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Opinion: A response to Lockyer on California-vs-Texas

I believe generally, Treasurer Bill Lockyer is a straight-shooter.  Last week he wrote that “our state is winning” economically and implied that Texas is a third-world state.  But if you look at all the facts, Lockyer’s premise that California is doing well on job creation is as credible as Charlie Sheen’s “winning” rant.  It seems to me that Mr. Lockyer’s aim is off, way off.

First, we should set the record straight on the California-versus-Texas jobs debate.  When I and a bipartisan delegation of lawmakers visited Austin a few weeks ago to learn why Texas was creating jobs while the Golden State was struggling, I cited some statistics to explain our mission.

I said that from January 2008 to December 2010, Texas added more than 165,000 jobs while during the same time period, California lost 1.2 million jobs.  For me and my colleagues, we saw those numbers as an indication that Texas was doing something right and California was doing something wrong.

Not surprisingly, Lockyer and others doubted those numbers.  However, those numbers came from President Obama’s Bureau of Labor Statistics.  To calculate the figures for both California and Texas, subtract the total employment of each state in January 2008 from the total employment in December 2010.  The numbers are available for anyone to review on the bureau’s website. 

In fact, if you measured job growth over five years, the difference is even more staggering.  The Texas Economic Development and Tourism office cited data from the Bureau of Labor Statistics and found that Texas gained 546,900 jobs from February 2006 to February 2011 while California lost 939,700 jobs during the same time frame.  Texas is the only Top 20 state that has more jobs today than it did five years ago.

Lockyer also points to California’s success in attracting venture capital investment to bolster his claims.  However, we only received 1 percent of the country’s new manufacturing investment from 2005-2009 and our per capita manufacturing growth is currently last in the country.  In other words, we are successful in nurturing new ideas, but the products that come from those ideas are produced mostly outside California.

Here is another inconvenient truth – Texas’ unemployment rate of 8.1 percent is still significantly better than California’s 12 percent, the second worst in the nation.  That’s winning?

Of course, numbers alone do not tell the whole story about Texas and California on job creation.  One of the reasons why my colleagues and I undertook our trip was because California-based companies such as Carl’s Jr. and eBay are expanding their operations in the Lone Star State rather than in the Golden State.  Those expansions mean thousands of new jobs and millions in tax revenue that can fund essential services for Texans.  Their gain is our loss.

According to the business leaders we talked to in Austin, they said they loved California but its high taxes and burdensome regulations discouraged further investment.  Carl’s Jr. CEO Andrew Puzder said it cost $250,000 more to build one California restaurant than in Texas, and that once it opened, the Golden State’s inflexible business laws made it difficult for it to succeed.  I think real world stories like this help explain why a recent survey of CEO’s ranked California the worst place to do business for the seventh year in a row.

I do agree with Lockyer that we should strive to “be a better California.”  After all, I believe that California is still the greatest state in the world’s greatest nation.  We still have tremendous assets such as an educated workforce that we can use to attract jobs.

However, I do not consider it “winning” when we have 2.5 million Californians out of work.  I do not consider it “winning” when California is ranked dead last in the country by Chief Executive magazine – holding the title of the worst state to do business in for seven years running.  I do not consider it “winning” having the second highest unemployment rate in the country.  I do not consider it “winning” by losing over 600,000 manufacturing jobs in the last ten years – many to China.  If that is considered “winning” then maybe we should declare the Carolina Panthers Super Bowl Champions. 

It is because of my love of the Golden State that I am working hard to reenergize our economy.  Simply put, we win by putting Californians back to work.  

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