Chart #1: Summary of CA Real GDP Growth for California Metro Areas 2002-2014 vs. 2008-2014
The conventional wisdom holds that the State of California is an exception with regard to economic growth which routinely exceeds the nation.
But a new original analysis by the Kersten Institute of raw U.S. Department of Commerce data shows that California's long-term economic growth is roughly equal to the average of United States metro areas.
And when you exclude the Bay Area, California's economic growth, as measured by real gross domestic product (GDP), actually averages only 0.3% for 2008-14--equal to only 1/3 of the 0.9% growth for all metro areas in the United States over 2008-14 period. (Note: real means inflation adjusted dollars, 2009 base year)
According to U.S. Department of Commerce data, in economic terms it is really the Bay Area that is the exception, not California. The two Bay Area metro areas represent just over 1/4 of the state's economy, but more than half of the state's economic growth, even more depending on the time period. (the two Bay Area regions for this analysis are San Francisco--Oakland--Hayward and San Jose--Sunnyvale--Santa Clara)
Specifically, the United States average growth for all metro areas was 1.7% for the 2002-14 period, and only 0.9% for the 2008-14 period.
For all California metro areas combined, economic growth was very similar to the nation for both 2002-14 and 2008-14. All California metro areas combined recorded a 2% average annual economic growth rate for 2002-14, and 0.9% for 2008-14.
But if you exclude the two Bay Area metro areas from the analysis the combined economic growth for all State of California metro areas declines significantly for the 2008-14 period in particular--to only 0.3% for 2008-14 for all California metro areas, excluding the two Bay Area metro areas.
As part of the analysis, data was produced for all 26 California metro areas for which data was available and provided by the Bureau of Economic Analysis, a division of the United States Department of Commerce.
This data was processed and analyzed to produced annual growth rates for 2002-14, and then summary statistics were run for three time periods, 2002-14, 2002-2007, and 2008-2014.
For a more complete examination of the data please see the charts below and the attached spreadsheet PDF located at the bottom of this column. A screencast is also provided below discussing the data.
Only seven of the 26 California metro areas examined, recorded average real GDP growth rates of equal to or in excess of the national average for the 2008-14 period.
More analysis is needed to interpret the results and provide more context. I am currently vetting and discussing the results of this original data analysis with experts who have a demonstrated expertise in economic and fiscal policy.
It must be noted that more updated data is available for both 2015 and 2016, but the type of raw long-term data going back to 2002 has not been produced by the United States Department of Commerce and won't be available at least until this fall. Thus, this represents the most recent and comprehensive analysis of the California data that I have been able to find to date.
This analysis was completed by David Kersten, president of the Kersten Institute, who has a master's degree in public policy from Georgetown University. Kersten also teaches a masters' course on public budgeting at the University of San Francisco.