III.

Economic Activities

Since the earliest settlement of the region by the Spanish in the 18th century, agriculture has been vital to the California economy. The gold rush of the mid-19th century was followed by the intensive exploitation of petroleum and other minerals. As the population grew, fishing and forestry became important, and by the late 19th century light manufacturing industries had developed. Industrial diversification proceeded swiftly in the early 20th century. The motion-picture, radio, and, later, television industries added other dimensions to the economy. World War II (1939-1945) accelerated industrial development and spawned the state’s large aerospace industry. Government and educational services expanded rapidly after the war, as did tourism and other service industries. The economy suffered a recession in the early 1990s, fueled by cutbacks in aerospace and other military-related industries, coupled with a slowdown in housing construction. By the late 1990s, however, California’s economy had rebounded, showing sustained growth in both jobs and production.

California had a work force of 17,902,000 people in 2006. Of those the largest share, 39 percent, worked in the diverse services sector, doing jobs such as restaurant work or computer programming. Another 19 percent worked in wholesale or retail trade; 15 percent in federal, state, or local government, including those in the military; 12 percent in manufacturing; 31 percent in finance, insurance, or real estate; 5 percent in construction; 5 percent in transportation or public utilities; 3 percent in farming (including agricultural services), forestry, or fishing; and just 0.2 percent in mining. In 2005, 17 percent of California’s workers belonged to a labor union.

A.

Agriculture

By a number of different measures, California has long been the nation’s leading agricultural state. In 1997 California led all other states with farm sales of $23 billion. Several of the state’s commodities have annual sales of more than $1 billion, including milk and cream, grapes, vegetables and melons, cattle and calves, nursery products, poultry and eggs, and cotton lint and seed. California produces a greater variety of crops, and has higher yields of those crops from each unit of land planted, than any other state.

California’s farms are among the most productive in the world. For example, the state’s highly automated rice industry generates a yield three times greater than the labor-intensive rice paddies of Asia. The high production is based in large part on the fertile soils and long growing season of the region, the widespread practice of advanced farming techniques, and the availability of water. Most of the farmlands lie in the dry Central Valley and southern areas of the state, where farmers are dependent on irrigation projects, such as the Central Valley Project, for water. With the exception of only a few commodities, such as barley, most of the state’s numerous crops are grown on irrigated lands. Livestock ranching is the main activity on the nonirrigated farmlands. However, livestock are also frequently raised on irrigated pastures. California leads all other states in the total amount of land irrigated. Although many crops are grown in each of the farming areas of the state, within each area the individual farms tend to specialize in certain products.

There were 76,500 farms in California in 2005. Some 59 percent of them had annual income of more than $10,000. Many of the rest were sidelines for operators who held other jobs. Farmland occupied 10.7 million hectares (26.4 million acres), of which 38 percent was cropland. Most of the rest was used as range for the grazing of livestock. Some 75 percent of California’s cropland was under irrigation.

A.1.

Crops

A great variety of crops, especially fruits and vegetables, are grown in California. The state accounts for nearly the entire U.S. production of walnuts, almonds, nectarines, olives, dates, figs, pomegranates, and persimmons. It leads the nation in the production of vegetables, including lettuce, tomatoes, broccoli, celery, cauliflower, carrots, lima beans, and spinach, and also of apricots, grapes, lemons, strawberries, plums and prunes, peaches, cantaloupes, avocados, and honeydew melons. It is the nation’s leading producer of hay and the second leading producer of cotton. California is also the second ranking state in the production of rice, oranges, tangerines, grapefruit, apples, pears, sweet corn, and asparagus. Nearly every crop grown in the United States is represented in California fields.

Crops account for 73 percent of the state’s annual farm income, with the rest coming from livestock and animal products. Vegetables are grown primarily in the Central, Imperial, and Salinas valleys. Cotton is raised primarily in the southern San Joaquin Valley. Citrus fruit production is centered in southern California and the southeastern San Joaquin Valley. Grapes, peaches, potatoes, barley, and figs are raised chiefly in the San Joaquin Valley; and rice, sugar beets, and pears are raised mainly in the Sacramento Valley.

A.2.

