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What the article doesn't explain is why Texas is able to sustain 700,000 jobs geared toward export manufacturing, or why Texas continues to attract engineering

What the article doesn't explain is why Texas is able to sustain 700,000 jobs geared toward export manufacturing, or why Texas continues to attract engineering talent. At least part of it is Texas' business-friendly and employee-friendly tax climate.

_delirium 17y ago
To most employees, Texas's much lower property values and more stable property market (as this article analyzes) have a lot bigger impact on the economics than the taxes, which are only marginally lower than California's when you add all the different taxes up (TX collects about $8k per resident in state&local, while CA collects about $9.5k). Employee-friendliness overall varies. I'd say the employment laws are generally worse for employee freedom than California's, mainly because TX courts are more willing to enforce noncompete clauses (though they aren't as willing to as some states).
- benhoyt 17y ago
  Speaking of employment laws, I'm curious how common "at-will employment" is in the US? (http://en.wikipedia.org/wiki/At-will_employment http://en.wikipedia.org/wiki/At-will_employment) I've recently been hired by a US company on at-will terms, and I understand it's much more common in the US than in New Zealand where I'm from -- things are much softer on employees in NZ.
  - gojomo 17y ago
    'At-will' employment is the norm in the US for non-unionized jobs. The Wikipedia article describes the exceptions fairly well.
    - _delirium 17y ago
      One additional wrinkle is that customary practices at large firms are a bit different. Because they're worried about unlawful-termination suits (even if they'd end up winning them), large companies rarely fire specific people, except for really egregious things (like embezzlement), even though in theory at-will employment means they could fire anyone for any reason. Instead they only get rid of people in general downsizing/layoff rounds, like closing a whole division, or doing a blanket 10% reduction in staff--- and even then they often offer severance packages for long-term staff, to make it a mutually agreed upon parting.
- roboneal 17y ago
  Where are you getting your state & local tax numbers? The numbers I found show total state & local tax collected per capita for Texas is $3,580 vs. $5,028 for California. That's a 40% increase over Texas. Nothing to sneeze at. Texas: http://www.taxfoundation.org/taxdata/show/482.html http://www.taxfoundation.org/taxdata/show/482.html Cali: http://www.taxfoundation.org/taxdata/show/443.html http://www.taxfoundation.org/taxdata/show/443.html Even your numbers show a 20% penalty for living in Cali.
  - _delirium 17y ago
    I was going by total state+local govt revenues divided by population, which ends up allocating as taxes things like vehicle registration fees, excise taxes, alcohol taxes, corporate taxes, etc., probably even lottery revenues. The Tax Foundation's method might be more meaningful, depending on what you're comparing. But either way it's not all that much of a difference in absolute terms, even if it is in percentage terms. I mean, $1500 on average. Even if you make a lot over the average, it still seems like Texas's biggest win will be the $300,000 difference in the price of a house, or $1000/mo difference in rent, not a few $k savings in taxes.
    - roboneal 17y ago
      That's $1500 PER CAPITA (every man, woman & child). All things being equal - $6K a year for a family of 4 is consequential.
      - deleted 17y ago
        [deleted]
- maxharris 17y ago
  Lower property prices are due to lower restrictions on building/zoning in Texas (compared to California). Building a new house in Texas is easy and cheap; in California it is nearly impossible, and very expensive.
  - _delirium 17y ago
    Sure, but that's pretty much what this whole article is about. (It also points out that another factor is Texas having more stringent mortgage regulation, which makes double-mortgage-fuelled property speculation harder.)
00joe 17y ago
Texas's per capita income is 20% lower than California's
- gojomo 17y ago
  It would be interesting to perform a purchasing-power-parity comparison here. Houses seem to be 1/2 to 1/4 the California price in similarly nice (but not as wealthy on an absolute scale) neighborhoods. When I stroll the aisles of a grocery store in the Austin area, many staples are 1/2 the cost of bay area supermarkets. Edit: upped low-end of house ratio to more realistic 1/4 from 1/6
  - 00joe 17y ago
    cost of living has nothing to do with attracting manufacturing jobs. The lower the labor costs the more jobs you get. Same reason China has more manufacturing that California
    - teaspoon 17y ago
      Labor costs are a function of cost of living.
      - eru 17y ago
        Are they? Any data to back up your claim? (As an equally plausible hypothesis I'd guess that outside of extreme regions like Antarctica, higher wages are a prime reason for real estate values, and thus contribute to higher costs of living.)
        btilly 17y ago
        Chicken meet egg. Egg meet chicken. Labor costs and the cost of living both affect the other. Arguing which came first is pointless since neither exists in a vacuum.
        17y ago
adamc 17y ago
General cost of living is lower in Texas, too. Some of that may be location, some of that to relatively abundant land for housing.

