California’s economic miracle

Matthew Winkler

The doomsayers were wrong about the Golden State, said Matthew Winkler. Last year, headlines abounded “of people leaving the world’s fifth-biggest economy for lower-cost states because of high taxes and too much regulation stifling business.” But recent data suggest otherwise. Since last April, California has added 1.3 million jobs to non-farm payrolls, “equal to the entire workforce of Nevada.” If anything, Covid-19 accelerated California’s productivity; California’s public companies take in almost two-thirds more revenue per employee than they did a decade ago. “Pundits have long insisted California policies are bad for business.” But the state’s gross domestic

product has “increased 21 percent during the past five years.” That’s well ahead of Texas; if you look at just manufacturing jobs, it’s the same story. California’s smaller corporations are doing just fine, too. “The 373 California-based companies in the Russell 2000 Index, which includes small-cap companies across the U.S., appreciated 39 percent the past two years and 85 percent since 2016,” beating both benchmarks. Thanks to the surging economy and capital gains taxes, California’s government expects to post a $75 billion operating surplus—which is funding the largest state tax rebate in American history. Too bad for those who believed the pundits and left.