Want the news summarized?
Subscribe to The Morning Report.

We’ve heard a lot lately about how bad the business climate is in San Diego – stories about companies moving to Dallas in the middle of the night, and videos of bespectacled Texas Gov. Rick Perry’s trips to California to lure away business.

But San Diego and California are more than holding their own in the economic and jobs derby – provided you look at the bottom line, and not get too distracted by anecdotes about particular firms packing up and shipping out.

The bottom line is jobs, or to be more precise, “net job growth”: how many more (or fewer) jobs a city has over time.

Here is a chart that compares job growth since 2009. The “cities” in the chart are really the “counties” in which they’re located. That data was used to ensure comparable information across the regions.

The four bars for each area show job growth compared with the 2009 base year. The bright red bar in each group represents growth from 2009 to 2013. That’s the most important one.

Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages

San Diego and L.A. are in a cluster with Dallas and Phoenix with respectable, if not spectacular, 5.5 percent growth, a little better than the national rate. California’s nearly 7 percent is better than its own two large southern counties, and quite a bit better than the U.S.’s rate. That should be somewhat reassuring for California economy alarmists.

Texas and Houston stand apart, with about 10 percent job growth since 2009.  That’s about twice the rate of growth for the U.S.

On the other end of the spectrum is Arizona, with its low population density and business-friendly tax policies. When you consider that large parts of the state had a much bigger than average housing bubble, and thus crashed harder, its slower recovery may not be surprising. It surely isn’t due to being unfriendly to business.

The Texas economy is indeed going gangbusters. Most of that has to do with an unprecedented oil and gas boom, low housing prices and lots of buildable land not hemmed in by natural barriers or regulations to stem unsustainable growth in already dense areas. Texas cities, like Dallas and Houston, have half the population density of L.A.

Low business taxes (and barriers to the formation of unions) likely play some role in the Texas boom, but thousands of “ordinary” Texans are getting rich from selling or leasing land to oil companies for fracking.

There could already be more of these “fracking millionaires” in a just a few years than “Microsoft millionaires” accumulated in Seattle over the course of 30 years. Newly rich Texans spend a lot of money, invest in new ventures and attract more businesses – all in-state.

From a longer vantage point, which smoothes out the economic booms and busts, San Diego’s 40 percent job growth in the last 20 years is more in line with Texas’s 50 percent than the U.S. as a whole, which was just 20 percent.

San Diego surely isn’t perfect. Indeed its sometimes toxic politics and share of government corruption make an even hardened veteran of big-city northeast politics blanch. But San Diego has enormous strengths. It doesn’t need to join the race to the bottom by overreacting to business movements that are mostly part of the natural churn of capitalism.

Irv Lefberg was a senior economist dealing with labor economics and public finance for 30 years in Washington state. He lives in Escondido. Lefberg’s commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.

Catherine Green

Catherine Green was formerly the deputy editor at Voice of San Diego. She handled daily operations while helping to plan new long-term projects.

Leave a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.