There’s been a lot of hype this month about CA now having the world’s sixth largest economy. And the state DID do well in 2015 compared to the other states, after lagging for several years.
Impressive!
Well, actually, not.
California has 39 million people — 43% larger than the 2nd largest state (Texas). Such GDP comparisons don’t tell us much in terms of the PROSPERITY of a nation. Or a state.
The proper comparison is PER CAPITA GDP. Using that more meaningful figure, CA is the 10th most prosperous state.
But an even MORE accurate comparison is to take the per capital GDP and adjust it for COL. Because of California’s high taxes, crazy utility laws, stifling regulations (paid by consumers) and sky-high housing costs, CA in 2014 ranked WAY down in 37th place. Only 13 states were worse.
BTW, using the per capita GDP, as a nation CA in 2014 ranked 19th when compared with other nations. And that fails to consider California’s super-high COL, which is 34.3% higher than the U.S. national average.
Here’s the details on the 2014 data and rankings:
http://riderrants.blogspot.com/2014/09/the-true-ranking-of-californias-gdp-vs.html
http://riderrants.blogspot.com/2014/09/the-true-ranking-of-californias-gdp-vs.html
Comments 20
Stop the presses!!! Richard Rider has a post critical of California!
Author
HQ, I’m SURE you prefer the “Everything Is GREAT” propaganda emanating from your buddies running Sacramento. I’m just drizzling a bit on their parade.
Sadly for them (and you, of course), I use facts and references. And tell the REST of the story.
Richard,
Everything isn’t great in California or anywhere else for that matter but everything isn’t terrible either or we wouldn’t have the largest population (by far) in the country.
People can choose where to live and many more are choosing California over any other state. In fact California has almost 50% more residents than your beloved Texas.
HQ,
Illegal aliens are moving in. Taxpayers have been moving out for years:
http://www.howmoneywalks.com/irs-migration-data/
W.C.,
If we are a state of illegal aliens and all the rich people and successful businesses are leaving, then please explain the current economic data stating California has the sixth largest GDP in the world, recently passing France and closing in on the UK for fifth.
I wonder how a migration characterized by illegal murderers and rapists (some, I assume are good people) displacing productive taxpayers results in California having the #1 growth rate in personal income per capita among all states.
Please explain.
http://blogs.wsj.com/economics/2016/03/24/income-growth-averaged-4-4-last-year-how-did-your-state-do/
Exodus — movement of Jah people!
WC,
According to the article you cited and based on California’s current population, we had a net migration of 0.16%. We will probably survive that. More to the point, it doesn’t address the point that our economy is growing (now sixth in the world) and as Encinitas Dad cited, our per capita personal income grew 6.3%, more than any other state.
Hypocrisy: The net income is due to skyrocketing salaries in Silicon Valley and skyrocketing home prices adding to personal income. I have worked in the private sector all my life, including many years in Silicon Valley so I know first-hand. But you have no clue.
The net effect? People are fed up and fleeing California.
http://www.mercurynews.com/business/ci_30037774/greener-pastures-beckon-some-beleaguered-residents
With the horrible taxes and regulations, you Democrats have turned a beautiful state into a super expensive hellhole that suffocates the life out of people and forces them to move. Congratulations Hypocrisy and Encinitas Dad!
Dan,
I too have spent my entire working life in the private sector. Personal insults do not bolster your argument. Nor does saying that increased home prices add to per capita income, perhaps per capita wealth but not income.
I do understand that there are some individuals (and businesses) that would prefer to exist in a state or country with less regulation and a lower cost of living. I completely understand the thinking behind those thoughts and moving is certainly their right. However, don’t confuse that with thinking that California is a “hellhole” or it is in an economic downturn due to a mass exodus of all of the successful people. The numbers, not the anecdotes, tell a very different story.
Author
HQ, you continue to reside in the past. Things changed in CA, starting in 1992.
Consider California’s net domestic migration (migration between states). From 1992 through 2014, California lost a NET 3.7 million people to other states. Net departures slowed in 2008 only because people couldn’t sell their homes. But more people still leave each year — in 2014 we lost 79,340. Again, note that these are NET losses. Sadly, our policies have split up many California families.
https://twitter.com/SenTedCruz/status/464827967747526656/photo/1
and
http://riderrants.blogspot.com/2015/04/were-california-real-estate-prices.html
It’s likely that it’s not the welfare kings and queens departing. They are primarily the young, the educated, the productive, the entrepreneurial, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their nest-eggs provide more bang for the buck.
Author
HQ, as you correctly point out, “The numbers, not the anecdotes, tell a very different story.” A very different story than the one you are telling:
“For generations CA population grew faster than Texas. But since 1992 the trend has reversed.”
by Richard Rider
June, 2015
For decades the population of California was growing faster than Texas. It roared past the population of Texas in 1934 and never looked back.
