The Declinists are Wrong, Part 2

California is Wealthy

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

Part one of this series showed that California is a big state with a big diverse economy to match.  Part two demonstrates that compared to the rest of the nation, Californians generally are wealthy and well paid.

California is a land of contrasts, physically and socially.  It is home to bustling cosmopolitan coastal metropolises as well as quiet rural communities spread across mountains and deserts.   From an economic perspective, it is impossible to paint the state with a single brush.  In addition to possessing a diverse economy, California is a prosperous place.

California’s per capita personal income is 7 percent higher than the national average.  It ranked 14th among all states (including D.C.).

California is home to a disproportionate share of the nation’s wealthiest communities. Among communities with 75,000 or more residents, 16 of the richest 50 and 31 of the richest 100 are in California.

California generally outperforms the nation at creating high-paying jobs in leading industries—computer manufacturing and information.

Although the national job growth in Professional and Business Services in 2011 outpaced California, it was mainly due to stronger growth in employment services (temporary help).  Over the course of 2010 and 2011, California generally outpaced the nation’s job gains in the higher paid professional subsectors.

The one high-wage sector in which national job gains outpaced those in California was Mining, which includes oil and natural gas production.  There are several regions, such as Texas, that are blessed with generous deposits of these resources which California lacks.  This advantage also shows up in Engineering Services employment noted above.  The presence of healthy oil and natural gas resources typically generates demand for engineering consulting services related to exploration and extraction.

Since the year 2000, California has imposed a minimum wage requirement that is higher than the federal minimum wage.  This contributed to the achievement  that California has one of the lowest rates of workers earning at or below the federal minimum wage.  In 2010, only 2 percent of California workers earned at or below the federal minimum.  Texas and Mississippi were tied with the highest rate at 9.5 percent.

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3 Comments

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3 responses to “The Declinists are Wrong, Part 2

  1. Hmm. While I don’t agree with the declinists, who seem to think that environmental regulation, racial and ethnic minorities etc., are causing California to go to he** in a handbasket, I have to disagree with your argument that most Californians are wealthy. Some Californians have high incomes, but when half of all tenants (who make up 42% of California’s population) pay more than 30% of their income for housing, which nearly a quarter pay more than 50%, California’s population cannot be described as wealthy. And while we have a lot of jobs in high-earning occupations, we also have far more people working in low-paid service occupations–and those occupations are likely to grow much more as the economy recovers.

    Finally, our housing costs are 50% higher than the national average, so 7% more income doesn’t help most people.

  2. Two observations: 1. The larger than U.S. decline in non-durable goods was due to California’s garment industry. It is the only sizable one left in the U.S. and took a big hit in the recession, and 2. California is not poor in energy resources, but it is resistant to allow the exploitation of those resources. Were CA to have had the same attitude toward oil and gas drilling as TX, NB and WY you would see a much more rapid increase in mining and extraction.

  3. Pingback: The Declinists are Wrong, Part 3 | goldenstateoutlook

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