Rose Bowl move adds spice to California-Texas tug-of-war


The California-Texas rivalry has taken two surprising twists: The Rose Bowl will be played near Dallas while the gap between the two state’s jobless rates reached a 14-year low.

Pasadena’s annual college football classic is taking a pandemic-era detour amid California business limitations so the teams can face off in front of fans. This follows a string of Texas “victories” such as key California corporations relocating their headquarters to the Lone Star State not to mention 297,000 more Californians leaving for Texas than arriving during the past decade.

Efforts to quell the coronavirus have been one of 2020’s biggest business debates. Critics of Gov. Gavin Newsom’s lockdowns and the state’s long-perceived anti-business bias frequently cite low-regulation Texas as a prime example of how governments should handle their economies.

Take California’s refusal to relax rules so families of the two Rose Bowl teams could watch in person. The college football gods opted to move the New Year’s Day game to a stadium in Arlington, Texas, where up to 16,000 people will be allowed to attend. By the way, Pasadena’s signature Rose Parade has long been canceled due to similar restrictions on crowds.

While Alabama and Notre Dame prepare to face off for a shot at the national championship, there are larger implications for the two states’ economies as the virus continues to rage in both. In November, California’s unemployment rate fell to 8.2% from 9% while Texas’ joblessness rose to 8.1% from 6.9%.

California in the fall was slowly reopening its economy, a trend that was upended in December as cases surged. Texas has struggled with the pandemic, too, along with weak energy markets that are key to one of the state’s major industries.

To be fair, unemployment isn’t the tell-all economic benchmark. But this narrow jobless gap is a true rarity. As someone who covers the grand economic skirmishes between the two states, I think history is worth reviewing.

My trusty spreadsheet tells me the last time California’s unemployment was the same as Texas, or better, was July 2006. It was the end of a nine-month period when the superheated mortgage bubble propelled California’s economy past Texas, at least as far as joblessness was concerned.

The only other recent time California outperformed like this — according to a government unemployment database that dates to 1976 — was a half-decade-long span from August 1985 to September 1990. Back then, the world’s oil markets collapsed, leaving energy businesses and the Texas economy in shambles.

Amid this interstate business battle, it’s fair to say that moving one event for one year is no economic gamechanger, pardon the pun. Though I know there are folks who’ll argue the relocation symbolizes the economic costs of California’s over-zealous attempts to battle the pandemic.

However, the wealth vs. health math is gut-wrenching to think about, no less tricky to calculate.

For example, a study by Chapman University economists suggests California’s stringent controls saved 6,600 lives but cost 500,000 jobs. Texas’ less-restrictive actions cost 1,100 lives but saved 150,000 jobs, the study says.

I’ll simply note that through Monday, Texas had 26,500 coronavirus deaths this year vs. 24,200 in California, a state with 40% more residents.

Monetarily speaking, a curious twist to this rivalry is that these two giant economies were the backbone of the national recovery from the Great Recession of 2009-10.

Coming into 2020, California — the nation’s biggest job market — had just finished a decade where it added 3.4 million jobs. That’s a 2.2% annual growth rate. Texas’ No. 2 job market added 2.7 million workers in the 2010s — or a 2.4% annual growth rate. The rest of the nation grew at only a 1.5% pace.

That translates to two states with almost 20% of all U.S. jobs creating 27% of nationwide hires last decade — a share that’s up from 24% during the previous 20 years.

And it’s a good bet that these two economies will again be key in the national economic revival from COVID-19, no matter which one wins the bragging rights.

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