A recent analysis shows that states with low wages but affordable housing dominate job creation. Ohio, however, is not one of them, falling from 15th place in job creation in 2014-2019 to 43rd in job creation in 2019-2024.
The data shows that from 2014 to 2019, Ohio experienced a net gain of 272,402 jobs and a net loss of 30,741 jobs over five years.
More than half of the nation’s jobs created in the last five years were in two states: Texas and Florida.
These states are at the forefront of a job creation revolution, with states with lower wages and lower costs of living gaining the greatest share of recent jobs, according to a recent Stateline analysis from the U.S. Bureau of Labor Statistics. data.
Meanwhile, high-wage states such as California, New York, Washington state and Massachusetts dropped out of the top ten. California, which had the highest share of recent jobs from 2014 to 2019, fell to the bottom in job creation.
The changes closely reflect state labor market trends in the years during and after the Covid-19 pandemic. Employers were less willing to create jobs in states with higher wages. Meanwhile, employees are avoiding skyrocketing housing costs and taking advantage of recent remote work opportunities.
“Workers are likely to play a greater role in the wake of the pandemic as many have gained new flexibility in where they work and live,” said Aaron Sojourner, a labor economist at the WE Upjohn Institute for Job Research in Kalamazoo, Michigan.
“About 1 in 10 U.S. workers now work fully remotely, made possible by organizations investing in distributed work capabilities during the pandemic,” Sojourner said. “Many families with high-paying remote jobs have moved to areas with a lower cost of living because they are no longer tied to an expensive location.”
Between 2014 and 2019, California added 1.4 million recent jobs – more than any other state and representing 12% of the nation’s total jobs. But over the past five years, California has been dead last in job creation, losing about 214,000 jobs. During that time, Texas topped the list, adding nearly 1.3 million recent jobs, accounting for nearly one-third of all recent jobs created in the nation.
Florida wasn’t far behind with about 911,000 recent jobs, representing almost 25% of the nation’s total jobs of about 4 million.
In addition to California, which dropped from 1st to 51st in state job creation and the District of Columbia, New York dropped from 5th to 50th and Massachusetts from 7th to 47th.
Washington State, Michigan and Tennessee also dropped out of the top 10, while Arizona, Utah, Virginia, South Carolina, Oklahoma and Colorado made the top 10.
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High wages in some states are playing a role in lagging job creation, according to an April study analysis by the Economic Innovation Group, a research organization based in Washington.
According to federal employment and wage statistics, in California and New York average salaries are about 18-20% higher than the national average of $65,500, while in Texas and Florida they are 6-7% lower data.
“For the first time since the Great Recession, the wealthiest metropolitan areas no longer create the majority of new U.S. jobs,” the report noted.
Some of the changes in career fortunes are due to the battle between California’s Silicon Valley and Austin, the capital of Texas, for supremacy in tech jobs. California’s share of tech jobs started falling during the pandemic as Texas’ share increased.
In the 2020 Wall Street Journal opinion piece titled “California, Love It and Leave It” – venture capitalist Joe Lonsdale described moving his company from San Francisco to “a new land of opportunity: Texas.” He blamed bureaucracy for slowing business growth during the pandemic and restrictive zoning that prevented workers from living near their workplaces.
Jeffrey VonderHaar recently discussed in February his plans to move much of his company, Specialized Orthopedic Solutions Inc., which makes prosthetic limbs and other medical equipment, back to Texas after 14 years in California. In interview with Business Insiderhe complained about business regulations and taxes in California, as well as high housing prices that are causing homelessness and people living in RVs parked near his office in suburban Los Angeles.
Last year, Republican Texas Governor Greg Abbott happily declared Austin a “destination for the world’s leading technology companies” in tweetremembering Teslaand SAMSUNGexpands operations in the Austin area. Democratic U.S. Rep. Lloyd Doggett, who represents the Austin area, told Stateline that Samsung is building a third semiconductor plant in the region and already employs thousands of Texans.
However, recent cuts in technology have led to setbacks in Texas and across the country California. Oracle announced in April moving to Nashville, Tennessee from Austin, where it built a massive lakeside campus with tax breaks, citing even more generous incentives from Tennessee. Tennessee approved $65 million in tax credits in 2021 as Oracle pledges to create approximately 8,500 jobs; The average salary in Tennessee is also about 5% lower than in Texas.
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Oklahoma made the biggest jump in Stateline’s analysis of job creation rankings, from 31st to 9th. The state has reversed the “brain drain” it experienced in delayed 2010, when it lost educated residents to other states, according to tests this year by the Oklahoma City branch of the Federal Reserve Bank of Kansas City.
Before the pandemic, the state was losing college graduates and higher-income earners to other states, but the tide has turned, said Chad Wilkerson, the bank’s Oklahoma City branch manager and author of the report.
Leaders want to expand Oklahoma’s job landscape beyond the cyclical energy industry, which attracts blue-collar workers but also creates boom-and-bust cycles, Wilkerson said. Many recent Oklahomans have college degrees and are employed in business services such as research, development and engineering, as well as retail management, reflecting both population growth and a more diversified economy.
– This was somewhat intentional by Chambers [of commerce] and state policy, the desire to attract more than just oil and gas,” Wilkerson said.
Privately financed Tulsa Remote for example, the program attracted thousands of remote tech workers from other states with the promise of lower costs of living and shared workspace to encourage connections and friendships. A 2021 study found that $4.5 million spent on attracting recent residents paid off in the form of $62 million in recent jobs – both for these workers and other jobs created to support them.
Most states do some form of incentives to create jobs and evaluate them regularly for effectiveness. Oklahoma has introduced tax incentives for data processing and research and development positions, and last year launched a state commission Recommended keeping them.
State tax incentives may pay off in the long run, but their effects are modest, said Robert Chirinko, a finance professor at the University of Illinois whose latest study The State of Tax Incentives for Job Creation was published in September by the National Tax Journal.
Florida has had a decade of job creation, rising in the rankings from No. 3 to No. 2 in the last five years. But overall, the economic landscape is diverse.
Wages are not keeping pace with inflation and housing prices in the Miami area are particularly high, making poverty a growing problem, study finds last year’s report by the Center for Labor Research and Studies at Florida International University.
“It’s a story about the rich and the poor,” said Ravi Gajendran, a business professor at Florida International University in Miami. “Large migration [to Florida] is due to wealthy people moving to Miami, which is one of the reasons for the greater augment in real estate prices here.
“For someone moving from New York or California, real estate prices in Miami are still low,” he said. “But for local Miamians, it increases real estate and rental costs, making it less affordable to stay here.”
