Discussion: (8 comments)
Comments are closed.
A public policy blog from AEI
View related content: Carpe Diem
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.
Comments are closed.
1789 Massachusetts Avenue, NW, Washington, DC 20036
© 2017 American Enterprise Institute