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Don’t Mess With (or Learn From) Texas


The California Legislature’s zeal for job creation is, shall we say, less than stellar.  The consequences are obvious.  They are also highlighted in this Sacramento Bee piece from Sunday.

Texas’ unemployment rate was 8 percent, two-thirds of California’s jobless rate, and its seasonally adjusted year-to-year job growth was a robust 2 percent (2.7 percent in private employment).

“We’ve added 92,300 jobs in Texas so far in 2011,” said TWC Commissioner Ronny Congleton. “That is a trend that we hope to continue until all Texans have good jobs earning good wages.”

Texas had fewer than a million unemployed workers in May while California had more than 2 million. Texas’ jobless rate was under the national average, while California’s was the second highest in the nation. Texas has accounted for nearly half of the nation’s job creation since 2009.

“Growth in the Texas economy is gaining steam,” says a recent analysis by the Federal Reserve Bank of Dallas. Clearly, Texas and other states are emerging from recession while California’s recovery, if it exists, is decidedly weak, as several new economic reports note.

It means that millions of jobless workers and their families struggle to keep roofs over their heads and food on their tables.

It means that the state is paying out $600 million a month in unemployment insurance and its jobless benefit fund is already $11 billion in the red.

It means that state and local officials struggle with budget deficits and are slashing education, social and health services, police and fire protection.

California politicians are very defensive – even dismissive – about comparisons with Texas, but the economic differentials between the two states are too stark to ignore.

However they deal with the deficit-ridden state budget in the short term, Gov. Jerry Brown and legislators should move economic competitiveness to the top of their agenda.

Enterprise Zone supporters have long made the claim that the EZ program lowers the amount of unemployment claims the state has to pay by far more than the Program pays out.  California legislators can pay heed, or they can continue to ignore those states that do….and the consequences will be again be obvious. 

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