Saturday, November 29, 2014

In Texas V. California, Results, Not Intentions, Matter Most

By CHUCK DEVORE Investor's Business Daily

When it comes to poverty, the two biggest states, California and Texas, offer a vivid contrast: Results matter more than well-meaning intentions, and work beats welfare.

Once again, California has the highest poverty rate in the nation at 23.4%, according to a new Census Bureau report that takes into account the variable cost of housing from state to state as well as noncash benefits such as housing vouchers and food stamps. (The official poverty measure assumes the same costs throughout America.)

This broad poverty measure shows that Texas' poverty rate dropped to 15.9%, the national average. Along with the nation's highest poverty rate, California, with one-eighth of America's population, has one-third of the nation's welfare recipients.

Its state and local taxes are a whopping 52% higher as a share of income than Texas'. In fact, California could completely eliminate its income tax, the nation's highest, and it would still pull more money from its residents than does Texas.

The states where 1-in-5 Americans call home are both minority majority states. Hispanics make up 38% of the population in both, while 12% of Texans are black vs. 7% in California.

In spite of California's generous welfare programs designed to lift people out of material poverty and its heavy progressive tax burden intended to "spread the wealth around," the Golden State has 47% more people living in poverty on a per-capita basis than does Texas.

Breaking down the numbers by the three largest demographic groups, an average of 9.7% of white, non-Hispanics in Texas were in poverty from 2009 to 2012 vs. 14.8% in California.

Among blacks in Texas, 19.9% were in poverty, tied with North Carolina for the lowest rate among the 12 most populous states vs. 30.1% in California. For Hispanics of Mexican national origin, the poverty rate was 22.6% in Texas vs. 34% in California.

As for schools, according to the U.S. Education Department, Texas tied with Nebraska, Vermont and Wisconsin for the nation's second highest high school graduation rate at 88%. Iowa was first. California came in 30th, with a high school graduation rate of 78%, just behind West Virginia.

But graduation from high school means little if it's accomplished through social promotion. In the 2013 National Assessment of Educational Progress, the Education Department's national standardized test, Texas also bested California in fourth- and eighth-grade math and reading.

(California students do typically outperform their Texas counterparts on the SAT — but that's because a far higher percentage of Texas students take the SAT in the first place.)

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