The Golden State (population 39 million people), just supplanted Japan (123 million) as the fourth-largest economy.
Gross domestic product surged 40% to more than $4 trillion, accounting for more than 14% of US output, after Newsom took office in January 2019. China’s, the world’s second-largest economy, expanded 32% and No. 3 Germany increased 16%, according to data compiled by Bloomberg.
The US is an also-ran competing with California’s prosperity, based on indexes compiled by the Federal Reserve Bank of Philadelphia that take state level nonfarm payroll employment, average hours worked in manufacturing by production employees, the unemployment rate and wage and salary disbursements that are then deflated by the consumer price index.
Although “some of California’s most prominent venture capitalists have a proclivity for slamming their state, arguing that fiscal mismanagement and high taxes will cause startups to form elsewhere,” the opposite is happening, according to Axios. “California startups raised a whopping 62% of all U.S. venture capital dollars in 2025,‘’ Axios notes, citing the PitchBook-NVCA Venture Monitor, more than either 2024 (54.2%) or 2023 (46.9%), as well as the decade-earlier mark of 47.2%.
High taxes make a state great.