_delirium 17y ago

To most employees, Texas's much lower property values and more stable property market (as this article analyzes) have a lot bigger impact on the economics than the taxes, which are only marginally lower than California's when you add all the different taxes up (TX collects about $8k per resident in state&local, while CA collects about $9.5k). Employee-friendliness overall varies. I'd say the employment laws are generally worse for employee freedom than California's, mainly because TX courts are more willing to enforce noncompete clauses (though they aren't as willing to as some states).

benhoyt 17y ago
Speaking of employment laws, I'm curious how common "at-will employment" is in the US? (http://en.wikipedia.org/wiki/At-will_employment http://en.wikipedia.org/wiki/At-will_employment) I've recently been hired by a US company on at-will terms, and I understand it's much more common in the US than in New Zealand where I'm from -- things are much softer on employees in NZ.
- gojomo 17y ago
  'At-will' employment is the norm in the US for non-unionized jobs. The Wikipedia article describes the exceptions fairly well.
  - _delirium 17y ago
    One additional wrinkle is that customary practices at large firms are a bit different. Because they're worried about unlawful-termination suits (even if they'd end up winning them), large companies rarely fire specific people, except for really egregious things (like embezzlement), even though in theory at-will employment means they could fire anyone for any reason. Instead they only get rid of people in general downsizing/layoff rounds, like closing a whole division, or doing a blanket 10% reduction in staff--- and even then they often offer severance packages for long-term staff, to make it a mutually agreed upon parting.
roboneal 17y ago
Where are you getting your state & local tax numbers? The numbers I found show total state & local tax collected per capita for Texas is $3,580 vs. $5,028 for California. That's a 40% increase over Texas. Nothing to sneeze at. Texas: http://www.taxfoundation.org/taxdata/show/482.html http://www.taxfoundation.org/taxdata/show/482.html Cali: http://www.taxfoundation.org/taxdata/show/443.html http://www.taxfoundation.org/taxdata/show/443.html Even your numbers show a 20% penalty for living in Cali.
- _delirium 17y ago
  I was going by total state+local govt revenues divided by population, which ends up allocating as taxes things like vehicle registration fees, excise taxes, alcohol taxes, corporate taxes, etc., probably even lottery revenues. The Tax Foundation's method might be more meaningful, depending on what you're comparing. But either way it's not all that much of a difference in absolute terms, even if it is in percentage terms. I mean, $1500 on average. Even if you make a lot over the average, it still seems like Texas's biggest win will be the $300,000 difference in the price of a house, or $1000/mo difference in rent, not a few $k savings in taxes.
  - roboneal 17y ago
    That's $1500 PER CAPITA (every man, woman & child). All things being equal - $6K a year for a family of 4 is consequential.
    - deleted 17y ago
      [deleted]
maxharris 17y ago
Lower property prices are due to lower restrictions on building/zoning in Texas (compared to California). Building a new house in Texas is easy and cheap; in California it is nearly impossible, and very expensive.
- _delirium 17y ago
  Sure, but that's pretty much what this whole article is about. (It also points out that another factor is Texas having more stringent mortgage regulation, which makes double-mortgage-fuelled property speculation harder.)

00joe 17y ago

Texas's per capita income is 20% lower than California's

gojomo 17y ago
It would be interesting to perform a purchasing-power-parity comparison here. Houses seem to be 1/2 to 1/4 the California price in similarly nice (but not as wealthy on an absolute scale) neighborhoods. When I stroll the aisles of a grocery store in the Austin area, many staples are 1/2 the cost of bay area supermarkets. Edit: upped low-end of house ratio to more realistic 1/4 from 1/6
- 00joe 17y ago
  cost of living has nothing to do with attracting manufacturing jobs. The lower the labor costs the more jobs you get. Same reason China has more manufacturing that California
  - teaspoon 17y ago
    Labor costs are a function of cost of living.
    - eru 17y ago
      Are they? Any data to back up your claim? (As an equally plausible hypothesis I'd guess that outside of extreme regions like Antarctica, higher wages are a prime reason for real estate values, and thus contribute to higher costs of living.)
      - btilly 17y ago
        Chicken meet egg. Egg meet chicken. Labor costs and the cost of living both affect the other. Arguing which came first is pointless since neither exists in a vacuum.
        17y ago

adamc 17y ago

General cost of living is lower in Texas, too. Some of that may be location, some of that to relatively abundant land for housing.