Tuesday, November 15, 2011

Jobs in Texas vs. California (the Lost Decade State)

Following up on a CD post yesterday about companies leaving California in record numbers, the chart above shows the difference in employment levels between California and Texas. While Texas employment was stable through the recession and is now 242,000 jobs above the December 2007 level, California lost jobs for 23 consecutive months starting in February 2008 and the September employment level is more than one million jobs below December 2007.  In every month since September 2009, the employment level in California has been below 16 million, which is back to the employment level of 2000, more than a decade ago.  In contrast, Texas employment is about 14% above the 2000 level.

Further evidence of companies and employees leaving California for better opportunities in prospering states like Texas is provided by the U-Haul rates for a one-way 26-foot truck rental:
Dallas to LA: $1,024
LA to Dallas: $1,762
Premium to leave California for Texas: 72.1%

Houston to LA: $892
LA to Houston: $1,884
Premium to leave California for Texas: 111.2%
Assuming that one-way U-Haul truck rental rates are based on relative demand, there are a lot more people and trucks leaving California for Texas than vice-versa, resulting in huge premiums to rent trucks going to Texas and large discounts for trucks going to California. 

Related: "The Long Stall: California’s jobs engine broke down well before the financial crisis," by Wendell Cox in City Journal and commentary at Coyote Blog.  (ht: morganovich)


At 11/15/2011 10:13 AM, Blogger morganovich said...


here is some more info on california's implosion.

At 11/15/2011 10:28 AM, Blogger Rufus II said...

Disposable Income per Capita:

Texas - $39,493.00

California - $43,104.00

At 11/15/2011 10:33 AM, Blogger Rufus II said...

If the future of the country is low-wage jobs, without benefits, then Texas is the fore-runner.

What is it? 26% of Texas citizens do Not have health insurance?

Those people should just keep going South. Mexico has a lower unemployment rate, and IIRC Everyone has health insurance.

At 11/15/2011 11:01 AM, Blogger Buddy R Pacifico said...

Rufus states:

"Disposable income per capita:

Texas - $39,493.00

California -$43,104.00"

No, those are per capita and not disposable income per capita.

Rufus, have you looked at the article cited by Prof. Perry titled The Long Stall in City Journal? The declining wages and job losses in California are staggering.

At 11/15/2011 11:48 AM, Blogger juandos said...

Apparently rufus is forgetting that the cost of living in California is inordinately more expensive than Texas...

24% of Californians don't have health insurance...

At 11/15/2011 12:17 PM, Blogger morganovich said...

average texas home price $169k.

california: $260k.

texas income tax: 0%

california: up to 11.7%

CA sales tax: 7.5% vs 6.25% in TX.

even just after taxes, texas workers earn more.

add in cost of living, and they are way ahead.

sorry rufus, but even nominally, your numbers don't work.

in dallas, $1 million will buy you a big home in a great part of town.

in san francisco, it's a starter 1br.

the nice parts of town are trading at $1200-1400/ft2. a nice 2br RENTS for $5000+.

food costs more. healthcare costs more. insurance and auto taxes of every kind are more.

cost of living adjusted, TX is very far ahead of CA.

At 11/15/2011 1:35 PM, Blogger morganovich said...


adjusted for cost of living, TX household income is $53k vs $44k in CA, meaning TX is 20% higher in real income.

that was in 2009. i would wager that the gap has increased since based on relative economic performance.

At 11/15/2011 2:19 PM, Blogger Ashley said...

Since 1996 Cali and Texas have added roughly the same amount to population and jobs.

California has simply return to "parity" with Texas in this regard as could have been expected given the housing blow up and how much building/construction was focused in Cali.

Was this blog praising the miracles of job growth in California during the boom years or was it notably silent?

At 11/15/2011 3:07 PM, Blogger ReadAmos said...

Texas is the place to be if you like air pollution. We are also making great strides in water pollution now that Governor Perry's buddies have approved dumping waste into abandoned oil wells near major cities. Next thing you know, they'll put nuclear waste in holes next to our cities.

At 11/15/2011 3:18 PM, Blogger Mark J. Perry said...

Ashley: If the boom years for CA were the 1990s, that was in the pre-blog days. If it was pre-2006, I wasn't blogging then.

But if you've seen my posts on the "economic miracle" state of North Dakota, you know that I have no hesitation praising economic miracles at the state level.


At 11/15/2011 3:36 PM, Blogger Buddy R Pacifico said...

Here is a list called Breaking Bad: California vs. The Other States. The author includes many business related items including: California is "the worst state in which to do business", according the America's top 500 CEOs.

At 11/15/2011 3:53 PM, Blogger bix1951 said...

as a native born in California I actually am glad people are leaving
we have too many people here!
I wish more of them would go to Texas and stay there

At 11/15/2011 6:28 PM, Blogger Rufus II said...

Buddy, Morgan, you're absolutely correct. I was, actually, looking for disposable, but somehow got sidetracked on "average." Mea Culpa.

At 11/15/2011 11:05 PM, Blogger arbitrage789 said...

I frankly don't care what the politicians do in California...

They can drive the state into a ditch, for all I care.

Just so long as they don't get a Federal bailout.

At 11/16/2011 2:47 AM, Blogger Dean Calbreath said...

As a one-time Texan and current Californian, I can testify that Texas' fortunes rise and fall with oil prices - and the past 15 years have been very good for oil, with prices repeatedly hitting all-time highs and then moving down fairly slightly. If you factored out the oil industry from Texas, it would have a profile similar to most other states.

Similarly, California's major dip is largely related to contruction and finance. If you factored those two industries out from the current downturn, it too would look very similar to most other states - and some industries would be booming in comparison to other states, especially high-tech and biotech.

This isn't a matter of tax policy, "business climate" or Reps vs. Dems (both states have had booms and busts under both parties).

In Texas, it's a matter of the great good luck to be atop the nation's second-largest oil field (soon to be exceeded by North Dakota - another booming state right now). The states at the top of the list for growth right now are all oil states: Alaska,Texas, Oklahoma,Louisiana, the Dakotas.

In California, it was a matter of having the great bad luck to have real estate developers and mortgage brokers putting too much faith in the market, resulting in an unprecedented boom in the construction industry and an unprecedented collapse when construction went belly-up.

California and Florida are two very different states in terms of politics, taxes and business regulations, but their employment trajectories have been very similar in recent years - solely because that they were both too heavily tied to real estate in the past decade.


Post a Comment

<< Home