Livestock

California leads the nation in egg and milk production and ranks high in the marketing of cattle and calves, chickens, turkeys, and sheep and lambs. Beef cattle and sheep are raised primarily in the hillier parts of the Central Valley and the adjacent foothills. In addition, cattle ranching is the most important activity in some of the dry, sparsely populated basins east of the Sierra Nevada. Dairy cattle and poultry are raised in the Central Valley and near the major urban centers.

B.

Fisheries

In the 1940s and early 1950s, California’s annual fishing catch was greater in value and volume than that of any other state. In the 1960s, however, California fell behind Alaska in output; in 2004 the value of its fish catch, at $140 million, ranked high in the nation. Among the most important commercial fish caught in Californian waters are species of tuna, salmon, halibut, mackerel, and anchovy. Shellfish taken in coastal waters include crab, shrimp, and abalone.

C.

Forestry

California usually ranks third among the states, after Oregon and Washington, in output of timber and lumber. Lumbering is the chief economic activity in the Sierra Nevada and in northwestern California. Redwood and Douglas fir are the most important commercial species in the northwest. Ponderosa or yellow pine is the principal commercial species in the Sierra Nevada. About two-fifths of the forestland is classified as commercial forest; more than half of the commercial forest is managed by the United States Forest Service.

D.

Mining

California is the fourth-ranking state in annual mineral output by value, after Texas, Louisiana, and Alaska. Crude oil and natural gas account for two-thirds of the value of California’s mineral production. California ranks third in the nation in the production of oil, behind Texas and Louisiana. The oil fields of Kern County and the Los Angeles area are the most important. Oil is also produced in offshore waters. Natural gas wells are found in the Sacramento Valley and in all the oil-producing areas. Yet reserves of natural gas are seriously depleted, so much so that the state imports most of the natural gas it consumes each year. The bulk of natural gas piped into California originates in the province of Alberta, Canada, and the states of New Mexico and Texas.

California leads all other states in the production of sand and gravel for construction, Portland cement, diatomite, asbestos, and sodium sulfate. In addition, much of the world’s supply of boron minerals comes from Searles Lake and other areas in California’s Mojave Desert. The state is also the nation’s second largest producer of feldspar, soda ash, titanium, and magnesium compounds, and the third largest producer of gold, perlite, and pumice. Other minerals found in California include stone, lime, clays, gypsum, talc, silver, gemstones, salt, copper, molybdenum, peat, and various high grade iron ores. In spite of the great variety of minerals found in the state, large quantities must be imported to meet the needs of California, which is the nation’s leading consumer of minerals.

E.

Manufacturing

California leads all states in income generated by industrial activity and in industrial employment. In 1996 California’s manufacturing sector contributed ten percent of the nation’s manufacturing total, and some 2.0 million people were engaged in manufacturing in the state.

California’s leading industry, in terms of the value added by manufacturing, is electronic and electrical equipment manufacturing. Value added by manufacturing is the difference between the price of raw materials used in a product and the price it commands as a finished item. The largest employers were firms making semiconductors, radios and televisions, printed circuit boards, and telephones, although the diverse industrial sector contained manufactures ranging from the makers of electron tubes to household lighting fixtures.

Ranking high in California’s economy is the manufacture of industrial machinery, principally computers and related equipment but including the making of pumps, engines, turbines, and machines for the service industry. Many computer companies are located in what is known as Silicon Valley, in the San Jose-Palo Alto area. Food processing, which includes the drying, freezing, and packaging of fruit, vegetables, fish, and livestock products, is another of the state’s biggest industries. Included in this sector is the California wine industry, which accounts for four-fifths of the nation’s annual wine production. The manufacture of instruments contributes significantly to California’s industrial economy, led by firms making such things as surgical and medical instruments, appliances, and supplies, while also including those making electric meters, analytical tools used in research and by other industries, and photographic equipment.

The manufacture of transportation equipment has long been important to California’s economy. By far the largest employers in the sector are aeronautics firms, making civilian and military aircraft, guided missiles, and vehicles used in space exploration. Other activities include the building and repairing of ships and the manufacture and assembly of automobiles.

