By Dennis Meyers (Twitter: @goldstateoutlok)
“The report of my death was an exaggeration.” Mark Twain
“With your help, that’s what we’ll do … prove the declinists wrong once again.” Governor Jerry Brown
California has attracted more than its share of negative press over the last several years, much of it driven by the state’s beleaguered housing markets and by ongoing state and local government fiscal problems. These issues, though, obscure the fundamental strength of the Golden State’s dynamic and vibrant economy.
To rectify this situation, this post and three others to follow will highlight California’s exceptional assets.
- Part one below shows that California is a big state with a big diverse economy to match.
- Part two will illustrate that on average, compared to the rest of the nation, Californians is a wealthy and prosperous place.
- Part three will describe why California is a leader in innovation, which derives from the fact that Californians on average are well educated.
- Lastly, part four will show that, despite the current frustration over the state’s fiscal situation, the state budget is not as burdensome as many believe.
Part 1: California is a Big State with a Big Economy
In 2011, California’s was home to 37.5 million residents—12 percent of the total U.S. population. It is by far the most populous state in the nation—42% larger than the next largest state, Texas.
California has grown about twice as rapidly as the nation in recent decades, averaging over 18 percent growth for each decade between 1950 and 2010. Although California’s population growth has slowed since the 1980s, it is still expected to grow by roughly one percent annually over the next ten years.
California’s economy, the largest among the 50 states and one of the largest and most diverse in the world, has major components in high technology, trade, entertainment, agriculture, manufacturing, government, tourism, construction, and services. If it were a country, California’s economy would be the 9th largest in the world. As with its population, California is considerably larger than 2nd ranked Texas. However, the gap has been closing in recent years.
California accounts for almost 11 percent of the nation’s nonfarm workers—Texas accounts for 8 percent. As a wealthy state, California accounts for a disproportionately larger share of the nation’s personal income—13 percent—while Texas accounts for a disproportionately smaller share—7.7 percent.
On the other hand, California lost its lead as the nation’s leading exporter in 2002 and is now second behind Texas. California accounted for about 11 percent of the nation’s exports during the first three quarters of 2011, whereas Texas accounted for 17 percent.
The principal explanation for California’s high incomes is that it specializes in many of the leading high-paying high technology industries. For instance, as a share of the economy, computer manufacturing is nearly four times larger in California than in the nation as a whole.