in the world. It shouldn’t be surprising that if it were a country, therefore, that Texas would rank among the top 10 largest economies in the world. In fact, it would assume the impressive No. 8 spot, surpassing economic powerhouses like Brazil, Canada, Russia, Australia, and Spain. That’s how powerful Texas truly is. But where is this power coming from? In other words, how has Texas become an economic powerhouse in its own right, competing for the title of the U.S.’s most powerful state? As we’ve previously mentioned, it’s a little bit of everything. Texas is home to several major business hubs, each with a different economic strength. Take Austin as an example. The state capital of Texas is all about tech. So much so that many experts claim it now rivals Silicon Valley in sheer innovation and growth. Then, you have Dallas, the finance powerhouse of the state. As a major center for banking, commerce, and industry, Dallas has attracted numerous Fortune 500 companies, while continuing to grow as an international financial hub. Next, there’s Houston, which stands out as the energy capital of the world. Home to a large concentration of oil and gas companies, Houston’s economy thrives on energy, making it a critical player in both national and global markets. And don’t forget San Antonio, with its robust military presence, tourist appeal, and rapidly expanding cybersecurity industry. Each of these cities contributes to Texas’s overall economic might, making the state a formidable contender on the national stage. But with Texas, it’s not just about the major cities. There are also important industries like aerospace and agriculture evenly spread out across the state, providing a strong backbone for the economy. Interestingly, it’s this spread-out growth that sets Texas apart from most U.S. states. There isn’t a single area expanding rapidly within the state; the whole of Texas is booming. This has also been the case with the state’s population growth, undoubtedly fueled by the booming economy. However, the undisputed winners in this regard have been the Dallas Fort Worth and the so-called Texas Triangle urban areas. Dallas Fort Worth, or DFW for short, has added almost one and a half million people to its population since 2010. As of 2024, some 8.1 million people call DFW home after the metropolitan area in the north of Texas experienced the largest population growth of any similar area in the country in 2023. Overall, this impressive figure puts DFW at No. 4, behind heavy hitters like Greater New York, Greater Los Angeles, and the Greater Chicago Area. More importantly, DFW is the only metropolitan area at the top to experience population growth rather than decline in the last few years. This has allowed it to come really close to the Greater Chicago Area and will likely surpass this famed metropolitan area sometime in the mid-2030s. What’s even more impressive is that DFW is just one of the booming metropolitan areas within the so-called Texas Triangle. This region of Texas includes areas like the Houston, San Antonio, and Austin Metropolitan Areas, which also means it encompasses all the state’s largest cities. So, even though the Texas Triangle is only 60,000 square miles, not even a quarter of Texas’s total land area, it houses more than 22 million people. That’s three out of every four Texans! This also makes the Texas Triangle the fourth most heavily populated megaregion in the U.S. The three larger megaregions are as follows: No. 1 – the Great Lakes megalopolis, covering metropolitan areas like Chicago and Detroit and boasting almost 60 million people. No. 2 – the Northeast megalopolis, stretching from Boston to Washington D.C. and including major cities such as New York City, Philadelphia, and Baltimore in its 50-million population. And No. 3 – Southern California, which includes the sprawling metropolitan areas of Los Angeles, San Diego, and Riverside. This region houses 24 million people and represents a major cultural, economic, and entertainment center. You’ll notice that Southern California and the Texas Triangle are the only top megaregions mostly contained within a single state’s borders, further emphasizing the power of California and Texas. But while California still beats out Texas in some regards, there are a few key economic areas where Texas is either catching up or straight-up leading. Take exports as an example. Texas is the U.S.’s top exporter by a margin. In 2023, Texas exported $444 billion worth of goods. In comparison, California only exported around $178 billion. This means that the exports from Texas to Mexico alone, estimated at some $144 billion, are almost enough alone to make Texas the biggest exporter in the U.S. Another category where Texas leads the race is the number of Fortune 500 companies that are headquartered in the state – 55, closely followed by California with 53 . This prompted the Governor of Texas, Greg Abbott, to call the state “the headquarters of headquarters.” Here are some of the most notable Fortune 500 companies based in Texas: Caterpillar, headquartered in Irving, DFW Charles Schwab, headquartered in Westlake, DFW Hewlett Packard Enterprise, headquartered in Spring, Houston metropolitan area JCPenney, headquartered in Plano, DFW Oracle, headquartered in Austin Tesla, headquartered in