Today, our state is officially on track for the longest economic expansion on record – 113 months of job growth. While this is something we should be proud of, the story behind this number is more complex. Our fundamental goal, from an economic standpoint, is to make the California economy work for everyone. Currently, prosperity is not shared by all Californians.
The last time California had 113 months of economic expansion was in the late 1960s and I grew up in Turlock. Back then, if you were in the Central Valley, you had the same economic prospects for the future whether you grew up in Turlock or Menlo Park. This is not the case today. It has been a dramatic diversion in the state in terms of the quality of economic opportunities.
But faced with a challenge, California is leading the way.
Geography shouldn’t limit your chances, and to make sure it truly is California for everyone, the governor’s office launched the Rise Together Regions Initiative. To put money back in the pockets of Californian workers, state budget more than doubles investment in California earned income tax credit to $ 1 billion, expanding this vital mobility tool social to include people earning $ 30,000 per year. To address our housing and affordability crisis, Governor Newsom called for historic investments – $ 1.75 billion – to speed up new housing production and help cities meet required housing targets. And to meet climate objectives? Gov. Newsom said Monday: “California proves smart climate policies are good for our economy.”
While DC ignores the science and air quality issues of parts of the state and country, California leads the way, creating a major industry out of need and opportunity. About half of zero-emission vehicles in the United States are found in California, and almost all of the major automakers and startups have deep roots in the state. In addition, our economy continues to buzz, surpassing the national average, even as we reduce carbon emissions.
It is our high standards that raise the bar for what future generations expect of us. And it is these high standards that have brought us here today.
In 113 months …
- We emerged from the biggest hole in our history and became the fifth largest economy in the world with a GDP of $ 3 trillion. And to make sure our economy is not only strong but also resilient, Governor Newsom has set aside $ 16.5 billion in a rainy day reserve.
- California created nearly 3.3 million jobs – the most in the country – and accounted for 15% of job growth nationwide.
- When you combine job growth and salary increases, you find that California employers have increased paychecks at an annual rate of $ 416 billion over eight years. This windfall was greater than that of the next two states – Texas and New York – combined.
- California has seen new businesses start up at a faster rate than any other state; In addition, we have easily accessible venture capital funding. In less than a decade, California companies have raised $ 330 billion in venture capital, or 51% of investment nationwide, compared to 47% of national take in the 2000s.
One hundred and thirteen months of economic growth. A California fact last seen in the late 1960s. Not a decade later, everyone was saying California’s best days were behind it. But here we are, GDP growth of 3.8% over the past five years, surpassing Texas, Tennessee and Florida. A state with historic surpluses and historically low unemployment.
Today we celebrate a number, but it’s the story behind that number that matters. We have extraordinarily high ambitions, but our fundamental goal is to create a level playing field because anyone, no matter where they live in this state, should be able to go from here to there. This is what future generations expect of us. Everything else is a race to the bottom.
Lenny Mendonca is Chief Economic and Trade Advisor and Director of the Governor’s Office for Economic and Trade Development.