Why this matters: The economy of California is the largest in the United States, boasting a $2.9 trillion gross state product as of 2017. As a sovereign nation, California would rank as the world’s fifth largest economy, ahead of the United Kingdom but behind Germany.
The sectors that drive most of the economic output for the Golden State are technology and entertainment. Other economic drivers are agriculture, science, trade, media, and tourism.
Despite the impressive economic output, the state faces challenges as well, and some are warning the next downturn could be especially tough. The New York Times notes that “economic downturns in California are notoriously damaging because of the state’s reliance on high-income taxpayers for revenue. A recession would force the next governor and Legislature to consider deep cuts in spending.”
There is also a massive affordable housing issue in the state, especially in cities like Los Angeles and San Francisco. Affordable housing shortage threatens to cause a labor shortage, because workers cannot find homes near their jobs.
Final Thought Bubble: It’s tough for countries like Canada to criticize the U.S. when they’re population doesn’t even eclipse one of the largest states. Neither the U.S., Canada, or California are perfect, final, end-all-be-all solutions for policy and domain. It’s good to contrast and compare, but making sure what’s being compared is apples-to-apples is always important.