Austin Interestingly, roughly 40% of all companies that have relocated their headquarters to Texas in the last few years have done so from California, serving as yet another indicator of the turning tides. Even the major corporations operating but not headquartered in Texas, such as Office Depot, CVS Pharmacy, and Coca-Cola immensely contribute to the state’s economy and job market. Other major corporations might not intend to move their headquarters to Texas just yet, but they are increasing their office presence in the Lone Star State. Apple, one of the largest tech giants in the U.S., has built a $1-billion 3-million-square-foot campus in Austin. With an initial capacity of 5,000 employees, the Texas campus is only behind Apple’s Cupertino, California headquarters, home to 12,000 employees. Google seems to have similar plans, announcing a $330 million investment into a Texas expansion in 2023. The tech giant plans to spend another $600 on building a new data center site in Red Oak, DFW. It has also been recently revealed that Meta, another tech powerhouse, plans to build a data center campus in El Paso, spanning some 1,000 acres of land. But tech companies aren’t the only ones that can’t seem to get enough of Texas. Goldman Sachs, the leading global investment bank, has also broken ground on a brand-new Dallas campus poised to be the company’s largest hub outside the New York headquarters. The headquarters, located in Manhattan, houses around 8,000 employees, while the planned Texas hub will be able to accommodate 5,000 of them. Now, you might wonder – what is it about Texas that makes all these major players want to establish a significant presence there? The answer is simple – Texas is a true friend to businesses. What does this mean? Well, first and foremost, there are no state income taxes and capital gains taxes. This means both individuals and businesses can keep more of their earnings, which is a rare feat for most U.S. states. But Texas isn’t just friendly to large corporations. That’s why small business owners also have it good in Texas, which allows them to get higher loans for every employee they have than other states. This business-friendly environment and a highly skilled and diverse workforce is reason enough for businesses big and small to find a safe haven in Texas. But they are far from the only reasons why businesses – and people – are flocking to this state. The real estate market is another major reason. As of May 2024, the median listing home price for a home in New York City is $838,000. For a San Diego home, it’s just shy of a million dollars. However, if you want to live in San Francisco or Los Angeles, you’ll likely spend over a million dollars, as the median listing prices for these cities are $1.2 and $1.3 million, respectively. Now, take a look at Texas home prices, and these numbers start to go down. For Austin, arguably the most expensive city in Texas, the median listing price is $650,000, half of what you’re expected to pay for a Los Angeles home. To live in Dallas, you’ll need to pay some $477,000, while Houston homes average at $340,000. That’s almost four times less than a San Francisco home! With this in mind, it shouldn’t be surprising that Texas managed to overtake California as the strongest housing market in 2023. Over 80,000 homes were available for sale during this year, more than doubling the inventory from the previous year. Thanks to a high volume of new construction, this number is only expected to grow, offering new residents abundant opportunities to settle in the Lone Star State. Oftentimes, these new residents are part of Texas’s booming civilian workforce of 15 million people, the second-largest in the U.S. New and existing residents can also get stellar education in Texas, home to over 300 trade schools and 125 technical programs. Thanks to innovative solutions like the Texas Reskilling & Upskilling through Education (TRUE) program, the Texan workforce can also be additionally trained to work in high-demand sectors. All these factors have allowed Texas to assume a leading role in national job creation, beating Florida, California, and New York. Another factor that has allowed Texas to entice new people and businesses and, thus, become more powerful by the day is connectivity. The famed Texas Triangle, home to the state’s four main urban centers, lies close to the midpoint of the contiguous U.S. As a result, the region benefits from stellar transportation links, making travel and commerce between Texas and the rest of the U.S. – and the world – both efficient and convenient. So, it’s no wonder that the Dallas Fort Worth International Airport ranks among the three busiest airports in the entire world by number of total seats. The only busier airports are the Hartsfield-Jackson Atlanta International Airport with almost 5.5 million seats and the Dubai International Airport with 4.9 million seats. The DFW airport is also the primary hub for American Airlines, the largest airline in the world by fleet size and passengers carried. Another top global player, Southwest Airlines, the largest low-cost carrier in the world, also has a primary hub in Texas. This time, it’s the Dallas Love Field Airport, located 6 miles northwest of downtown Dallas. Texas also boasts notable cargo airports, like