Economy of California
|Economy of California|
The Seal of California features sailing ships in the background, symbolizing the state's economic power
|Output and standard of living|
|Gross state product||$2.0035 trillion (2012)|
|Income per capita||$43,647 (2012)|
|Labor force size||18,655,700 (August 2013)|
|Unemployment rate||8.9% (August 2013)|
|Inequality and poverty|
|Poverty rate||9.5 (23.5% considering cost of living)|
|State budget expenditures||$85.937 billion (2011-12)|
|Tax revenue||$88.456 billion (2011-12)|
California's economy is the 12th largest economy in the world (2012), if the states of the U.S. were compared with other countries. As of 2010, the gross state product (GSP) is about $1.9 trillion, which is 13.06% of the United States gross domestic product (GDP) The state's GDP growth rate slowed to 0.4% in 2008 after having grown 3.1% in 2006 and 1.8% in 2007. As of August 2013, the United States Department of Labor reports that California has the fifth-highest unemployment rate in the nation at 8.9 percent.
California, as a microcosm of the nation, experienced waves of internal and international migration. The state was also a leader in the high school movement and mass college education. California has a diverse economic base including agriculture, natural resources, World War II industries such as aerospace and aviation, shipping, and a vibrant film industry in the Hollywood region and computer industries in Silicon Valley.
Once the state became a territory of the United States after being part of Mexico, the early settlers on the frontier of this land encountered uncertainty over property rights, namely gold and water. The search for gold in California led to the California gold rush which started in 1848 and ended in 1855. Prior to, and following statehood, commerce and economic activity mainly centered around the Spanish settlements and California Missions established by Father Junípero Serra.
California's location along the Pacific coast gave way to the constructions of major seaports and airports across the state. The state's shipping industry then evolved to help support the growing international trade with Asia and Oceania. During World War II, California's location also meant it had to be the first line of defense against a possible Japanese invasion on the Contiguous United States, and therefore numerous military bases and various wartime industries were quickly established in the state.
Early farming in the state was primarily concentrated near the coast, and the Sacramento–San Joaquin River Delta in the Central Valley, where the water table was high year round and water transport more readily available. Starting in the late 19th century, Chinese workers were used to construct hundreds of miles of levees throughout the delta's waterways in an effort to reclaim and preserve farmland and control flooding. Subsequent irrigation projects then brought many more parts of the Central Valley into productive agriculture use. One of them was the Central Valley Project, formed in 1935 to redistribute and store water for agricultural and municipal purposes with dams and canals. The even larger California State Water Project was formed in the 1950s to help construct the California Aqueduct and its ancillary dams.
With Thomas Edison's invention of the Kinetoscope in 1894, California would be a leader in sound film development in the following decades. Cheap land, good year-round climate and large natural spaces prompted the growing film industry to begin migrating to Southern California in the early part of the 20th century. The film patent wars of the early 20th century actually led to the spread of film companies across the U.S. Many worked with equipment for which they did not own the rights, and thus filming in New York was dangerous; it was too close to Edison's company headquarters, and to agents which the company sent out to seize cameras. By 1912, most major film companies had set up production facilities in Southern California near or in Los Angeles because of the location's proximity to Mexico, as well as the region's favorable year-round weather.
Meanwhile, Stanford University, its affiliates, and graduates played a major role in the development of California's electronics and high-tech industry. From the 1890s, Stanford University's leaders saw its mission as service to the West and shaped the school accordingly. At the same time, the perceived exploitation of the West at the hands of eastern interests fueled booster-like attempts to build self-sufficient indigenous local industry. Thus, regionalism helped align Stanford's interests with those of the area's high-tech firms for the first fifty years of Silicon Valley's development. During the 1940s and 1950s, Frederick Terman, as Stanford's dean of engineering and provost, encouraged faculty and graduates to start their own companies. He is credited with nurturing Hewlett-Packard, Varian Associates, and other high-tech firms, until what would become Silicon Valley grew up around the Stanford campus.
|Top publicly traded companies
in California for 2011
according to revenues
with State and U.S. rankings
List of California companies
Source: Fortune 
California also pioneered numerous innovations in retailing during the mid-20th century, particularly fast food restaurants and credit cards. Nationwide fast food chains A&W Restaurants (1919), McDonald's (1940), Taco Bell (1961), and Panda Express (1983) were all founded in California. Visa Inc. (originally BankAmericard) was born from a 1958 experiment by Bank of America in Fresno, California, while MasterCard (originally Master Charge) was formed as the Interbank Card Association in 1966 by a group of California banks to compete against BankAmericard.
