California pulls ahead of Texas in jobs race

150 150 Cheryl Getuiza

Tesla Factory
Cars roll off factory line at Tesla plant in Fremont, CA. (Photo credit: Steve Jurvetson via Flickr)

It’s a statement many Californians won’t soon forget.

“Entrepreneurs and business people around the world and here at home think that at some point America is going to become like Greece or like Spain or Italy, or like California—just kidding about that one, in some ways.”

Republican presidential candidate Mitt Romney uttered those words about the California economy during a campaign stop in Iowa in early August comparing the Golden State to those of struggling European countries.

Well, the latest jobs numbers are making the comparison to Greece look a little shaky. 

According to recent findings from the U.S. Bureau of Labor Statistics, California actually led the nation in job creation the last two consecutive months in year over year totals. How about that!

That means, California, beat out Texas, with which it’s often compared and is often ranked more business friendly.

“This is very good news to see,” said Dr. Robert Kleinhenz, Chief economist, Kyser Center for Economic Research of the Los Angeles County Economic Development Corporation.

“Especially because the statewide labor market has been adding jobs, not just over Texas, but at a pace almost double the nation at 1.4 percent,” said Kleinhenz.

Here are more key findings:

  • California added 365,100 nonfarm jobs from July 2011 to July 2012, a 2.6 percent increase
  • That’s the state’s largest 12-month gain since 2000
  • Texas added 222,500 jobs, a 2.1 percent increase
  • California outpaced Texas in June as well

This is promising news, considering Texas led California in job creation in 18 of the last 24 months, since August 2010.

Dr. Kleinhenz believes California’s success has to do, in part, with the mix of industries in the state. Whereas Texas is tied to energy and oil, California has been adding jobs in “professional and business services—including lawyers, high-level IT jobs, architect engineering, thanks to another tech boom in the Bay Area,” said Dr. Kleinhenz.

“We’ve also steadily been adding jobs in leisure, hospitality and retail, as well as in private education and health care,” he added.

Despite these gains, California’s unemployment rate remains at 10.7 percent as of July. It’s the third highest in the U.S. only behind Nevada and Rhode Island.

There are thousands of job openings, but people living near those jobs don’t have the necessary skills to fill them, according to a new report from the Brookings Institution.

Finding a skilled workforce was an important topic discussed at the first California Economic Summit held in May. Action teams are working hard to close that gap by prioritizing workforce-training resources to support the growth of major regional industry sectors. This includes creating partnerships with local workforce investment boards, community colleges, businesses and labor to prepare people for high demand jobs.

“The status quo is fragmented and not meeting the needs of our regional economies or communities. We need to be smarter about preparing our workforce to enable regional industry sectors to compete and grow jobs for Californians,” said Susan Lovenburg, California Forward’s director of the Partnership for Economic Prosperity. “The SMART Workforce Action Team has identified key steps and is working toward their implementation.”

California, with a $1.9 trillion economy, is the ninth largest in the world. The state is still a force to be reckoned, especially when leaders from our state’s various regions start working together to make sure we remain competitive.


Cheryl Getuiza

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