California – The 6th Largest Economy on planet Earth

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Kevin de León, California State Senate leader, drew attention to California’s economic and social achievements in Philadelphia in June 2016 at the Democratic National Convention. He pointed out that state recently established $15 per hour minimum wage. Besides, there are also efforts to keep California´s colleges affordable as well as hundreds of thousands of clean energy jobs. Furthermore, the Democrat gave a statement concerning the size of the state’s economy. He was proud to say that California is the sixth largest economy in the world and that these progressive policies had a significant effect on it.

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In June 2016 Governor´s administration presented figures which show that California´s GDP in 2015 was more than $2.4 trillion which caused the state to come ahead of France and Brazil on the list of largest economies in the world. According to these sources, California came behind the United States in the first place, China, Japan, Germany and the United Kingdom.

State leaders were examining California´s GDP against different countries around the world and had participated in this hypothetical comparison for years. It is necessary to note that California has a larger population than some countries with almost 40 million people, which displays a broad range of industries from technology, through tourism and entertainment, to agriculture and manufacturing.
However, it can be expected that California´s place on the list will vary. For example in 2012 the state was 10th due to financial and housing slump effects. Besides, it is important to state the fact that California is the only state on the list of nations and that the rankings are made using International Monetary Fund data.

According to experts, California’s climb in the economy rankings mirrors its strong economic growth in comparison to the rest of the countries around the world. Besides, they have also claimed that one of the major industry areas of California, Silicon Valley has continued its tech boom, which is important for the overall economy of both California and the United States.

A More Complex Picture

During his speech in June 2016, De León did not include much context and background to his statement of California being the sixth largest economy. But there are certainly many factors and elements responsible for the success.

According to the California Legislative Analyst’s Office, California’s GDP ranking goes down to 11th in the world, in case we add to state´s high cost of living. Many will agree that there are a lot of things missing from the statement that California is the sixth largest economy. For example, things like housing, electricity and gas cost more than the national average, as well as the goods and services.
Even though De León was asked to respond these comments, his spokesman did not offer one.

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We understand that economy of California is strong because of the major companies situated there. Four out of 10 major U.S. companies is from California. Besides, the great success on the fields of technology, entertainment, tourism, manufacturing, and agriculture all contribute to the economy of both country and the state. However, one thing was excluded from this equation – extremely high cost of living. It should not be neglected in any case since we have seen that the GDP ranking drops if we include the price of living in California.

The gap between the rich and the poor is evident. Even with such strong economy and high GDP, California still has poverty, and unemployment is a big factor as well. Therefore, we can conclude that California´s sixth place it is not a mutual effort at all.

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