Opinion: Fact and fiction in the California-versus-Texas debate

Funny how different the same thing can look when viewed in a mirror or gazed at from afar.  Take, for example, Texas and California.  When some Californians look at Texas from half a continent away, the Lone Star radiates.  When some Texans look at their own state, they see lost luster.

“In Texas today, the American dream is distant,” observed the Texas Legislative Study Group in a February 2011 report titled, “Texas on the Brink.”  The LSG, comprised of 50 members of the Texas House of Representatives, provided 15 pages of statistics.  A few: highest percentage of uninsured children in the nation; dead last in the percentage of residents with high school diplomas; most polluted air and water.  “If we do not change course, for the first time in our history,” the report said, “the Texas generation of tomorrow will be less prosperous than the generation of today.”

Not that the current generation takes Easy Street to get from the Panhandle down to the Gulf. One in three Texas workers doesn’t bring home enough pay to keep a family of four out of poverty.  That’s twice California’s rate.

Still, some folks here in the Golden State look longingly at the Lone Star.  They say Texas is doing all the right things to create jobs, while California has screwed up everything.  Republican legislators even took a trip to Texas to discover the Great Secret.  When they came back, without saying much of anything about what they found, they introduced a 30-bill legislative package.  In front of a Carl’s Jr. full of minimum-wage workers, they said it would cure what ails us.

Before and after the trip, the Republicans jack-hammered a variation of the factoid that has lifted their entire enterprise: “From 2008 to 2010, Texas added more than 165,000 jobs, while California lost 1.2 million.”  Problem is, it’s bunk.  From 2008 to 2010, according to the Texas Workforce Commission, Texas lost 352,500 jobs.

The data also paints a distorted picture of California.  Those who employ it take a number that reflects the recession’s impact and sell it as evidence of a chronically hostile business climate.

The recession hit California earlier and harder than most states, and the housing market tanked deeper here during the recession than any other state.  Yes, it cost California a lot of jobs from 2008 to 2010 (1.1 million, not 1.2 million, including close to 500,000 construction-related jobs).  But does anyone seriously think the collapse of the national mortgage and housing market had anything to do with California’s business climate?  Consider: Before the recession, from 2000-2007, California added 1.13 million jobs.

California’s homegrown detractors ignore other data as they award Texas their seal of approval and stamp a big “REJECT” sign on their own state.

California towers above Texas and all other states in venture capital investment.  In 2010, California had 1,089 deals worth $12 billion.  Texas?  Less than 300 deals and less than $2.5 billion.  From 1999-2009, California’s real GDP grew by 27.2 percent, compared to Texas’ 25.9 percent.  From 2002-10, California created more jobs than Texas in the following manufacturing sectors – semiconductors, computers, communications equipment, and medical equipment and other durable goods.  As a percentage of what businesses produce, California takes less in taxes than Texas (4.7 percent, compared to 4.9 percent).

A more accurate depiction of California does not provide a pass to just sit back and wait for the boom times to return.

We have to do everything in our power to create jobs, rebuild our economy and remake it to position California at the forefront of the new global economy.  But as we undertake the task, we have to remember why our state continues to be a winner.

California has the nation’s most diverse economy.  Geographically and demographically, we are well-placed to be a global powerhouse.  We specialize in creating high-value jobs, high-wage jobs, the jobs of the future.  We need to build on these strengths, not play other states’ game.

We should ease regulatory burdens.  But we need to keep in mind why we love living in California, and do it in a way that protects our environment and makes our workers safe and prosperous.  We should use the tax code to encourage businesses to locate and expand in our state.  But we need to be smart about it – develop an economic development strategy first, then provide tax breaks that implement the strategy and end the ones that don’t.  And we’ve got to invest in our schools and infrastructure, or tax breaks and regulatory reform won’t mean much.

As we work together to build California’s future, “Be more like Texas” should not be our goal.  “Be a better California.”  That’s the recipe for success.

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