The largest employer is the Texas Department of Criminal Justice, which employs more than 3,900. Another 1,600 work at two Wal-Mart distribution centers. Other significant employers include a thriving medical and healthcare sector that tends to the large population of retirees. Finally a distinguishing mark of Palestine is that it is home to the NASA Columbia Scientific Balloon Facility, which has flown 1700 high-altitude balloons for universities and research agencies.
Palestine entered the news in February 2003, as one of the East Texas towns that received much of the Space Shuttle Columbia disaster debris.
Palestine is also the hometown of former Oklahoma Sooner and now Minnesota Vikings running back Adrian Peterson.
As of the census of 2000, there were 17,598 people, 6,641 households, and 4,582 families residing in the city. The population density was 994.3 people per square mile (383.9/km²). There were 7,668 housing units at an average density of 433.2/sq mi (167.3/km²). The racial makeup of the city was 64.60% White, 24.77% African American, 0.49% Native American, 0.79% Asian, 0.07% Pacific Islander, 7.90% from other races, and 1.37% from two or more races. Hispanic or Latino of any race were 14.88% of the population.
There were 6,641 households out of which 34.9% had children under the age of 18 living with them, 47.2% were married couples living together, 18.0% had a female householder with no husband present, and 31.0% were non-families. 28.0% of all households were made up of individuals and 13.7% had someone living alone who was 65 years of age or older. The average household size was 2.57 and the average family size was 3.13.
In the city the population was spread out with 29.1% under the age of 18, 9.2% from 18 to 24, 25.6% from 25 to 44, 20.0% from 45 to 64, and 16.2% who were 65 years of age or older. The median age was 34 years. For every 100 females there were 84.8 males. For every 100 females age 18 and over, there were 78.2 males.
The median income for a household in the city was $30,497, and the median income for a family was $36,806. Males had a median income of $28,331 versus $20,662 for females. The per capita income for the city was $15,514. About 16.6% of families and 20.7% of the population were below the poverty line, including 27.7% of those under age 18 and 14.6% of those age 65 or over.