Don's Tuesday column

THE WAY I SEE IT   by Don Polson  Red Bluff Daily News   8/04/2015

   Texas model; cutting jobless checks

Some things are a little obscure, a little complex with a lot of moving parts, when it comes to the economic and employment picture. For instance, we hear that there were x number of jobs created in a period of time; for those paying attention to the details, usually buried in an article, there’s typically a revision to previously reported figures. I recall seeing, along with a recent report, that previous months’ job gains were reduced by 60,000. Moreover, the revisions always reduce the reported gains rather than increase them. Why would that be?

Another shortcoming to the superficial reports of the macro-number of job gains is that it takes special ability to analyze Bureau of Labor Standards (BLS) data and ferret out important details. Details can shed light on whether job gains were equally distributed or were perhaps selectively created in some states or areas instead of others. For instance, Texas, one of the left’s favorite objects-of-hate for more reasons than space allows, created so many jobs that Jason Russell titled a December 2014 article, “Texas job growth outpaces rest of U.S. combined; the economic miracle in Texas continues.”

“Since the recession began in December 2007, 1.2 million net jobs have been created in Texas. Only 700,000 net jobs have been created in the other 49 states combined…Total non-farm employment has grown by 11.5 percent in Texas since December 2007. Employment in the rest of the United States has grown only 0.6 percent. Until September 2014, total employment growth in the rest of the United States since December 2007 was still negative.”

North Dakota, with its fracking boom (natural gas extraction opposed by Dems), actually exceeded Texas in jobs percentage increase although its size limited the number. How did our fair state of California stack up? With an underwhelming 1.5 percent job growth, California trails Texas by ten percent, as of last December.

What is Texas doing right? First, they have no personal or corporate income tax, which are disincentives to work and business activity—keeping more of your own earnings has a remarkable correlation to wanting to earn more. Even with its “gross receipts” tax, the Tax Foundation’s 2015 State Business Tax Climate Index says “Texas has the tenth best business tax climate in the U.S.”

They do have an maximum 8.15 percent sales tax, the 11^th highest in the nation, but the Tax Foundation ranks the Texas average combined state and local rate of 8.05 percent at #12 while California’s 8.44 percent is ranked at the 8^th highest in the nation. So, with California’s higher income, corporate and sales taxes, is it surprising that companies flee California for Texas or other lower tax states? That doesn’t even touch on the regulatory burden in California. Businesses, not government, create jobs; taxes kill, rather than create, jobs.

In addition to lower minimum wage laws and workers compensation regulations, Texas, as a right-to-work state, is “the freest labor market in the country,” according to the Mercatus Center. “All these factors explain why Texas was ranked number one in economic performance in 2014 by the American Legislative Exchange Council.”

Bear in mind, also, that liberal anathema is reserved for any state that does not conform to their doctrinaire high-tax-and-regulation, big government, strong public employee unions, public school monopoly and anti-resource extraction policies. They cherry-pick things that reinforce their jaded concept that unless a state follows the “blue state model,” they can’t possibly have real economic accomplishments or low unemployment. Au contraire!

This irrational aversion by liberal, nanny-state partisans also extends to a rabid resistance to accepting that government programs designed to help workers can undermine employment by enabling unemployment as a viable lifestyle. They’re incapable of acknowledging how reducing such programs can create a positive employment transition.

It turns out that 2014 provided a real-world experiment in the impact and results of ending an unemployment benefit. In “Study: 2014’s Employment Boom Almost Entirely Due to the Expiration of Unemployment Benefits Obama Wanted to Renew” (January 25), Patrick Brennan provides insightful analysis. Isn’t it an article of faith that nothing can be better for workers and our economy than paying people not to work? I recall Nancy Pelosi saying so.

In what has been an undeniably weak jobs recovery (ref: previous columns), 2014 stood out for being a year of improvement. Emperor Obama misses no chance to talk and talk and credit his policies, with no real justification—just positing and asserting his spin.

“But what if 2014’s jobs boom is mostly thanks to the expiration of a program that the Obama administration and Democrats fervently pushed to renew? That’s the finding of a new NBER (National Bureau of Economic Research) working paper from three economists—Marcus Hagedorn, Kurt Mitman, and Iourii Manovskii—who contend that the ending of federally extended unemployment benefits across the country at the end of 2013 explains much of the labor-market boom in 2014.”

Look it up by title for the explanations, the caveats and charts. Know this however: Democrats have, in knee-jerk fashion, for the duration of the recession and recovery, wailed at and decried any effort to cut back on extended unemployment. That expiration, beginning in 2014, also brought most state programs back to the traditional 26-week initial period. It’s pretty plain to see that more unemployed found jobs and more employers did some hiring. Case closed.