NCPA - National Center for Policy Analysis

California Suggests Suicide; Texas Asks: Can I Lend You a Knife?

November 24, 2010

California has become a cautionary tale of mismanagement of what by all rights should be the country's most prosperous big state.  Texas' trajectory, however, looks quite the opposite, says Forbes.

  • California was recently ranked by Chief Executive Magazine as having the worst business climate in the nation, while Texas' was considered the best.
  • Both Democrats and Republicans in the Lone Star State generally embrace the gospel of economic growth and limited public sector expenditure.

To be sure, Texas has its problems, but even conceding these problems, the growing chasm between the two megastates is evident in the economic and demographic numbers.

  • Over the past decade nearly 1.5 million more people left California than stayed; only New York lost more.
  • In contrast, Texas gained over 800,000 new migrants.
  • In California, foreign immigration has slowed, while that to Texas has increased markedly over the decade.

A vast difference in economic performance is driving the demographic shifts, says Forbes.

  • Since 1998, California's economy has not produced a single new net job.
  • Critically, as Texas grew its middle-income jobs by 16 percent, one of the highest rates in the nation, California, at 2.1 percent growth, ranked near the bottom.
  • In the year ending September, Texas accounted for roughly half of all the new jobs created in the country.

Even more revealing is California's diminishing preeminence in high-tech and science-based jobs.

  • Over the past decade California's supposed bulwark grew a mere 2 percent -- less than half the national rate.
  • In contrast, Texas' tech-related employment surged 14 percent.
  • Since 2002 the Lone Star state added 80,000 tech and science jobs; California, a mere 17,000.

California still possesses the basic assets to restore its luster.  But given its current political trajectory, you can count on Texas, and others, to keep picking up both the state's jobs and skilled workers.

Source: Joel Kotkin, "California Suggests Suicide; Texas Asks: Can I Lend You a Knife?" Forbes, November 15, 2010.

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