Myths vs. Facts: California's Claims about Texas' Economy

May 3, 2013

Texas Governor Rick Perry recently began radio advertising in California encouraging California businesses to move to Texas for its pro-business environment.  The radio ads sparked a tiff between the Lone Star State governor and Californians, who have levied a number of claims about Texas' economic success, all of which are inaccurate, says Chuck DeVore, vice president of policy at the Texas Public Policy Foundation.

  • California has claimed that Texas is dead last in the number of residents over age 25 who have high school diplomas, but California is barely ahead of Texas. Considering that non-oil manufacturing is expanding so rapidly in Texas, opportunities for those with less educational attainment are greater.
  • California has claimed that SAT scores of Texas students rank 45th nationally, which is true, but the SAT is an unsound measure of academic performance. Other indicators, like the National Assessment of Educational Progress and the Institute of Education Sciences, place Texas ahead of California in a majority of categories.
  • California has claimed that 26 percent of Texans do not have health insurance, which is true, but this statistic does not account for the 2 million out of 5.7 million uninsured that make more than $50,000 per year.
  • California has claimed that many of the jobs created in Texas are low-wage positions but this claim only accounts for 5 percent of all Texas nonfarm workers. Because the cost of living is lower than in California, a lower minimum wage stretches further.
  • California has also claimed that Texas has a larger share of its population living in poverty than California, but according to the U.S. Census' Supplemental Poverty Measure California had the nation's highest poverty rate from 2009 to 2011, a time during which Texas' poverty rate dropped.

Despite California's claims that Texas' job creation is due to the state's natural resources, none of the jobs would be created without economic policies that encourage firm expansion. In fact, manufacturing makes up a larger portion of Texas' economy than oil.

Between 2006 and 2012, California had a net loss of 359,000 jobs while Texas, even with a recession, had a net gain of more than 1,000,000 jobs, a testament to the state's low-tax, small government, pro-business environment.

Source: Chuck DeVore, "Texas vs. California: Myth-Busting Time," Texas Public Policy Foundation, April 2013.

 

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