Government is California's largest industry, like most states, with about 2.5 million employees. The second largest industry, according to the Census, is Healthcare and Social Assistance.
International trade and tourism
California has historically derived significant revenue from international trade and tourism. However, the state's share of America's merchandise export trade has been steadily shrinking since 2000, from 15.4% to 11.1% in 2008. The exports of goods made in California totaled $134 billion in 2007. $48 billion of that total was computers and electronics, followed by transportation, non-electrical machinery, agriculture, and chemicals. California trade and exports translate into high-paying jobs for over one million Californians. According to the US Bureau of Economic Analysis (BEA), in 2005, foreign-controlled companies employed 542,600 California workers, the most of any state. Major sources of foreign investment in California in 2005 were Japan, the United Kingdom, Switzerland, France, and Germany. Foreign investment in California was responsible for 4.6 percent of the state's total private-industry employment in 2009. Total direct travel spending in California reached $96.7 billion in 2008, a 0.8% increase over the preceding year. Los Angeles County receives the most tourism in the state.
Agriculture (including fruit, vegetables, dairy, and wine production) is a major California industry. In fact, California is the world's fifth largest supplier of food and agriculture commodities.[page needed] Airborne exports of perishable fruits and vegetables amounted to approximately $579 million in 2007. By way of comparison, California exported more agricultural products by air that year than 23 other states did by all modes of transport.
According to the California Department of Food and Agriculture, "California agriculture is nearly a $36.6 billion dollar industry that generates $100 billion in related economic activity." The state’s agricultural sales first exceeded $30 billion in 2004, making it more than twice the size of any other state's agriculture industry.
California is the leading dairy state. Milk is California's number one farm commodity. California's dairy industry generated $47 billion "in economic activity" in 2004 and employed over 400,000 people."
Oil and electricity
Per capita income was $38,956 as of 2006, ranking 11th in the nation, but varies widely by geographic region and profession. Some coastal cities include some of the wealthiest per-capita areas in the U.S., notably La Jolla in San Diego, Beverly Hills, in Los Angeles County, Newport Beach in Orange County and Santa Barbara in Southern California, San Francisco, Silicon Valley and Marin County. The most expensive and largest housing markets in the U.S. are in the state of California, so there are a number of communities where average housing prices hover between US$1–2 million. Generally, the Central Valley in northern California is the least expensive area, as is the Inland Empire in Southern California, though prices in these regions are still much more expensive than most other areas of the country, to the point that there are also communities in these areas where housing prices average around the $1 million mark. The agricultural central counties have some of the highest poverty rates in the state. The high-technology sectors in Northern California, specifically Silicon Valley, in Santa Clara and San Mateo counties, are currently emerging from the economic downturn caused by the dot-com bust, which caused the loss of over 250,000 jobs in Northern California alone. As of spring 2005, data from UCLA Anderson indicates that economic growth has resumed in California, although still slightly below the national annualized forecast of 3.9%.[verification needed][dated info]
In 2008, when measured as a percentage of GDP, California had the 6th highest tax burden of the fifty states and has contributed on average well over 3.65 billion dollars per year for the last twenty years into the federal treasury than it has received in Federal services in return.  California has the highest marginal income tax rate at 13.3 percent. The 7.5 percent sales tax assessed by the state of California is the highest in the Union.
The international boom in housing prices has been most pronounced in California, with the median property price in the state rising to about the half-million dollar mark in April 2005. Orange County, Ventura County and the San Francisco Bay Area have the highest median prices, each approaching $650,000. The least expensive region is the Central Valley, with a median price of $290,000.