the Perot Field Fort Worth Alliance Airport, a public airport located 14 miles north of the central business district of Fort Worth. This airport also serves as a southern regional hub for FedEx Express and a focus city for Amazon Air, making it a key player in the logistics and distribution industry. What further aids this crucial industry is the vast and remarkable infrastructure in Texas. Simply put, Texas has the means to deliver products anywhere in the world. With a total of 314,000 miles of public roads, over 10,000 miles of track, and a total of 395 airports and 19 commercial seaports, Texas’s infrastructure supports seamless transportation and logistics operations. This extensive network enables efficient movement of goods both domestically and internationally, solidifying Texas’s position as a key player in global trade. Additionally, the state’s strategic location and well-developed infrastructure make it a highly attractive destination for businesses looking to expand their reach and streamline their supply chains. This just leaves us with one more major factor contributing to Texas’s leading position in the U.S. The natural resources. As you’ll soon see, these resources are singlehandedly driving much of the state’s economic prosperity. Resources that are much easier to have when you control one of the biggest states in the country. While it’s the second-largest state in the U.S., it’s still overshadowed by Alaska, with its mind-boggling 663,268 square miles of total area. Since Texas can’t just add a few extra acres to its 268,820 square miles, Texans are bound to learn to live with their state being second in size and all the jokes Alaskans make about it. The most famous one states that you could even divide Alaska in half, and Texas would still fail to snag that coveted No. 1 spot. Even worse, it would then be the third-largest state in the U.S. But while Texas might have nothing on Alaska, its size is far from a joking matter. After all, we’re talking about a state that occupies 7% of the U.S.’s total land area. And amongst this sprawling land are massive oil and gas resources. So massive that Texas has been a leading producer of oil and natural gas in the U.S. for decades, making it the country’s most valuable geopolitical asset. But how has Texas come to be in charge of almost half of the U.S.’s total oil production? Let’s take a quick look back at the state’s history to answer this question. The oil industry in Texas is over a century old. This precious substance was discovered by accident in 1894 while the American Well and Prospecting Company was looking for water in Navarro County near Corsicana in East Texas. Some four years would pass before the first modern refinery was built on this oilfield. The success of the Corsicana field, paired with the increasing demand for oil worldwide, led to an intense search for new fields throughout Texas. In 1901, the explorers struck gold – or should we say oil – discovering the largest oil field in the world by that point in the town of Beaumont. Unsurprisingly, this discovery set off an oil frenzy in the region, leading to a 250% increase in population of Beaumont within 30 days of the discovery. By 1903, this number rose to 50,000 people, an almost 500% increase from the 1900 numbers. The discovery of the Beaumont oil field led Texans to another conclusion – there’s more oil to be found in the great state of Texas. This conclusion led to the discovery of the oil fields in the Permian Basin in the 1920s. The Permian Basin spans over 75,000 square miles across West Texas and southeastern New Mexico and houses over 7,000 oil fields. Almost instantly, this region became one of the most prolific oil and gas regions in the world, allowing Texas to emerge as a dominant oil producer. Thanks to Texas, the U.S. became the world’s largest oil producer, embracing all the political power that comes with this precious resource. During World War II, nearly six out of every seven barrels of oil used to fight the Axis powers came straight from the U.S., most of them originating in Texas. The oil boom allowed Texas to transform from a predominantly rural state into an economic and industrial powerhouse. It also allowed Texas to essentially become self-sufficient, a nearly independent state within the U.S. However, post-war oil demand soon rose sharply, significantly outpacing the U.S.’s production. In other words, for the first time ever, the U.S. had to get some external help in the oil department. So, in 1946, the first large-scale oil shipment arrived in the U.S., straight from Kuwait in the Middle East. As it turned out, this would only be one of the many shipments to follow, as the U.S. essentially became a net oil importer by 1948. Given how crucial oil is for the U.S. economy, it’s easy to see how this shift wasn’t exactly ideal. It left the U.S. vulnerable to fluctuations in global prices and geopolitical events that could disrupt the flow of oil. This vulnerability was particularly evident during the 1973 oil crisis when oil-producing Arab countries imposed an embargo on oil exports to the U.S. in response to its support for Israel during the Yom Kippur War. Throughout all the turbulence, Texas remained a key player in the U.S. oil industry, contributing significantly to domestic