Wednesday, March 10, 2010

Update: Texas vs. the Unionocracy of California

According to today's BLS report, total employment in Texas (data) increased for the eighth straight month in January. The gain of more than 35,000 jobs was the largest monthly increase in almost ten years, and brings total employment in Texas to a record high level of 11,094,500 in January (see graph above).

In contrast, California (
data) started the year with another monthly loss of 17,500 jobs in January, marking the 24th straight month of job losses going back to February 2008. From the January 2008 peak, California has shed 1,222,192 jobs over the last two years, and now has the lowest employment level (15.85 million) since December 1999, more than ten years ago.

Bottom Line: America's two most populous states have taken radically different approaches over the last decade or more in terms of economic policies, and those differences are reflected now in radically different outcomes for how those two states survived the economic stress of the Great Recession.

The low-tax, business-friendly, right-to-work state of Texas survived the recession with only seven months of mild job losses, and has now made a complete recovery with January employment at the highest level in state history and an unemployment rate 1.5% below the national rate (8.2% in Texas vs. 9.7% for the U.S.).

In contrast, the high-tax, big-government, forced unionism approach of California has been a prescription for major job losses (more than 1.2 million bringing total employment back to the late 1990s level), a 12.5% jobless rate that is almost three percent above the national rate, and a net outflow of people and businesses.

17 Comments:

At 3/10/2010 3:35 PM, Blogger juandos said...

From the San Francisco Chronicle:

San Francisco alone has over 8100 city employees earning a $100K or more...

 
At 3/10/2010 4:23 PM, Blogger Brian Shelley said...

Someone on Rick Perry's staff needs to cut and paste this graph into every campaign commercial between now and November.

 
At 3/10/2010 4:50 PM, Blogger Ron H. said...

@Juandos
That is mind boggling. How can I become a "Special Nurse"? a deputy sheriff makes $248k? I obviously chose the wrong career path when I was young.

 
At 3/10/2010 7:22 PM, Blogger bix1951 said...

We have too many people in California anyway. I hope some of them will wisely move to Texas.

 
At 3/10/2010 8:06 PM, Blogger PeakTrader said...

Bix, since the late '80s, many people moved from California to Colorado. However, they were mostly middle class, and it coincided with a remarkable economic boom in Colorado.

No More California Dreaming
George F. Will
May 3, 2009

For four consecutive years, more Americans have moved out of California than have moved in. California's business costs are more than 20 percent higher than the average state's. In the past decade, net out-migration of Americans has been 1.4 million. California is exporting talent while importing Mexico's poverty.

If, since 1990, state spending increases had been held to the inflation rate plus population growth, the state would have a $15 billion surplus instead of a $42 billion budget deficit. Since 1990, the number of state employees has increased by more than a third. In Schwarzenegger's less than six years as governor, per capita government spending, adjusted for inflation, has increased nearly 20 percent.

Liberal orthodoxy has made the state dependent on a volatile source of revenue -- high income tax rates on the wealthy. In 2006, the top 1 percent of earners paid 48 percent of the income taxes. California's income and sales taxes are among the nation's highest and its business conditions among the worst, as measured by 16 variables directly influenced by the Legislature.

 
At 3/10/2010 8:57 PM, Blogger sethstorm said...

Worship business, treat workers like cattle, sell your state's/nation's soul and sovereignty, prosper. That would make Texas a Corpratocracy.

Deviate from that path, expect an amount of damnation directly linked to the amount of deviation. I would like to hear of how one could (w/o trickle-down) explain how helping only business also helps workers (and citizens who seek work).

If there's no problem with Wall Street wages, there should be *no* problem with those California wages. If they are truly inseparable, both entities must be attacked as one entity. That would also cancel out the issue of wages, and focus on the variable - influence.

But doing so would not be a baseless attack on labor, so you *couldn't do that*.

 
At 3/11/2010 1:01 AM, Blogger Ron H. said...

Sethstorm, PLEASE stop using that cheap translation software. I can't understand any of your comment except this tiny peice.

"...explain how helping only business also helps workers (and citizens who seek work)."

I can't explain it adequately, but you might want to ask some of those 35,000 new workers who got jobs in Texas in the last year - That is unless you think they moved there hoping to be treated like cattle.

