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San Diego Free Press

Grassroots News & Progressive Views

If California is Such a Hostile Business Climate, Why is it Kicking Everyone Else’s Ass (like Texas)

December 30, 2015 by Source

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By Kos / Daily Kos

You hear conservatives tell it, the key to a job-creating positive business environment is … drum roll … low taxes! So the conservative Tax Foundation will rank the best and worst business climate states:

TF_2016_STBTCImap

California and New York are ranked way low (48 and 49, respectively), with New Jersey coming in last at 50. And on the “positive” side, you have Wyoming leading the pack, with Texas at #10.

CNBC has its own rankings, with Texas at #2, and California down at #27 and New York at #36. (These rankings, for example, favor right-to-work anti-union states.)

And how about crazy-ass ALEC?

alec

Yup, poor ol’ California and New York and pretty much every Blue State totally sucking.

And Chief Executive Magazine really gets its hate on for California:

California is the Worst State for Business for the Tenth Year in a Row

But all those rankings really mean squat when compared to actual economic growth. So which does being low-tax and “business friendly” actually equate to great economic growth? Um, no.

So to hear conservatives talk, California is beset by job-destroying regulations, and intolerably high taxes. And yet when looking at historical job growth, we see this:

D-Employment-by-State

And you this:

But for the last three years, California has added jobs at a rate faster than all but five other states — and since last year it has significantly outpaced Texas.

U.S. Census migration data show that, despite higher personal and corporate income taxes in California, more people making $200,000 or more are moving to California than are leaving.

In fact, low-tax, no-regulation conservative Nirvana Texas has consistently lagged behind California in (non-farm) job growth in 2015 (Texas and California data), through November (since December isn’t over, obviously):

2015 JOB GROWTH, BUREAU OF LABOR STATISTICS
CALI TEXAS
JAN 59,100 13,100
FEB 22,400 16,000
MAR 40,500 25,200
APR 17,200 2,100
MAY 46,200  30,900
JUN 22,300  10,500
JUL  80,500  25,800
AUG 41,900 -3,400
SEP 21,100 29,200
OCT 40,600 17,800
NOV* 5,500 16,300
TOTAL 397,300 183,500

(* preliminary, non-adjusted estimate)

California job growth has more than doubled Texas, even though the state isn’t twice the size of Texas (more like 31 percent more populous).

Now Texas was more resilient during the last economic recession, with its high energy prices keeping its energy sector fat and happy. But with the collapse of oil prices, Texas isn’t soaring during these times of economic growth. And with increased global emphasis on renewable resources, Texas will have to further diversify its economy, like California’s, if it’s to thrive and prosper in future years. (Of course, given that the GOP is funded by oil money, predominantly from Texas, good luck with trying to shift away from that. …)

It’s also true that California suffered more during the recession, and is still playing catchup on the unemployment rate side:

unemployment12-15

But the point here isn’t that Texas sucks and California (or New York) is better. The point is that as much as conservatives claim California is a dysfunctional communist dystopia, the reality is that it continues to be the global driving force in entertainment and technology, is one of the world’s premier agricultural producers, and there is no slowing this juggernaut. Heck, if Detroit doesn’t evolve quickly, California will be the future of the auto industry as well (Apple, Google, Tesla, Future Faraday, and Uber)!

And it accomplishes all that despite its high cost of living, taxes, and regulations. Apparently, there is more to a positive “business climate” than low taxes. Otherwise, that unemployment map above would look a heck of a lot different.

In other words, California proves every day that conservative economic theories are shit. Every. Single. Day.

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