Economic Fact of The Day: Texas Has Added One Million Jobs Since 2007 vs. Only 24,900 Jobs in California

from – American Enterprise Institute – by Mark J. Perry


The chart above displays the changes in payroll employment since December 2007 (the start of the Great Recession and when employment levels nationally and in most states peaked) through May of this year in the states of Texas and California. Here are some observations:

1. By May of 2011, Texas had regained all of the jobs lost during the Great Recession. In contrast, it took California three years longer, until April of this year, to regain the state jobs lost due to the effects of the recession. Since the Lone Star State regained all of the lost recession-related payroll jobs by May 2011, the state has since then added more than one million new jobs, bringing the state’s employment level to a new record high in May 2014 of 11.53 million jobs.

2. Since December 2007, Texas payrolls have grown by 9.5% and by more than one million jobs through May 2014, while California employment has increased only 0.16% and by fewer than 25,000 jobs over that same period.

MP: What’s different about Texas and California that would explain why one state (Texas) has added more than one million net new jobs since 2007, while the other (California) has created almost no new net jobs over the last six and-a-half years? Let’s start by pointing out that one of those states — Texas — is pro-energy (i.e. fossil fuel energy), it’s a right-to-work state, it has no state income tax, its electricity prices are significantly lower because it doesn’t have a renewable energy mandate, and its regulatory burden on businesses is much lighter. In other words, Texas has created a pro-business and pro-growth environment that has helped to nurture the creation of more than one million jobs since December 2007. Meanwhile, California has created an increasingly anti-business climate with some of the highest state tax and regulatory burdens in the country, which along with sky-high industrial electricity prices (83% higher than in Texas), have stifled business and job creation, with almost no net job gains in more than six years.

Bottom Line: One million jobs added in the Lone Star State vs. fewer than 25,000 jobs in the Golden State since 2007 tells an important economic story that should be a lesson for the rest of the country.  That’s a point that was made very well in today’s WSJ by Dr. Bradley Allen, a candidate for Congress in California’s 24th District – “A Texas Guide to Economic Recovery.” It was that op-ed that inspired this chart and blog post.

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8 years ago

Responsible tax and spending policies do indeed matter. For the most part, Texas is focused on maintaining and expanding economic growth, limiting the size of state government, limiting unnecessary rules and regulations and generally maintaining an environment of opportunity for its citizens to better themselves and keep what they earn, should they intelligently choose to do so. In such an environment, if you don’t want to work or otherwise contribute to being a productive, responsible member of society, life will be very, very hard for you. The “entitlement mentality” isn’t very big in Texas.

On the other hand, California has largely decided the the most important aspect they need to focus on is expanding the reach and role of the state government into nearly all aspects of their citizens’ lives. To become a state where everyone can have everything and how to realistically pay for it all is either studiously avoided or completely ignored in hopes that an economic rebound, with some sort of huge financial windfall for the state, is right around the corner.

The focus in California is on “social justice”, economic fairness” and “economic justice”. You should be able to choose to do nothing, yet enjoy the same lifestyle as those who are hard-working, productive, taxpaying members of society. This takes money. Lots of money to pay for this “entitlement mentality”. So taxes and fees have to keep rising to fund the ever-expanding utopian dreams of the Governor and the legislature in Sacramento. This obviously puts a severe strain on businesses that are located in California to simply remain open and competitive with companies located outside the state. So hiring new workers or even being able to give raises to existing workers is usually far down the list of things to do, as many companies have to struggle to simply keep their doors open in this sort of economic extortionist environment.

The contrast between the fiscal policies of Texas and California provide a good object lesson for the American people to study. If they can shake off the general apathy and disinterest that seems to affect a growing percentage of the nation’s population. When all the wonderful sounding, populist business-bashing, “lets just tax the rich some more” socialist rhetoric and speeches die down (rich either never being defined or defined as someone having one dollar more than you do) and people have to figure out what kind of country they and their kids want to live in, people will have to make some hard choices. If they choose wrong, there are no do-overs. Only the irreversible consequences of their decision. We are getting very, very close to that point of decision and no return.

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