Some Perspective on the Size of the U.S. Economy

Maps like this are always fun:

This shows U.S. states relabeled with the names of countries with comparably sized economies. Do note that these “renaming maps” are not unique: a different designer could could match up each state with a handful of similarly sized countries, and make their map a little different than the last one. For example, Utah is variously matched up with not just Qater, but Algeria and Kazakhstan as well.

It’s commonplace for people to say, if California was a country it would be one of the biggest. This is true, but most U.S. states are the size of larger countries. In fact, the smallest U.S. state in terms of GSP, Vermont, is comparable in size to the economy of Latvia … which is in the top half of countries.

I copied this map from Carpe Diem, which continues with:

1. America’s largest state economy is California, which produced nearly $3 trillion of economic output in 2018, more than the United Kingdom’s GDP last year of $2.8 trillion. Consider this: California has a labor force of 19.6 million compared to the labor force in the UK of 34 million (World Bank data here). Amazingly, it required a labor force 75% larger (and 14.5 million more people) in the UK to produce the same economic output last year as California! That’s a testament to the superior, world-class productivity of the American worker. Further, California as a separate country would have been the 5th largest economy in the world last year, ahead of the UK ($2.81 trillion), Frane ($2.79 trillion) and India ($2.61 trillion).
2. America’s second largest state economy – Texas – produced nearly $1.8 trillion of economic output in 2018, which would have ranked the Lone Star State as the world’s 10th largest economy last year. GDP in Texas was slightly higher than Canada’s GDP last year of $1.73 trillion. However, to produce about the same amount of economic output as Texas required a labor force in Canada (20.1 million) that was nearly 50% larger than the labor force in the state of Texas (13.9 million). That is, it required a labor force of 6.2 million more workers in Canada to produce roughly the same output as Texas last year. Another example of the world-class productivity of the American workforce.
3. America’s third largest state economy – New York with a GDP in 2018 of $1.68 trillion – produced slightly more economic output last year than South Korea ($1.65 trillion). As a separate country, New York would have ranked as the world’s 11th largest economy last year, ahead of No. 12 South Korea, No. 13 Russia ($1.57 trillion) and No. 14 Spain ($1.43 trillion). Amazingly, it required a labor force in South Korea of 28 million that was nearly three times larger than New York’s (9.7 million) to produce roughly the same amount of economic output last year! More evidence of the world-class productivity of American workers.
4. Other comparisons: Florida (about $1 trillion) produced almost the same amount of GDP in 2018 as Mexico ($1.19  trillion), even though Florida’s labor force of 10.2 million less than 20% of the size of Mexico’s workforce of 59 million.

All the bold emphasis there is in the original. The point is general though: all U.S. states can be matched up with comparably sized countries, but in each case the U.S. state is producing a comparable amount with a smaller population.

And not by a little: the UK and Canada are regarded as rich, developed countries, yet California is matching the UK, and Texas is matching Canada with 60% of the population. A little bit of that is due to Americans working more hours, but not much (7% more than the UK, and 5% more than Canada). That means that most of the difference is due to productivity of labor, which in turn means Americans are working with more capital and better technology … and more than likely … both.

That’s actually a good example of geographic correlation. Americans are more productive than others in both California, and Texas (and other states too) presumably because our capital and our technology is geographically correlated.