Seems like just yesterday I was writing about the jobs outlook in Texas (and in Austin in particular).? And just a couple days later there was an editorial in the WSJ about the jobs picture in Texas vs. California:
The September state unemployment numbers came out last Friday, and we couldn't help noticing that three of the four states with the highest job losses were California (-63,500), New York (-37,600) and New Jersey (-20,200). The other was Massachusetts (-20,900). Texas, meanwhile, gained 4,000 jobs.
This continues a longer term trend.Over the last year, as the economy was beginning to grow again, the Lone Star State has led the nation with the addition of nearly 153,000 jobs, while California surrendered 43,700, New Jersey lost 42,300 and New York dropped 14,600. This superior jobs recovery builds on the fact that Texas also weathered the national recession better than most states. According to a new Texas Public Policy Foundation study, Texas experienced a decline of 2.3% from its peak employment, while California fell nearly four times further, with 8.7% of jobs vanishing.
I'm all for boosting Texas.? But I do think that the analysis in this article misses a key point:? Texas never really had a housing boom.? All of the other states mentioned, did.? Nevada, for example, is certainly a business-friendly state, but they've had a horrible time with job losses because the housing / real-estate market collapsed.? Texas didn't really have a real estate bubble to pop.? When the real-estate bubble was bursting, median home prices in Austin were approximately $210,000, and have since dropped a bit to $180,000+.? The market has remained robust.? Even still, construction workers have struggled and hourly rates have dropped in Texas.
Second, Texas has a robust energy industry? segment that is acting as a foundation for the rest of our economy.? At times, the energy business is out-of-step with the rest of the economy- doing well when the economy in general is suffering, or the other way around.? That energy business has acted like a low-tide limit on the Texas economy, and continues to help Texas add jobs and retain existing jobs across a range of support industries.
The article blames tax rates for the difference - but ignores the fact that Texas has an almost punitive property tax.? I'm sure if we did an income analysis of property taxes we would find that the wealthy in Texas pay the lion's share of property taxes.? I don't think the broader economic differences between the states are primarily about tax structure so much as about fundamentals at a more basic level - the balance of supply and demand of labor and real-estate.
There's a case to be made for "slow and steady wins the race" - gradual changes in the economy can be adapted to by nearly everyone involved. Drastic changes (up or down) are really disruptive to the real people involved.