Texas Economic Miracle and the California Basket-Case

Comparison:  The Texas Economic Miracle and the California Basket-Case

Economics Without The B.S.**:

[**  Double entendre intended.]

Now I know California has its problems -- poverty, poor water quality, bad business attitude, over regulation, etc., etc.  But if Fess Parker could make it in Santa Barbara County as an economic developer before he died, there is still hope for us all.

I like to read Richard Fisher of the Dallas Fed, especially when he makes comparisons between Texas and California; and, I agree with much of what he says about economic growth as an engine for prosperity.  I live in California.  But I also lived and worked in Texas.  So Richard, let's look at a few numbers.

COMPARISON:  CALIFORNIA AND TEXAS

Population:  California – approx 38 million;  Texas – approx 26 million

          California is 46% larger than Texas

California Workforce – approximately 47% larger than Texas

California GDP – approximately 50% larger than Texas

          Could it be that California attracts more tourists (money from outside the state than Texas?

Compare income data (which is given as a percentage to the U.S. economy) – Texas does not compare favorably to California, especially for farm income and for worker wages and salaries.

Government spending at state level – California is double that of Texas

Government spending at local level – California is more than double that of Texas (and look at your Rand McNally map, in the back, Texas has far more cities and towns than California and more geographic area to cover)

WORKFORCE POPULATION

Source:  Bureau of Labor Statistics Tables -- 2012

	California	Texas
Civilian Labor Force	18.642 million	12.707 million
Unemployment (approx)	1.8 million	0.78 million
Total Nonfarm	14.570 million	11.119 million
Mining and Logging	29.9 thousand	281.5 thousand
Construction	616.9 thousand	617.4 thousand
Manufacturing	1,243.7 thousand	867.0 thousand
Trade, Transportation, and Utilities	2,747.8 thousand	2,220.4 thousand
Information	432.9 thousand	198.5 thousand
Financial Activities	785.0 thousand	665.0 thousand
Professional & Business Services	2,281.2 thousand	1,448.3 thousand
Education & Health Services	1,903.7 thousand	1,490.7 thousand
Leisure & Hospitality	1,649.4 thousand	1,130.7 thousand
Other Services	507.0 thousand	393.0 thousand
Government	2,372.9 thousand	1,806.6 thousand

Percentage each State contributes to the National GDP – expressed as a percentage of the National GDP

Source:  Bureau of Economic Analysis Tables -- 2011

	California	Texas
Personal Income	12.79	8.08
Non-farm	12.77	8.10
Wages & Salaries	12.99	8.25
Proprietors	13.26	11.91
Farm	12.26	5.68
Non-farm	13.33	12.33

GDP COMPARISON

Source:  Bureau of Economic Analysis Tables -- 2011

	California	Texas
Total GDP	$ 1.959 trillion	$ 1.308 trillion
Agriculture	$ 32 billion	$10 billion
Mining	$ 21	$ 119
Utilities	$ 28	$24
Construction	$ 59	$ 58
Durable Goods	$ 131	$ 83
Non-durable Goods	$ 99	$ 109
Wholesale	$ 107	$ 86
Retail	$ 121	$ 77
Transportation & Whrse	$ 44	$ 43
Information Technology	$ 136	$ 45
Finance & Insurance	$ 112	$ 90
Real Estate	$ 294	$ 110
Professional, Scientific, and Technical Services	$ 185	$ 92
Management of Companies	$ 29	$ 12
Admin & Waste Mgmt	$ 58	$ 40
Educational Services	$ 20	$ 8
Healthcare & Social Srv	$ 129	$ 82
Art & Entertainment	$ 26	$ 8
Accommodation & Food	$ 55	$36
Government	$ 225	$ 146

State budgets – what they spend

Source:  unknown, data approximately 2012

	California	Texas
Pensions	$ 38 billion	$ 14 billion
Healthcare	$93	$ 45
Education	$ 113	$ 69
Welfare	$ 59	$ 12
Policing	$ 49	$ 21
Transportation	$ 27	$ 19
Interest on debt	$ 20	$ 12
Debt	$ 407	$281
State Debt	$ 147	$ 34
Local Debt	$ 260	$ 247
Total Spending	$ 479	$ 226
State	$ 205	$ 100
Local	$ 274	$ 126

One is a high service state and the other is a low service state.  Can you guess which?  And while Texas is more diversified than it has been; within sectors, California is more diversified -- for example, in agriculture California has approximately 200 cash crops.  And this comparison is made while California took a big hit from the economic collapse of 2008 while Texas supposedly fared better.  Let's return in a year or two and see how the comparison goes after the recovery.