In a May 10, 2013 piece entitled, “What Rick Perry can learn from California” Democratic political consultant Jason Stanford claims that Gov. Perry engaged in “…provincial chest beating” regarding Texas’ superiority to other states in the job creation category during President Obama’s visit.
He went on to quote and comment on the Governor’s remarks:
“‘He didn’t go to Detroit. He didn’t go to Chicago. He didn’t go to some of the cities in California that have been declared bankrupt. He came to Austin, Texas, and he came here because we are a success story. Whether you’re playing for the red team or you’re playing for the blue team, you like to hang out with a winner,’ he said. ‘And Texas is a winner.’ California, Perry seemed to imply, is a big loser.”
Mr. Stanford then makes an assertion that’s key to his piece that, “…California saw a bigger increase in nonfarm job growth last year, 2.6% to 2.1%, according to the U.S. Dept. of Labor (author’s emphasis).”
The link Mr. Stanford supplies goes not to the original source of data, but to a California-boosting website, caeconomy.org, which itself cited a piece in the Atlantic:
California added 365,100 nonfarm jobs in the year ending in July 2012, a 2.6 percent increase and the state’s largest 12-month gain since 2000. Texas picked up 222,500, or 2.1 percent, according to U.S. Labor Department statistics.
So, two issues arise, first, that the period of time in question was not “last year” as asserted by Mr. Stanford, but rather, from July 2011 to July 2012. Even so, was the data correct? No. The Atlantic piece itself drew upon a Bloomberg article, which itself cited the U.S. Bureau of Labor Statistics data.
Data directly from the Bureau of Labor Statistics information tells a different tale. It shows that, from July 2011 to July 2012, Texas grew nonfarm jobs 2.6 percent in seasonally adjusted terms while California saw jobs grow 2.3 percent (the percentages are the same for non-seasonally adjusted job numbers).
Interestingly enough, the Atlantic piece did helpfully note that California was seeing an uptick in job growth on the strength of government jobs, some 40,000 more over the course of 12 months while Texas cut 36,000 government workers.
Not mentioned by the author was this factor: California increased taxes in 2009 with the largest tax increase in U.S. history at the state level (I voted against this tax hike as a California lawmaker). But this hike in income taxes, sales taxes, and vehicle taxes was temporary and the various tax hikes started to expire in 2011. Not coincidentally, California’s job picture began to improve from below the national average during the time of the higher taxes to above the national average during the run of lower taxes through the end of 2012.
So, what were the actual 2012 job growth numbers? In the 12 months ending December 2012, Texas added 337,500 seasonally-adjusted jobs for a 3.1 percent growth rate. California added 327,400 jobs for a 2.3 percent growth rate.
More importantly, from a per capita standpoint, Texas has been smoking California. California has 12 percent of the nation’s population, Texas 8 percent. That means, just to pull its weight in contributing to U.S. job growth, California has to generate at least 12 percent of America’s jobs. Since President Obama was sworn into office in January 2009, Texas, on a per capita basis, created more than 10 times as many jobs as California.
So, perhaps Gov. Perry, and Texans as a whole, may be forgiven for indulging in a bit of “provincial chest beating” vis-à-vis California.
After asserting things that are not so to buttress his case, Mr. Stanford makes his final point: that Texas should spend tax money on “…creating new research universities to create a sustainable, broad-based prosperity…” In other words, Texas should be more like California.
But, does California now enjoy “broad-based prosperity”?
Not according to a new, more comprehensive U.S. Census Bureau study on poverty in America that, for the first time, takes into account huge factors such as regional cost of living variances as well as the value of welfare and other public assistance programs. This ground-breaking Census Bureau study showed that 23.5 percent of Californians lived in poverty from 2009 to 2011, some 42 percent more proportionately than in Texas and the highest poverty rate in the U.S., even higher than #2 Washington, D.C.
So, if Texas saw more raw job growth than California in 2012, not the other way around as erroneously claimed by Mr. Stanford; if Texas saw a higher percentage of job growth than California in 2012, not the other way around as erroneously claimed by Mr. Stanford; and, if California had the highest poverty rate in the nation, what does that say about Mr. Stanford’s formula for “broad-based prosperity”?
Now, state-run research universities may present a compelling case for taxpayer support, but fostering “broad-based prosperity” isn’t it-at least not in the sole example Mr. Stanford uses, California.
The bottom line is this: in 2010, California state and local government taxed 42 percent more as a share of income than is the case in Texas and, if California simply abolished its income tax, featuring the highest tax bracket in the nation, 13.3 percent, California would still take a higher percentage of its residents’ income than is the case in Texas.
The truth of that matter is that there is precious little Texas can learn from California regarding governance-other than California serving as a cautionary tale of what not to do.
Chuck DeVore is Vice President of Policy at the Texas Public Policy Foundation, a former California lawmaker and the author of “The Texas Model: Prosperity in the Lone Star State and Lessons for America.”