In Part XIII of my series comparing Texas and California (previous seven editions can be found here, here, here, here, here, here, and here), I shared data showing that the burden of state spending was growing much faster in the not-so-Golden State.
Today’s column is going to compare job growth.
We’ll start with this chart, which shows a slam-dunk victory for the Lone Star State. Texas easily beats California in total job creation for 2024, as well as winning almost every category of employment in the private sector.
California created more government jobs, which is a Pyrrhic victory. And California also wins in creating what I call quasi-government jobs (a category that includes health care and social assistance).
The above chart comes from an editorial in today’s Wall Street Journal.
Here are some excerpts from that column.
…the Labor Department’s latest state jobs report…shows that California lost jobs in nearly every industry in the year before Donald Trump took office. …California gained a net 22,400 from January 2024 to January 2025. All of its net new jobs were in government (58,300), and healthcare, social assistance and private (often higher) education (148,200), which rely to a large extent on government spending.
…Private businesses shed jobs in the year…a result of small businesses closing because of high taxes and other costs. …Large companies are also relocating workers to lower-tax and -cost states. Texas added 187,700 jobs over the same period… One problem for Democrats in Sacramento is that their progressive tax regime (with an effective top marginal rate of 14.5% on wage income and 13.3% on investment income)… A growing problem for Mr. Newsom’s national ambitions and his party is that California epitomizes the leftist policies that harm workers and employers. That’s why so many are leaving for Texas.
These are sobering numbers, especially since California has lots of natural advantages, such as weather. It also started out as a richer state.
But bad policy is like a cancer, eating away at state competitiveness.
The bottom line is that California’s class-warfare tax system and other policy mistakes are causing it to lose ground when compared to states such as Texas.
That continued last year and almost surely that trend will continue so long as Texas is smart enough to avoid an income tax (almost certainly) and smart enough to join the school choice club (supposedly imminent).
P.S. This joke about Texas and California is the 6th-most viewed column of all time. Very fitting.
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