California Bests Texas on New Jobs

Higher taxes prove no bar to state's employment growth.

California, which sent a delegation to Austin last year to find out how the Lone Star State had beat it in employment growth, surged ahead of Texas to lead the nation in job creation for the last two consecutive months.

California added 365,100 nonfarm jobs in the year ending in July, a 2.6 percent increase and the state’s largest 12-month gain since 2000. Texas picked up 222,500, or 2.1 percent, according to U.S. Labor Department statistics. California also outpaced Texas the prior month.

Income Tax

Texas, the 13th largest economy if it were a country, has no income tax. Most state revenue comes from a 6.25 percent sales levy.

‘Structural Problems’

“We may have another year or two of a recovery based on low-hanging fruit, but we still haven’t dealt with our structural problems,” Newsom said. “It’s good to be on the other side of bragging rights in terms of our competitive position with Texas, but we need to be cautious about reading too much into that.”

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