Texas vs. California Comparative Trends Analysis: Total Employment Growth and Change, 1969-2022 Introduction Texas: 2022 Jobs = 19,631,436 2022 Percent of U.S. = 9.24% 2022 Rank = #2 California: 2022 Jobs = 25,300,974 2022 Percent of U.S. = 11.91% 2022 Rank = #1 Employment numbers remain the most popular and frequently cited statistics used for tracking local area economic conditions and trends. The Bureau of Economic Analysis (BEA) employment estimates reported measure the number of full- and part-time wage and salary employees, plus the number of proprietors of unincorporated businesses. People holding more than one job are counted in the employment estimates for each job they hold. This means BEA employment estimates represent a job count, not a people count. Also, BEA employment is by place-of-work, rather than by place-of-residence. Jobs held by neighboring county residents who commute to Texas to work are included in the employment count for Texas. Data Definition: The BEA employment series for states and local areas comprises estimates of the number of jobs, full-time plus part-time, by place of work. Full-time and part-time jobs are counted at equal weight. Employees, sole proprietors, and active partners are included, but unpaid family workers and volunteers are not included. Proprietors employment consists of the number of sole proprietorships and the number of partners in partnerships. The description "by place of work" applies to the wage and salary portion of the series and, with relatively little error, to the entire series. The proprietors employment portion of the series, however, is more nearly by place of residence because, for nonfarm sole proprietorships, the estimates are based on IRS tax data that reflect the address from which the proprietor's individual tax return is filed, which is usually the proprietor's residence. The nonfarm partnership portion of the proprietors employment series reflects the tax-filing address of the partnership, which may be either the residence of one of the partners or the business address of the partnership. The employment estimates are designed to be consistent with the estimates of wage and salary disbursements and proprietors' income that are part of the personal income series. The employment estimates are based on the same sets of source data as the corresponding earnings estimates and are prepared with parallel methodologies. Two forms of proprietors' income-the income of limited partnerships and the income of tax-exempt cooperatives-have no corresponding employment estimates. Total Employment, 1969-2022 Figure 1. Figure 1 traces Texas' and California's annual total employment for the period 1969-2022 to illustrate total employment patterns over time. During this 54-year period, Texas' total employment rose from 5,005,193 in 1969 to 19,631,436 in 2022, for a net gain of 14,626,243, or 292.22%. In comparison, California's total employment advanced from 9,032,738 in 1969 to 25,300,974 in 2022, for a net gain of 16,268,236, or 180.10%. Texas' total employment ranked 2nd among the 51 states in 2022, California's ranked 1st. Total Employment Indices (1969=100): 1969-2022 Figure 2. Figure 2 portrays Texas' total employment growth in a broader context by offering direct comparisons across time with California, the United States. The growth indices shown here express each region's total employment in 1969 as a base figure of 100, and the total employments in later years as a percentage of the 1969 base figure. This method allows for more direct comparison of differences in total employment growth between regions that may differ vastly in size. Texas' overall total employment growth was 292.22% over 1969-2022 outpaced California's increase of 180.10%, and topped the United States' increase of 133.32%. Total Employment as a Percent of the United States Total: 1969-2022 Figure 3. Another interesting and insightful way of highlighting the total employment growth of Texas and California is to compare their individual percentage contributions to the United States' total total employment over time, as shown in Figure 3. A rising share means a state's total employment grew faster, or declined less, than the United States' total employment, while a declining share shows they grew more slowly. In 1969, Texas' total employment comprised 5.50% of the United States' total employment, while in 2022 it comprised 9.24% thereby yielding a +3.74% share-shift. Similarly, in 1969, California's total employment made up 9.92% of the United States' total employment, while in 2022 it accounted for 11.91%, resulting in a +1.99% share-shift.
