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Sunday, April 11, 2021

In Market: In California vs. Texas, who wins?

We’re as different as day and night and yet we’re kind of the same

It’s pretty easy in North Texas to point to California and snicker. After all, we’ve landed a boatload of business from the Golden State in the past few years. Toyota, Carl’s Jr., Farmer Brothers Coffee, just to name a few. And it’s not just businesses; Internal Revenue Service data reports 33,626 former Californians now have cars wearing bumper stickers that say “I wasn’t born in Texas but I got here as soon as I could.” That’s why we have so many sushi restaurants now.

Texans, as is their wont, have not been shy about poking the bear about our economic success. Low-taxes, light-regulation have created a Texas’ economic juggernaut, they brag, a bottle of Shiner’s in their grip. “Look upon our works, ye mighty and despair,” say the Lone Star State’s supporters with an English degree.

So California is falling into the sea, right? According to most economic data, over the course of the current recovery, both states have seen impressive economic growth, says Bloomberg columnist Justin Fox.

“California has led the U.S. in job creation, adding 2.3 million nonfarm jobs since January 2010. Texas is in second place, with 1.8 million jobs. Between them they’re responsible for 28 percent of national employment growth.”

Wait. California is beating us in job growth?

That’s right. Much of that is due to the downturn in energy prices, which actually added jobs during the natural recession and buoyed the Texas economy.

Both states have a different point of view on business, summed up as Texas being California-like laid back on business regulation and California being all up in businesses’ business.

Fox points out that both states have invested heavily in education in the past and have several populous metropolitan areas that offer plenty of opportunity for innovation and growth. That investment in education has paid off, Fox says.

One area of concern for Texas should be venture capital. California, as it has for years, leads the country and everyone else is a distant second. But venture capital in Texas has taken a hit. According to Rice University’s Baker Institute for Public Policy, venture capital investment in Texas has fallen from No. 3 to No. 4 and is likely to slide to sixth, maybe before this year is out.

So what’s next for Texas and California? Well, we can continue to point fingers at each other – recall the battle between then-Texas Gov. Rick Perry and California Gov. Jerry Brown that was more like a fight between first-graders? The word “fart” was used.

Or we can rest on our low-tax and laissez- faire regulation laurels. But we might do something we did before that proved its worth: Invest in the future.

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Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

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