4 reasons why Texas beats California in a recession

Bernard Weinstein, an economist and associate director of SMU's Maguire Energy Institute, talks about the economies of Texas and California.

By Kit R. Roane

FORTUNE — Back in 1965, The Mamas & the Papas reached the top of the charts with "California Dreamin'," a song pining for a return to the warm safety of their home state. But these days they'd be better off dreaming about Texas.

The reason is that Texas powered through the global fiscal crisis, while The Golden State's economy is forecast to remain tarnished for some time. . .

The union situation in Texas is also far different. While only about 6% of workers in Texas are covered by unions, the Federal Bureau of Labor Statistics puts the figure at more than 18% in California. Texas also has a lower minimum wage and lower land prices.

Such progressive taxes and safety nets can be good from a social perspective. "School districts are hurting" in Texas, says Professor Bernard Weinstein, an economist with the Cox School of Business at Southern Methodist University. "As a result of Texas's perennial fiscal austerity, the state has dropped from about 30th in per student spending a decade ago to 42nd today." SAT scores in the state have declined over the last few years, and the state ranked 34th among the 52 states and jurisdictions graded on the National Assessment of Educational Progress (NAEP) last year.

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