oil production and helping mitigate the impacts of the oil crisis. By 1974, the Permian Basin was producing some 25% of the U.S.’s total oil supply. Unfortunately, the geopolitical chaos caught up to Texas in the 1980s, pushing the state into a deep recession and scrapping some quite ambitious projects due to the lack of oil money. By 2007, the oil production in the Permian Basin hit an all-time low, spelling far-reaching economic trouble for the region. But then, Texas did what it does best – it adapted and overcame the challenges. Texan engineers working in the Barnett Shale region in northern Texas managed to combine two technologies – horizontal well drilling and hydraulic fracturing – creating a revolutionary technique that would transform the oil and gas industry. Hydraulic fracturing or fracking. This innovative method allowed for the extraction of oil and gas from previously inaccessible shale rock formations, leading to a boom in production and once again revitalizing the Texas oil industry. This led to the drilling of thousands of new fracking wells all throughout Texas, including the Eagle Ford Shale in South and Southeastern Texas and the good-old Permian Basin. Luckily, the Permian Basin turned out to be packed with petroleum-rich shale rocks, allowing the oil field to once again be responsible for 25% of the total U.S. oil production. It also led to the discovery of notable oil fields in the Permian Basin – some of which are among the largest of its kind in the world – including the Spraberry Trend and the Wolfcamp Shale. Together, these fields are considered the second-largest in the world, only behind South Arabia’s biggest offering – the Ghawar Oil Field. Similarly, the Eagle Ford Shale is so massive that it surpasses Russia’s largest oil field – the Samotlor Field in Siberia. But what sets the Texan oil fields apart from their global competitors is their strategic location. You see, these fields are located in the heart of Texas, where most Texans live, and vast infrastructure has already been built. For instance, the famed Permian Basin is located near the Texas Triangle and is well-connected to this crucial region by highway and rail. This makes it seamless to transport this oil to the rest of the U.S., as well as markets around the world. In contrast, the oil fields of Saudi Arabia are located in sparsely populated deserts blocked by major maritime choke points, such as the Strait of Hormuz, the Bab-el-Mandeb Strait, and the Suez Canal. Similarly, the Russian oil fields are located deep within the country’s vast landmass, far from major ports and with limited access to global markets. With this in mind, it shouldn’t be surprising that Texas has managed to stand out on a global scale, producing more oil than countries like Iraq and China. If it were a country, Texas would rank as the fourth-largest oil producer in the world, only behind the U.S. and the just mentioned Russia and Saudi Arabia. Given Texas’s advantages over its competitors, it’s only a matter of time before it rises through these ranks, as well. But Texas isn’t investing solely in non-renewable energy. Staying true to the “a little bit of everything” approach, Texas also boasts impressive wind and solar energy production capacities. For wind energy, it ranks No. 1 in the U.S., which shouldn’t be surprising given that it houses some of the windiest areas in the entire world, mainly in the High Plains and Central Texas. Barely being able to find countries that can compare to Texas on a global scale should speak volumes about the state’s power. With other industries besides the energy sector, such as agriculture, manufacturing, aerospace, biotechnology, and information technology, continuing to flourish in Texas, it becomes increasingly clear that Texas has it all to become the U.S.’s No. 1 state. It has the strong industry. It has the people. It has the businesses. And it’s only bound to get bigger and better. And as it continues to grow and diversify its economy, Texas becomes increasingly well-positioned to lead the great American nation for years to come. Now let us ask you – do you agree Texas is bound to take the top spot among the U.S. nations? And if so, when do you think it will happen? Share your thoughts and theories in the comments section below. And, if you're interested in finding out A little bit more about increase in population of Texas, feel free to check out our video on the "States That This New Texans are Coming From", and what's causing them to move. Thanks for watching, and take care out there!
SummaryTexas is rapidly becoming the most powerful state in America due to significant population growth, a booming economy, and a robust tech and energy sector.
Highlights
Texas has the largest population growth rate in the U.S., narrowing the gap with California’s population.
The state’s economy is the second-largest in the U.S., contributing significantly to the national GDP.
Texas has become a major player in various industries, including technology, finance, and energy.
The Texas Triangle megaregion houses over 22 million residents, bolstering its economic influence.
A significant number of Fortune 500 companies are relocating to Texas, indicating a shift in corporate power.
Keywords
Texas
Population Growth
Economy
Technology
Fortune 500
