Texas: The Lone Economy State
Looks like Texas is the place to be in this economy. All you Cali kids should move on over here.
By Patti Domm Executive Editor | 23 Oct 2008 | 06:14 PM ET
Thousands are losing their jobs at Merck. Thousands more are being cut at Xerox, Yahoo, Chrysler and General Motors.
Those companies were in the news just this week, and they weren’t alone. Corporate America is now following the lead of Wall Street, where tens of thousands have lost jobs, many of which will never return. The question, though, is this: As the layoffs add up, how bad will unemployment be in this recession? And what does that mean in terms of when and how the economy will recover?
It really is a different job market this time, and that might be a slight positive for workers, economists say. For one, there was no big ramp-up of new employees ahead of this economic downturn. But there are plenty of other factors that make this job environment more worrisome. One of those issues is the fact that there’s no turnaround in sight for housing, which can only aggravate job losses.
“You have a very broad-based decline in payrolls. The only good thing is that businesses did not seem to have aggressively hired during the boom. It never got to the point where there was hiring in advance or panic hiring,” said Mark Zandi, chief economist at Moody’s economy.com. That contrasts to the period prior to the dot-com bust, when companies were luring workers to internet companies with signing bonuses.
“The other unique feature of this is how broad-based these job cuts are. In other times, they were focused in a region or two,” he said. “By our calculation, there are 27 states in recession. Fifteen are close. It’s a much broader downturn than has been the case historically. That’s an issue to how these economies can adjust to all of these shocks.”
Typically, people have picked up and moved to another part of the country when times have gotten tough. Not this time, Zandi said. “There’s really no place to go. The only big economy that’s doing well is Texas.
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