Thursday, July 28, 2011

This Day in California's Jobs Exodus: July 28, 2011

If the LA Times' Peter Schrag is really hoping that immigrants from Mexico and points south will buy up all of California's empty homes, this report from the Sacramento Bee must have felt like a punch in the gut. Apparently, since 2008, the relative strength of Mexico's economy has drawn many of California's undocumented immigrants back across the border. With an unemployment rate under 5%, a far lower cost of living, rising living standards, and annual GDP growth in the neighborhood of 4-5%, many Mexican citizens are ironically finding that their dream of a middle-class existence is more easily had in Mexico. Much as many native-born Californians are finding in places like Texas, Colorado, and Nevada.

Speaking of Texas, the latest example of smug, air-headed Texas-bashing out of California comes to us today from Greg Lucas at Capitol Weekly. We can't really recommend reading the piece, but we'll offer you this summary: Texas might have a lower unemployment rate, cheaper housing, and more robust job growth than California, but that's only because it pollutes like crazy, creates lots of minimum wage jobs, and leaves its citizens poor and uninsured. Lucas quotes California Treasurer Bill Lockyer as follows, "It’s a bit like Dukakis' 'Massachusetts Miracle,' which turned out to be a partial truth. There’s some Perry puffery going on right now." Basically, the argument is that if you take away Texas' oil industry and California's housing market, things would be essentially equal between the two states, except that California has more venture capital, major ports, and the largest population in the country.

For a clue to what Lucas might be missing, you might want to glance at this report in the San Jose Mercury News, about the continued havoc the Amazon tax continues to wreak on California's high tech economy. The article tells the story of ex-Livermore entrepreneur Nick Loper, who's now moving to Nevada to keep his business going. Lucas's article is a classic example of citing statistics that are entirely beside the point. California has Silicon Valley and the ability to attract elite tech-industry talent, but because of its taxation and regulatory climate, it lacks any incentive for businesses to plan for long-term growth here. As far as its production of minimum-wage jobs, is it really better to be unemployed than to have crappy work? Texas may not be the capitalist utopia that some suppose, but the fact remains that most Americans are reasonably happy if they can get a good job and not lose sleep over money. And California most emphatically doesn't offer those things. If you want a chance at riding the next hopeless economic bubble to millions in worthless paper, California's a good bet; if you want something better for yourself and your family, look elsewhere.

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