Various real estate markets in California experienced sharp increases in value in the early 2000s, followed by declines in 2007 and 2008, as a housing bubble burst.
However, beginning in 2007 with the Credit Crunch in the banking system, thousands of homes have been foreclosed statewide, thereby leading to plummeting home prices.
- California locations by per capita income
- California unemployment statistics
- 2008–10 California budget crisis
- Comparison between U.S. states and countries by GDP (PPP)
- Comparison between U.S. states and countries nominal GDP
- List of country subdivisions by GDP over USD 100 billions
- DeVore, Chuck (February 7, 2013). "Texas vs. California - myth-busting time". San Francisco Chronicle. Retrieved 6 October 2013.
- "Largest state GDPs in the United States - California Texas New York Florida". EconPost.com. November 11, 2009. Retrieved March 9, 2010.
- "California economy ranking among world economies". EconPost.com. November 8, 2009. Retrieved March 9, 2010.
- "GDP by State". Greyhill Advisors. Retrieved 7 September 2011.
- "Regional Economic Accounts (interactive tables)". Bureau of Economic Analysis. Retrieved January 31, 2010.
- "Unemployment Rates for States". United States Department of Labor. September 20, 2013. Retrieved 9 October 2013.
- Jacobs, Lewis; Rise of the American film, The; Harcourt Brace, New York, 1930; p. 85
- Markoff, John (2009-04-17). "Searching for Silicon Valley". New York Times (The New York Times Company). Retrieved 2009-04-17.
- Stephen B. Adams, "Regionalism in Stanford's Contribution to the Rise of Silicon Valley," Enterprise & Society 2003 4(3): 521-543
- Fortune 500 companies - California.CNN Money. Retrieved on February 26, 2012.
- "NAICS - North American Industry Classification System Main Page". US Census Bureau. January 14, 2010. Retrieved January 29, 2010.
- "Origin of Movement of U S Exports of Goods by State by NAICS-Based Product" (PDF). US Census Bureau. February 9, 2009. Retrieved January 29, 2010.
- "California: Exports, Jobs, and Foreign Investment". International Trade Administration. Retrieved May 2012.
- "California Statistics & Trends: Economic Impact of Travel in California". California Travel Impacts by County, 1992-2007. California Travel & Tourism Commission. April 2009. p. 3. Retrieved January 29, 2010.
- "California Agricultural Resource Directory 2006" (PDF). California Department of Food and Agriculture. March 26, 2007. Retrieved January 30, 2010.
- O'Connell, Jack. "The Role of Air Cargo in California's Agricultural Export Trade: A 2007 Update". Center for Agricultural Business, California State University Fresno. Retrieved May 2012.
- "CDFA History". California Department of Food and Agriculture. Retrieved January 30, 2010.
- "Agricultural Statistical Review, 2006 Overview" (PDF). California Department of Food and Agriculture. p. 17. Retrieved January 30, 2010.
- "Real California Milk Facts". California Milk Advisory Board. June 2009. Retrieved January 30, 2010.
- "State Personal Income 2006". Bureau of Economic Analysis, U.S. Department of Commerce.
- "The UCLA Anderson Forecast". UCLA Anderson Forecast.
- Hilston, James (August 17, 2008). "Enough said: Guess how Pennsylvania stacks up against other states on size of local/state tax burden". Pittsburg Post-Gazette. Block Communications. Retrieved January 31, 2010.
- "Cal Facts 2004 State Economy". Legislative Analyst's Office of California. December 3, 2004. Retrieved January 31, 2010.
|Wikimedia Commons has media related to Economy of California.|
- California's homepage
- California Department of Finance
- California Legislative Analyst's Office — California's Nonpartisan Fiscal and Policy Advisor
- Bureau of Economic Analysis — an agency of the U.S. Department of Commerce
- California's Commerce & Economic Development Program[dead link]
- Analyses of California's International Trade
- California Tourism
- California Commission for Jobs and Economic Growth
- Rancho de Los Arcos — about agriculture & economy
- California state budget