But by 1992 that trend had changed. Here’s the comparative figures in millions:
STATE ** 1992 ** 2014 ** Difference
California ** 30.97 ** 38.80 ** 7.83 million growth
Texas ** 17.76 ** 26.96 ** 9.20 million growth
https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=state:48000:06000:12000&hl=en&dl=en
The difference is even more dramatic when one looks at the PERCENTAGE of growth in that time frame:
California 25.3%
Texas 51.8% — over TWICE the growth rate of California
The difference in growth is found in the “net domestic migration” — the movement among states. Since 1992 CA has lost a NET of 3.7 million people to other states. I say again — NET. Meantime Texas has been annually receiving thousands of economic refugees from other states — notably California.
California still grew in population because of three other factors:
1. Births
2. INTERNATIONAL migration — legal and illegal
3. People live longer
Hypocrisy: Never said it was in an economic downturn.
Very surprised at one of your statements. For a man who allegedly “works in the private sector all my life”, you think and write like a man who is a public government employee. Honestly don’t see much free enterprise or private sector thinking in your statements over the years. Just my opinion.
If this is the case, I can only conclude that you have exclusively worked for a monopoly or semi-governmental entity like a non-profit, a union, or a regulated monopoly like the gas company. These people reject freedom and free market competition and it’s sadly evident in their love of the nanny state big government.
But back to the topic, as Richard correctly points out, it’s the young, talented, and ambitious who see that they will forever be behind the 8 ball and never have the chance for home ownership or to establish themselves in California. The smothering regulations, taxes, and huge expenses have killed their chance. They have NO choice but to leave for freedom and the chance to make a life for themselves in another state.
Population ≠ Economy ≠ Quality of Life.
See: China, India, Texas.
The truth is that the California-Texas comparison is analogous to US-Asia. We (California, US) invent revolutionary new goods and services that move the world economy forward. The creative class is high-risk, and high-reward. These are the most dynamic and lucrative jobs in the economy.
Inventing intellectual property, proving out new concepts and markets, defining new parnership networks, supply chains, and delivery models require the highest skill base workforce anywhere. The worlds best and brightest come here (US generally and California specifically) to be at the tip of the spear or economic progress.
Once these inventive goods and services mature, then it’s no longer about hyper growth, it’s about cutting cost and making the business more efficient, often by cutting labor cost by moving low skill work to cheap labor markets like Texas and Asia.
The Computer. The Smartphone. Reusable rockets. Genetically targeted pharma products. Mass market electric vehicles. Ride sharing. Home sharing. Cyber finance. Cloud computing.
Which one of these was invented and developed in Texas (or Asia)?
If you consider yourself high skill and high value, you belong here. If you want to punch a clock, your job is waiting for you in Texas. But be careful, because there are people in Mexico and Asia who will do that job cheaper, so your job might not stay in Texas.
I’d rather be a part of this economy than Texas’ or Asia’s.
Richard,
“It’s likely that it’s not the welfare kings and queens departing. They are primarily the young, the educated, the productive, the entrepreneurial, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their nest-eggs provide more bang for the buck.”
Sorry, but the above statement just doesn’t jive with the fact that California’s economy has grown to the sixth largest in the world (probably soon to be 5th thanks to Brexit) and that our per capita income has increased more than any other state’s.
Quality of Life = Economy / Population
Ok it’s not 100% that simple, but that’s a pretty good proxy.
But seriously, I agree with much of what Encinitas Dad wrote.
But Silicon Valley is here and great not because of government policy but in spite of it. You can have the Silicon Valleys and Hollywoods without being simultaneously punitive to small businesses and the middle class.
I agree WC.
We can and should do whatever possible to hold jobs here as long as possible.
Author
Yes, HQ, our CA economy is now ranked 6th in the world. But obviously China is a more prosperous country, because they have the 2nd highest GDP. If only the people of CA were as prosperous as the Chinese.
Right?
Only in the mind of a labor union official.
BTW, CA was 5th in the world’s GDP in 1999. Not exactly soaring in that department.
I understand why you stick to “national” GDP, and studiously avoid the more telling PER CAPITA GDP of our states, or the even more accurate per person GDP adjusted for COL. It’s right out of the Progressives’ playbook: Ignore reality and what constitutes prosperity. Use a bogus indicator and declare victory.
No sale here. 36 states kick California’s ass when it comes to prosperity.
As to CA exceeding the national average on employment and per capita income increase, that is true — for one year. But a comparison of CA with TX and the other free market states since the recession started shows which states have carried the nation with job creation, and which state lags sadly behind even after having a good 2015.
Author
HQ, most of our improvement in CA GDP has been chewed up by a commensurate increase in our COL. In the 1st quarter of 2016, California’s COL ranked 36.2% higher than the national average, up from “only” 34.3% in 2014.
https://www.missourieconomy.org/indicators/cost_of_living/