California is Now Creating More Jobs Than Texas

Categories: Politics

EconomistCoverCaliforniaTexasEconomy.jpg
This is how things looked in 2009. Now? Not so much.
Over the last several years, California has basically existed as a tutorial for how not to run a state government. It's faced years of crippling budget deficits, has had several of its cities declare bankruptcy, and has been hit especially hard by the recession, all with help from one of the nation's most useless legislatures.

Texas, on the other hand, has fared relatively well -- and politicians and pundits have made much of the divide. California is a state crushed by excessive taxes and burdensome regulations, they say, while Texas, with its business friendliness and low cost of living, has been raised as the model for how a state can unleash a dormant economy.

The data seemed to support the conclusion. For the past couple of years, Texas has consistently led the nation in job growth while California has continued to lag. That's starting to change, though, and it's calling into question the assumption that the significant difference between the states is the regulatory climate or tax burden.

Bloomberg reported yesterday that California has now surpassed Texas in job creation, to lead the nation.

"The increase runs counter to the notion that growth favors states with lower taxes," Bloomberg writes. "California, the world's ninth-biggest economy, has the highest statewide sales tax in the U.S., at 7.25 percent. That would rise to 7.5 percent if voters approve a November ballot initiative. The income tax rate for those making $1 million or more a year, now 10.3 percent, would rise to 13.3 percent, the most of any state."

Partly it's a matter of California having more ground to make up. It's sitting on 10.7-percent unemployment compared to Texas' 7.2 percent. More than that, according to the experts Bloomberg talks to, is simply that the two states' economies are different: California's is more heavily dependent on housing, which crashed especially hard, while Texas' is more focussed on energy.

That's due more to historical accident than the policies of either state. And while it's hard to argue California hasn't been poorly governed over the past decade or two, that's not why its economy was hit so hard. Same thing applies over here. Rick Perry didn't create the "Texas Miracle." He just campaigned on it. And, as Jim pointed out last year, it wasn't much of a miracle in the first place.

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21 comments
jared.heath
jared.heath

Texas hasn't been "creating" jobs anyway.

 

Its been "stealing" them from other states when companies move here due to the company friendly confines of the "great" state of Texas.

TheCredibleHulk
TheCredibleHulk

Yeah, but can Cali come up with a cool state-flag shirt like TX?

 

I think not.

holmantx
holmantx topcommenter

I like California but she's like an incredibly beautiful woman.  So strikingly beautiful she just can't bear to lay down with hairy men.  She will only avail herself to other beautiful women.

 

The rest of us guy states just have to accept the notion we only get to watch.

Sotiredofitall
Sotiredofitall topcommenter

Tell me again how many cities in California have filed for bankruptcy versus Texas? 

Tell me again which state is closer to insolvency? 

 

Both states have their issues but seems California is closer to the abyss 

Mr_Hand
Mr_Hand

Texas needs a $68B, unfunded bullet train. 

scottindallas
scottindallas topcommenter

as to exports, ag has fared quite well, as had tech.  But it only affirms my argument, it's consumers that firms serve, they don't shop regulations and taxes like the execs love to perennially whine about. 

RTGolden
RTGolden

2 months is not a trend.  CA has two main areas that will stifle economic growth: regulatory constraint and tax policies.  TX has two main areas that will stifle economic growth: regulatory absence and tax policies.  It's a race alright, a race to see which will collapse (again) first.

Topham
Topham

You know what California has that Texas doesn't? Lots of excellent universities, public and private. Texas has two. One in Austin and one in Houston..

mavdog
mavdog topcommenter

there is good news about this stat: hopefully there won't be any more Rick Perry candidacy based on the mythical Perry fostered "Texas job miracle".

 

Hooray!

everlastingphelps
everlastingphelps topcommenter

How many of those jobs in California are private sector vs government jobs?

CelebrateDivershitty
CelebrateDivershitty

Somebody's got to sell all that McDonald's and Taco Bell crap to all the trash infesting California.

kirkunit
kirkunit

@TheCredibleHulk Cali's shirt would have a big bear on it with a red stripe at the bottom. That would be a kick azz bowling shirt!

albert.finney000
albert.finney000

 @Mr_Hand 

 

With a bullet-train version of the Texas Shirt as a paint job. Our liberals would be too embarrassed to buy a ticket.

 

albert.finney000
albert.finney000

 @scottindallas 

 

Oddly, I've worked for owners from Chicao, Detroit and California that came here for those very reasons. The employees who follow also like the economic situation, especially those from California, it's a ripple effect.

 

I've moved here twice, once from LA, once from Vermont. Texas, like California many years ago, really is a land of opportunity, been very very good to me, and everyone I know. That's why I stayed here for 23 years so far.

 

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

 @Topham The one in Austin is not that great despite what the mass of graduates have to say about it.  The graduates of the one in Houston have severe psychological damage.

Hannibal_Lecter
Hannibal_Lecter

 @Topham Recent studies have shown that there's an inverse relationship between state spending on higher education and economic growth. So that's another advantage for Texas.

mavdog
mavdog topcommenter

apparently the answer is 89% of the jobs added have been private sector jobs. That's roughly 325,000 private sector jobs, or about 100,000 more jobs than were added in Texas.

phootballphan
phootballphan

@everlastingphelps "

There's another reason why California may be seeing an uptick: growing government. Of the 365,000 jobs it's added in the past year, more than 40,000 have been in the public sector. That's even more than construction, which has added 27,000. Meanwhile, Texas has seen 36,000 government workers disappear.

None of this changes the fact that California still has a 10.7 percent unemployment rate, while Texas is at 7.2 percent. 

"

http://www.theatlantic.com/business/archive/2012/08/hey-everybody-californias-the-countrys-1-jobs-creator/261729/

mavdog
mavdog topcommenter

yep, no "McDonalds and Taco Bell crap" being sold in Texas!

 

what, they sell that "crap" in Texas, too? A lot of it?

 

There are more minimum wage workers in Texas than any other state?

 

gee whiz....

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