The Texas versus California job creation comparison continues
to make noise during these tough economic times, and while Texas takes its
lumps over state issues on occasion (see Greg Lucas’ recent piece
in Capitol Weekly) there seems little doubt that purely on a jobs creation
front Texas is doing much better.
Adding to that view were numbers on very small, non-employee
businesses released by the U.S. Census Bureau as described by Dan Walters in
the Sacramento Bee Capitol
Alert yesterday:
"The number of California’s non-employee businesses hit a
high mark of 2.76 million in 2007 but by 2009 had dropped by 82,878, the Census
Bureau report, based on Internal Revenue Service data, found. Business receipts
declined from $145 billion to $121 billion during the two-year period."
Meanwhile, the report noted Texas added
8,260 small firms between 2008 and 2009.
What’s important about these figures is that non-employee
businesses are often small start-up, entrepreneurial efforts conceived by
workers who have lost their jobs with a company and decided, either because of
a bleak employment landscape or a desire to work for themselves, to strike out
on their own. It is a very "California" thing to do – the
start-your-business-in-a-garage mythology that has led to some of this state’s
best-known brands.
However, right now in California, it is not working so well.
On a Wednesday phone call, veteran California Congressman
Darrell Issa and freshman Texas Congressman Blake Farenthold engaged in a
wide-ranging talk with bloggers. One issue they touched upon was job creation.
When it got to their home states they talked about what Texas was doing right
and what California was doing wrong.
Congressman Farenthold (R, TX-27) said that 37% of the jobs
created in the United States were created in Texas. Farenthold pointed to no
corporate income tax in Texas, a balanced budget, and regulatory agencies that
work with business instead of against business.
California’s Congressman Issa (R, CA-49) had a different
view of California’s job making capacity. Issa said Texas’ governor, Rick
Perry, can come to California and pick off businesses because of Texas’s
inviting business climate compared to California’s difficult business
environment.
Speaking of General Electric’s announcement that occurred
that day of moving major production to China, Issa called the situation a
canary in a coalmine. Acknowledging that corporations have few loyalties, Issa
argued that America would lose more businesses to foreign competitors unless it
becomes more business friendly.
The same situation is playing out amongst the states as the
California/Texas comparison indicates.