 
At 3/11/2010 3:49 AM, Blogger PeakTrader said...

Also, I may add, in Colorado, government and businesses work together, more like equal partners, unlike in California where government dictates and even attacks.

Consequently, in Colorado, not only did the private sector boom, where middle and upper middle class homebuilding boomed, impressive malls were built, and businesses thrived, including a huge expansion of the Denver Tech Center; new projects were completed, including an international airport, three professional sports stadiums, a light rail system, a convention center, an impressive main library (where the G-8 meeting was held one year), the renovation of lower Downtown Denver, etc.

 
At 3/11/2010 7:49 AM, Blogger sethstorm said...


Also, I may add, in Colorado, government and businesses work together, more like equal partners, unlike in California where government dictates and even attacks.

Sometimes they can't just sit idle and let the attacks come in. At some point, they have to act against these attacks in order to keep business from overrunning government.

That being said, it is ironic that you consider citing Colorado.

 
At 3/11/2010 8:30 AM, Blogger Paul said...

"Worship business, treat workers like cattle, sell your state's/nation's soul and sovereignty, prosper. That would make Texas a Corpratocracy."

You know, I live and work in Texas. I have yet to have my boss come at me with a branding iron.

Come on, Seth. Start your own business and show everyone how it's done.

 
At 3/11/2010 10:24 AM, Blogger sethstorm said...

Paul said...
One does not need a brand to treat someone as if they were cattle.

Simply just threaten to offshore their job.

 
At 3/11/2010 11:33 AM, Blogger Jet Beagle said...

sethstorm,

Texas companies are not treating their workers like cattle. Very few are offshoring jobs. On the other hand, many foreign companies have opened plants and divisions in Texas and other right-to-work states acros the South. Texas and other Southern U.S. companies have wisely expanded to other countries, creating new jobs not only in the foreign countries but in the U.S. headquarters as well.

Quite frankly, sir, you know damn little about Texas and the corporations which exist there today.

 
At 3/11/2010 3:17 PM, Blogger PeakTrader said...

Seth, I cite Colorado, because I have economics degrees from the University of Colorado and worked in management positions in the financial industry. Over a 15 year period, I watched Colorado make remarkable economic progress.

You have it backwards, government is overrunning businesses and people in general. Businesses are on the defense, and people need to defend themselves, because no one can beat "city hall."

 
At 3/11/2010 4:23 PM, Blogger sethstorm said...


Seth, I cite Colorado, because I have economics degrees from the University of Colorado and worked in management positions in the financial industry. Over a 15 year period, I watched Colorado make remarkable economic progress.

In light of events about 106-116 years ago in Colorado, it just seemed a bit of an odd coincidence. If you're familiar with that state's history, you'll know what I'm referring to - applied cronyism to exterminate labor unions from the mines. That is precisely what should be avoided even if one wishes to remove labor unions. The problem is that in the next few years, they'll get just that at the federal level. The only thing missing will be bloodshed.

Otherwise, it would be unremarkable to hear the government-business agreement in that state. It would be no more different than Ohio in that regard. Not the most business-friendly state, but also a state that has seen both the good and the bad in overly-close business-government partnerships.

 
At 3/12/2010 4:28 AM, Blogger PeakTrader said...

Society can benefit without collusion or competition between government and businesses.

 
At 3/12/2010 9:27 AM, Blogger Daddy Dave said...

That is the most flagrantly misleading graph I've seen in a long time! Compare the scales of CA and TX. They've zeroed in on a particularly damning set of data, if only the scaling was adjusted to cause alarm. Peel that back and take a look at a full set of data and it is likely to cause an attack of the yawns.

 
At 3/13/2010 8:30 AM, Anonymous janet said...

80% of job creation over the past 10 years has been in Texas. Sethstorm is so deluded that I won't even respond other then to say that he knows nothing about job creation. What I find the most irritating of all is those people (voters) fleeing California for states like Texas. They voted for politicians who expand government and when those states collapse economically, they flee to right to work states and reap the benefits of policies that they did not support. I see it in Michigan where I live. I know many union-loving, liberal Democratic people who have fled for jobs in Texas. They fail to make the connection between politicians and policies they supported and the economic malaise they are fleeing from.

 

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