Manufacturing is concentrated in southern California and around San Francisco Bay. The aircraft industry is centered in the Los Angeles and San Diego areas and is based in large part on federal military expenditures. Automobile assembly plants are located near Los Angeles in the San Fernando Valley, and in Fremont. There are shipbuilding yards at San Diego. In Sacramento, Stockton, Fresno, Bakersfield, and other Central Valley cities, foodstuffs are manufactured. In the San Francisco area, manufacturing is highly diversified and includes food processing, automobile assembly, shipbuilding, chemical production, printing and publishing, and the manufacture of machinery. The computer and electronics industry is centered in Silicon Valley, which is lesser known as, but officially, the Santa Clara Valley.

F.

Electricity

Hydroelectric facilities provided 20 percent of the electricity generated in California in 2005. Thermal power plants burning fossil fuels provided another 50 percent, while 18 percent of California’s electricity generation comes from four nuclear reactors, two at Diablo Canyon west of San Luis Obispo and two at San Onofre southeast of San Clemente. The city of Los Angeles imports power from a nuclear plant at Palo Verde in Arizona. Southern California also imports electricity generated at coal-fired thermal plants in Arizona, Nevada, and Utah. Renewable energy sources such as wind-power generators and geothermal power plants, which use heat from the Earth to make steam, accounted for 12 percent of electricity production in 2005.

G.

Entertainment Industry

Southern California, with its year-round sunshine, variety of landscape, and excellent technical facilities, has dominated the U.S. motion-picture industry since the 1920s. The name Hollywood has long been synonymous with the world of motion pictures. Since the late 1940s the Los Angeles area has also become a major center of the U.S. television industry.

H.

Tourist Industry

California plays host to millions of visitors each year, and many Californians are employed in providing for these tourists. Tourists are drawn to the state’s magnificent scenery and recreational facilities and to such cities as Los Angeles, San Diego, and San Francisco, which are also popular convention centers. Visitors to California spend $68 billion on lodgings, rental cars, and other traveling needs each year, by far the largest sum for any state.

I.

Transportation

Trucks, buses, and automobiles play a major role in the economic and social life of California. Automobiles are the most important means of passenger transportation. There are more automobiles in California than any other state—nearly one car for every two people.

I.1.

Highways

Beginning in the late 1940s the state embarked on freeway construction, and complicated, multi-laned freeways are one of California’s more indelible images. But dependence on the freeways has given the state’s metropolitan areas some of the worst traffic congestion in the nation. By 2004 there were 273,252 km (169,791 mi) of highways in California, including 3,956 km (2,458 mi) of the federal interstate highways.

I.2.

Railroads

Several major railroads link the cities of California with urban centers in other states to the east. The state was served by 9,328 km (5,796 mi) of railroad track in 2004. The National Railroad Passenger Corporation (Amtrak) also serves the state, and more passengers ride trains in California than any other state except New York. Commuter rail systems also provide transportation for people in the San Francisco and Los Angeles metropolitan regions.

I.3.

Airports

There is widespread use of commercial and private airplanes throughout California. The state ranks first among the states in the number of registered civil aircraft and third, behind Texas and Illinois, in the number of airports and airfields, having 37 in 2007. Los Angeles, San Francisco, and San Diego are served by some of the busiest airports in the country.

I.4.

Ports and Inland Waterways

The two principal port areas in California are the combined ports of Los Angeles and Long Beach and the ports in the San Francisco Bay area. The major ports in the bay area are San Francisco, Oakland, Alameda, Richmond, and Redwood City. Other seaports in California include San Diego, which is primarily a naval base, and Crescent City and Eureka, in northern California. The lower Sacramento and San Joaquin rivers are the only major inland waterways. The farm products they used to carry to San Francisco Bay, however, are now transported mainly by truck. Nevertheless, ship and barge canals have been built into the Central Valley cities of Stockton and Sacramento. These inland seaports mainly serve California’s farm and forest products industries, handling the shipment of everything from rice to lumber.

J.

Trade

California leads the nation in retail and wholesale trade. Los Angeles is one of the three largest United States trade centers in value and volume. Other Californian trade centers are San Francisco, which serves a very large area, San Diego, Sacramento, Fresno, San Jose, and Stockton. In addition, Californian ports are engaged in an extensive overseas trade.