The Californian Economy
Introduction
Watching the news on TV or reading the newspapers you could well be forgiven that thinking the Californian economy has gone right down the tube. Whilst it is true that the economy of the Californian state government is in quite a mess, for Californians in general they mainly enjoy a high standard of living, which is easily illustrated by the fact that the Californian economy contributes some 13% to the overall gross domestic product (GDP) of the USA; if you want a figure on that it approximates to $1.8 trillion! So just how was the Californian economy built?
The early Californian economy
The story of how the Golden State of California, on the west coast, became the biggest single contributor to the nation’s wealth begins with the original native people inhabiting the land. In truth they did little with it other than farming and a few basic craft skills. However, the farming itself was to become a precursor to a major contribution to the Californian economy after the first European settlers arrived - who quickly established citrus fruit farms in the warm and sunny climate. By the late 1700s, mainly under the supervision of monasteries, the first vines were planted which, as we all know, by the late 20th century had matured into vineyards and winery’s capable of competing on the international stage for business.
The Californian economy of the 1800s
As American settlers started arriving in numbers from the east in the early 1800s timber became an increasingly important commodity and sawmills started springing up all over the state. However, the discovery of gold in 1848 brought on the great gold rush of ’49 and for the next 15 years the Californian economy was starting to take off. An often overlooked fact, but nonetheless of significance to the development of the Californian economy, was that California was the first state to legally recognize the separate property of a married women. The significance of this was that it attracted women of independent property and wealth from the east, who then invested in the Californian economy. The discovery of silver in nearby Nevada and the completion of the transcontinental railroad gave the state another boost and the years between 1870 and 1900 were known as the boom years, San Francisco expanded from little more than a small fishing port of 500 to a major international sea-port of fifty thousand in the space of just 5 years! With rail fares as low as $1 from New York to California and fertile farming land aplenty, it’s little surprise that the state grew so rapidly
The twentieth century Californian economy
Not immune to the effects of the Great Depression, in the first half of the 20th century California became the epicenter of one particular industry - the movies. Although nearly all of the work was kept within the small suburb of Los Angeles called Hollywood, the revenues it generates continue to have a profound effect on the Californian economy. The second world war saw the first heavy industries opening up in California with shipyards and airplane manufacturers establishing companies that to this day still make important contributions to the Californian economy. Leaving aside the quasi hippy industries and the legalization of marijuana the 60s and 70s, apart from a couple of little companies like Apple and Intel, were more concerned with politics and politicking than the economy per se. However, as the century ended that new business was taking center stage in the Californian economy - micro-electronics and Silicon Valley was born.
The Californian economy today
Californians must have wondered what on earth was going on with the Californian economy in 2001 when state energy supplies were poorly managed resulting in regular power black-outs! Although the recessions at the start of the millennium and the 2008-09 one did see the Californian economy suffer, by and large most companies are now well on the way to recovery. The median family income for the state is around $58,000/year, with average male earnings at $42,000/year. Where are you likely to make that sort of money, well of course that to some extent depends on your skills and education; but the majority of people (18%) in the state work in education or health. Other major employing sectors are real estate, trades and utilities, manufacturing and the government. All of the other major businesses and industries are to be found in California but, as an example, less than 2% of the population is now engaged in farming. However, as 12% of the population is dependant on employment from the state the Californian, it is vital that the state economy is sorted out. With a current unemployment level slightly above the national average, redundancies from the state government could have a bad effect on the overall Californian economy.