During the first half of the twentieth century the California’s economy produced more wealth at a more rapidly rate than ever before in the history of mankind.
Less than 10 years ago, California’s economy had collapsed so completely that most economic forecasters predicted that the state would lag the nation’s economy for at least the first decade of the twenty-first century. When Gov. Pete Wilson took office in January 1991, the state budget was projected to be $7 billion in the red, with a job loss of 40,000 projected for the following six months. By May, 300,000 workers had lost their jobs, and the state budget deficit had become a $14 billion abyss. Wilson had no choice but to raise taxes by $7 billion.
The unexpected and speedy expansion of California’s economic part after 1848 is a enthralling but mainly difficult to understand story. Determined by the exceptional occasion of instant statehood and the succeeding requirement to rapidly introduce a wide range of civic actions, governmental expansion played a main role in the revolution of California from dominated place and uncontrolled border into a practicable unit that could take its position along the other states of the Union. But how influential was that responsibility in the building of California, as we know it? Though the communal, literary, and economic consequences of California’s first thirty years as a state have been cared expansively in chronological writing, no equivalent body of work has yet surfaced that systematically investigates into the public ground. The state sesquicentennial centenary encouraged the groundwork of numerous excellent new works on the Gold Rush and its result, but the surfacing of the state and its public establishments has been overlooked or, at best, affronted.
During the 20th century the established Californian economy has undergone many troubles and alterations. Two world wars and constrained wars in Vietnam and Korea have shaped distinct changes. A relentless, but diminutive depression of 1920-21 leaded the shocking Great Depression of 1929-1933, a depression which turned into international in extent.
Three economic trends came together to devastate the California economy in the early 1990s: the end of the Cold War, the recession in Japan, and the cyclical collapse of the real estate market that was aggravated by the savings and loan crisis. These three factors contributed to the nationwide recession of the early 1990s, but nowhere were they felt more than California.
California had been a favorite place for Japanese investment in the 1980s. But with the collapse of Japan’s economy, Japanese investment in California fell from $7.4 billion in 1990 to just $620 million in 1992.
Equally, through the same phase, the Golden State also involved commercial and industrial development of excessive charge. The implementation of a Master Plan for Higher Education in 1960 permitted the expansion of a extremely competent structure of public learning in the Community Colleges and the University of California and California State University structures; by generating knowledgeable personnel, it fascinated venture, mainly in areas linked to high technology. By 1980, California became documented as the world’s eighth-largest market. Millions of employees were wanted to increase the development. The high populace of the era originated great troubles with urban collapse, traffic, pollution, and, to a minor degree, crime.
Urban collapse formed a repercussion in countless urban areas, with the local governments restraining expansion past certain borders, dropping lot sizes for constructing homes, and so on. Open Space Districts were formed in numerous parts of the state particularly to attain, administer, and conserve unripe land. For instance, in the San Francisco Bay Area, the open space districts have produced an almost neighboring range of eternally emergent land operating from side to side the coastal range and hills neighboring the Bay’s urban valleys, facilitating the conception of gigantic natural parks and predicting a mountaineering track that will finally orbit the Bay in a continuous circle. (Wood)
Opening in the 1950s, high technology corporations in Northern California began a stunning augmentation that sustained through the end of the century. The chief products included personal computers, video games, and networking systems. The majority of these corporations established along a highway extending from Palo Alto to San Jose, particularly including Santa Clara and Sunnyvale, California, all in the Santa Clara Valley, the so-called “Silicon Valley,” named after the matter used to manufacture the incorporated circuits of the era. This era peaked in 2000, by which time order for expert technical experts had become so elevated that the high-tech business had difficulty satisfying all of its sites and consequently pressed for augmented visa quotas so that they could employ from abroad. When the “Dot-Com bubble” exploded in 2001, jobs faded suddenly and, for the record over the next two years, added people left of the area than moved in. This rather paralleled the fall down of the aerospace industry in Southern California some twenty years earlier.
The Golden State, by itself the world’s eighth-largest economy, has worn its worst depression since the Great Depression comparatively by reinventing itself.
In a stir that may hold lessons for other states and nations, California has moved away from a defense-heavy manufacturing base to a more capitalist high-tech market of tomorrow. The new spotlight has helped the state come out from seven years of natural and social tragedies -fires, earthquakes, riots – with one foot determinedly fixed in the 21st century.
Underlying its outstanding turnaround of fortune, however, loiter numerous questions: Will California be able to manage with the striking rush in population being determined in part by its healthy economy? Will the state’s enhanced economic viewpoint aid conquer deep-rooted social troubles -counting a rising underclass?
And there are many additional cautions in the California return, economists say. Amid them is the truth that the expert labor essential to staff the new ultra-modern firms is incomplete, as is space to house them. Additionally, labor turbulence is ripe for union activity, which may finally drive potential firms away, and some see a deteriorating in Republican Party fortunes, which could harm recent pro-business governmental gains.
“It’s time now for Californians to prepare to meet the tests of population growth a soaring economy will bring,” says Steve Levy, director of the Center for the Continuing Study of the California Economy. “There is not a chief growth industry in the world that California does not have a strong position in for the next two decades.” (Wood)
California has been desired for its warm weather as well as its economic strength. Other states can’t do much about California’s sun, but they can try to imitate its business climate.
Drawing high-technology companies has topped the list of every state’s economic development strategy for numerous years now, but it is not an easy task. On the outside, if you had heard only of the abstract conditions of Silicon Valley, such as sky-high housing prices, a low commercial vacancy rate, high taxes, and a tight labor market, you might conclude that such a place would be a poor location for a new business start-up. The ironic lesson of the high-tech boom in California is that the usual business climate issues–taxes, regulation, and other costs of doing business–can be secondary in the information economy.
Wood, Daniel B., California as a 21st-century economy. Christian Science Monitor, 08827729, Vol. 89, Issue 193, 1997