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This is California, the Golden State and one of the largest economies in the world in its own right.
If California was counted as a sovereign nation it would be the fifth-largest in the world by GDP, with a 3.2 trillion dollar gross state product putting it just behind Germany and just ahead of India.
The state has a lot going for it, from the largest movie and technology centers in the world all the way to a surprisingly strong agricultural sector.
All of this has meant that the residents of California are on average doing very well for themselves, and one look around the wealthy enclaves of las Angeles and san Francisco would back this up.
Despite all of this however, the state is going through a period of economic turbulence.
The economic fallout of the coronavirus has hit the state’s economy particularly hard.
Major industries like tourism and media creation have ground to a complete halt having widespread knock-on implications throughout the economy hitting smaller vendors who were once reliant on these industries.
This bump in the road however was by no means the total undoing of the state.
California’s metrics before 2020 looked very strong, with low unemployment, solid growth, and booming industries, but there were still cracks forming.
The state is home to the largest population in the US but the industries that were truly driving wealth creation are famously bad at actually employing people.
This had led to a sharp increase in social issues like homelessness and crime.
All of these problems that were bubbling away under the surface have now been massively accelerated, so much so that many economists have predicted that the sun might be setting on the setting on the sunshine state.
It may sound like absurdist alarmism but it is a reality that shouldn’t be dismissed.
Remember in previous decades there was another economic region in the US riding high on the new growth industry of the age. but these days Detroit is not exactly seen as the bastion of prosperity it once was.
So could the same grim reality be in store for California? Well to answer this we need to look at a few key areas.
What made the state so prosperous before the 2020 downturn?
What were the underlying issues impacting the economy?
How will these issues be impacted by this decline?
#California #SiliconValley #Economics
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