(Thanks to brother Jack for this one)
By Mark J. Perry
March 10, 2010, 10:40 am

American Enterprise Institute resident fellow Michael Barone wrote an excellent column titled “Low-Tax Texas Beats Big-Government California,” where he highlights some of the major economic and political differences between our two most populous states, Texas and California. Some of those dramatic differences have also been featured on the Enterprise blog in recent months— see examples here, here, here, and here.

After experiencing similar employment growth between 2000 and 2007, the first chart below illustrates how significantly different the employment trends have been in Texas over the last few years compared to California. Following the onset of the recession in December 2007, Texas employment growth has been relatively flat, with small job losses in only seven of the last 25 months and job gains in the rest of the months. Based on BLS data released today, Texas started 2010 with a monthly job gain of 35,325 in January, the biggest monthly job increase in almost ten years, and it boosted the employment level in Texas to the highest level in history—11,094,500 jobs. In contrast, California shed jobs for 24 straight months between February 2008 and January 2010, at an average rate of 51,000 jobs losses per month, and it started the year with another 17,000 job losses in January. During the last two years, California has lost more than 1.2 million jobs.

The next chart shows that since the beginning of 2007, the jobless rate in Texas has been below the national average each month during the last three years, while the jobless rate in California has been above the national average each month during the same period. In January, the unemployment rate in Texas was below the national average by 1.5 percent (8.2 percent in Texas versus 9.7 percent for the U.S.) and California at 12.5 percent was above the national rate by almost 3 percent, driving the jobless rate gap between California and Texas up to 4.3 percent, just below the all-time record of 4.4 percent set in October 2009.

So while Texas experienced a relatively mild economic downturn over the last few years, followed by a complete recovery and record employment levels, California’s catastrophic job losses since early 2008 have brought its employment level in January 2010 to the lowest level since December 1999.  That’s right—California started this year with fewer jobs than it had a decade earlier at the end of 1999.

By any relevant economic measure, the low-tax, business-friendly, right-to-work state of Texas has survived the recent economic downturn surprisingly well, while the high-tax, big-government, forced unionism approach of California has been a prescription for major job losses, high unemployment, and a net outflow of people and businesses. Unfortunately, as Michael Barone points out in his commentary, “the Democrats in Washington are trying to impose policies like those that have ravaged California rather than those which have proved so successful in Texas.”