Texas Total Employment: Annual Percent Change, 1970-2022 Figure 4. Figure 4 highlights the short-run pattern of Texas' total employment growth by tracking the year-to-year percent change over 1970-2022. The average annual percent change for the entire 53-year period is also illustrated on this chart to provide a benchmark for gauging periods of relative high--and relative low--growth against the backdrop of the long-term average. On average, Texas' total employment grew at an annual rate of 2.63% over 1970-2022. The state recorded its highest growth in 1978 (5.82%) and posted its lowest growth in 1986 (-1.84%). In 2022, Texas' total employment grew by 5.78% Texas Total Employment: Annual Percent Change and Decade Averages Over 1970-2022 Figure 5. Over the past six decades some states have experienced extreme swings in growth, and often such swings have tended to coincide with the decades themselves. Figure 5 again shows the annual percent change in Texas' total employment since 1970, but this time they are overlayed with average growth rates for the decade of the 1970s, 1980s, 1990s, 2000s, 2010s, and 2020-2022. During the 1970s, Texas' annual total employment growth rate averaged 3.74%. It averaged 2.26% during the 1980s, 2.71% throughout the 1990s, 1.92% throughout the 2000s, 2.34% during the 2010s, 3.17% thus far this decade (2020-2022). Total Employment Growth: Average Annual Percent Change by Decade Figure 6. Figure 6 compares the decade average growth rates for Texas noted in the previous graph with the corresponding decade averages for California and the nation. As the chart reveals, Texas' average annual total employment growth led California's average in the 1970s (3.74% vs. 3.29%), posted below California's average throughout the 1980s (2.26% vs. 2.81%), exceeded California's average throughout the 1990s (2.71% vs. 1.40%), led California's average throughout the 2000s (1.92% vs. 0.53%), surpassed California's average throughout the 2010s (2.34% vs. 2.03%), and registered above California's average over the 3 year period of the current decade, 2020-2022 (3.17% vs. 1.55%). Finally, relative to nationwide total employment growth trends, Texas exceeded the nation throughout the 1970s (3.74% vs. 2.21%), outperformed the nation in the 1980s (2.26% vs. 1.88%), surpassed the nation in the 1990s (2.71% vs. 1.73%), outperformed the nation throughout the 2000s (1.92% vs. 0.74%), surpassed the nation over the 2010s (2.34% vs. 1.51%), and exceeded the nation over 2020-2022 (3.17% vs. 1.82%). Job Ratios (Employment/Population): 1969-2022 Figure 7. The job ratios shown in Figure 7 for Texas, California and the nation not only portray a number of important trends, they also serves as a thumbnail guide to evaluating an economy's capacity to generate enough jobs fast enough to absorb the increasing number of workers attendant to a growing population. The job ratio is the number of full-time and part-time jobs by place of work, divided by population. Nationally, the job ratio rose from 0.45 to 0.64 between 1969 and 2022. Texas' job ratio registered 0.45 in 1969, and 0.65 in 2022. Underlying the rising job ratio over the past several decades have been the increases in the labor force participation rates, with the number and proportion of women in the labor market playing a leading role. An assortment of other factors can contribute to regional differences in the job ratio. They include differences in the proportion of elderly and retirees who no longer work and participate in the labor force, differences in the number and proportion of part-time vs. full-time workers, differences in industry composition, and differences in age and sex distribution and degree of urbanization. Also, a disproportionate number of workers commuting to work outside a state tends to lower its local state job ratio, while a net inflow of workers commuting to work inside the state tends to augment its local state job ratio. Avoid interpreting the job ratio as the fraction (or percent) of the local population employed. This interpretation should only apply to the "employment-population ratio" statistic compiled by the Bureau of Labor Statistics (BLS) from the Current Population Survey (CPS). Job Ratios (Employment/Population) as a Percent of the U.S. Average: 1969-2022 Figure 8. To highlight trends in a local job ratio relative to nationwide trends, Figure 8 tracks Texas', California's, and the United States' job ratio as a percent of the national job ratio over 1969-2022.
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