Economy
10:59 am
Fri August 31, 2012

What Explains the Jobs Race Between Texas and California?

Texas has one of the strongest economies in the nation. But in recent months the Lone Star State seems to have been outshined by the Golden State. The U.S. Labor Department reports that California has added 365,100 new jobs to its economy while Texas added 222,500.

This horse race captured the attention of The Atlantic. In a post to its website called “Why California Is Suddenly Adding Jobs Faster Than Texas,” author Jordan Weissman posits several reasons for the change:. One is growing government jobs in California versus declining government work in Texas. Another is the theory that California’s economy is primarily based on housing – which is making a slow but somewhat steady recovery.

Mark Lavergne, spokesperson for the Texas Employment Commission, tells KUT News that while making comparisons is natural, it’s important to recognize that Texas and California have different economies.

“California has the largest civilian labor force in the country, and Texas has the second largest civilian labor force,” Lavergne says. “But our civilian labor force population is still less than California by several hundred thousand.”

Lavergne says that California’s recent growth is a positive sign, but Texas has shown consistent growth over an extended period of time.

The Atlantic also notes credit must be given to Texas’s stricter banking and mortgage lending rules. These regulations spared the state from the worst consequences when the housing bubble burst, and now Texas has less ground to make up in terms of unemployment – and are counterintuitive to the image of the low-regulation state.