Bruce Maiman

Bruce Maiman: Texas vs. California – here's a reality check

Published: Tuesday, Feb. 12, 2013 - 12:00 am | Page 9A
Last Modified: Tuesday, Apr. 2, 2013 - 11:40 am

Stop all this gasbagging over California vs. Texas. It's nothing but politicking, mythmaking and mudslinging. Here's a reality check.

Start with the $24,000 that Texas Gov. Rick Perry spent at six California radio stations. They're stations either few listen to or few can hear because of their marginal signals. Of them, including two in our region, the station with the highest listenership is Los Angeles' KRLA, which registered 0.4 in the latest Arbitron survey. To media buyers, that's like a fart in a windstorm.

Is all the media attention giving Perry his money's worth? Not really.

Perry isn't job rustling; he's fundraising for next year's Texas gubernatorial race. This was a campaign stunt, not an ad buy. If he loses re-election, the attention will be meaningless.

In the latest state poll, even Texas Republicans would rather someone other than Perry run, by 47 to 41 percent.

Will this get Texas any new jobs? Nope. Federal figures show that during Perry's governorship Texas has seen 0.03 percent annual jobs gained from relocation, and not necessarily all because Perry came a-courtin'.

Conversely, from 1992 to 2006, the Public Policy Institute of California found that relocation cost California just 9,000 of the state's 18 million jobs, a proportion significantly lower than the national average. During the recession, when California's job departures were highest, the state lost just 0.05 percent to relocation.

Studies by UCLA and the University of California, Irvine, yielded similar results.

In short: Job poaching doesn't work, relocation isn't the apocalypse alarmists claim it to be, and as the Sacramento Business Journal reported last week, California is not bleeding jobs. "That's just fiction," the article's co-author, Mark Anderson, told me. "People are pulling numbers out of the air."

Despite California's high taxes, "jobs in the tech sector grew by 6 percent last year," said Anderson.He acknowledged that California has lost manufacturing jobs but said many states have – usually to other countries, not other states. In California, they're getting replaced.

In 2011, 254 businesses either relocated or expanded to other states, but 167,000 new businesses were started. Since October 2011, California has added more jobs than the next 10 states – including Texas – combined, according to the Labor Department. In the past 18 months, California's job growth has outpaced Texas by 40 percent.

From July 2011 to July 2012, California added 365,100 jobs, the state's largest 12-month gain since 2000, beating every other state, including Texas, which added 222,500 jobs in that same period.

In the Silicon Valley, Samsung, Wal-Mart, Ford and Texas-based Dell have opened R&D facilities, and FICO relocated its corporate headquarters there from Minneapolis.

Despite losing the online tax battle, Amazon is building three new distribution centers across the state. Sutter built a new health care facility in Roseville, employing more than 1,000 people.

Meanwhile, California's most hammered industry is rebounding. Construction jobs rose 4.4 percent in 2012. Construction spending jumped 10 percent in the fourth quarter. Caterpillar opened a $50 million distribution center in Kern County.

Since Perry became governor in 2000, nearly half of Texas' 1.1 million new jobs have been in home health care services, administrative/clerical and restaurants. However, growth in these sectors is misleading, notes William Rodgers, a former chief economist at the Labor Department and current Rutgers University professor. "A large number of those jobs are part time, with lower wages," Rodgers told Yahoo News. Texas, along with Mississippi, has the largest percentage of people earning at or below minimum wage.

Lower wages can often entice a corporate move. At Haas Automation in Oxnard, which Perry is visiting this week, the average hourly wage is $25; similar jobs in Texas pay as little as $12. In a way, it's like outsourcing. But don't expect CEO Gabe Haas to move himself or his corporate headquarters to Texas. None of the heads of California's tech giants have. It would be a serious business liability based on venture capital alone. Of the $28 billion in 2011 venture capital investments, Texas received $1.5 billion. California? $14.5 billion.

And it would cost. "Texas does have high property tax rates," Dale Craymer, president of the business-based Texas Taxpayers and Research Association, told me. "Third highest nationally; California is 41st highest."

I've lived in Texas. It has advantages and disadvantages, just like California. Unlike California, however, Texas' economic growth slowed last year and the Federal Reserve Bank of Dallas warns of possible slower growth in 2013.

Look: Just because you hate California's politics doesn't mean everyone's leaving California, so quit wasting oxygen and bandwidth perpetuating this falsehood.

You don't like it here? Get out. You'll be doing everyone a favor, including yourself. If you can't leave – and some folks can't – then engage in the political process and fight for changes you think will make California better. No one takes pity on those unwilling to do either.

© Copyright The Sacramento Bee. All rights reserved.

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