Civilizations should be gauged by "the degree
of diversity attained and the degree of unity retained."
About the Twelfth District
By any measure, diversity is a hallmark of the Twelfth Federal Reserve
District. The diverse landscape, whether in terms of geography, growth,
or cultural richness, creates special challenges for the Bank and its
Branches in carrying out its many responsibilities. But the District's
diversity also provides interesting and unique opportunities to innovate,
lead, and contribute while serving the needs of customers and constituents.
The Twelfth District covers an enormous geographical area: approximately
35 percent of the nation's landmass. Its nine statesAlaska, Arizona,
California, Hawaii, Idaho, Nevada, Oregon, Utah, and Washingtonaccount
for close to one-fifth of the nation's population, employment, and personal
income. The District also serves the Pacific Island territories of American
Samoa and Guam, and the Commonwealth of the Northern Mariana Islands.
If the Twelfth District were a separate country, it would rank as the
fourth largest economy in the world.
This simply serves to illustrate that the District plays a vital economic
role; indeed, the District's states contribute to the overall economy
in wide-ranging ways. California is known as the center of high technology,
but the state also produces the most agricultural goods in the U.S.; Washington
leads the nation in aerospace production and exports; and one-sixth of
the country's oil is produced in Alaska.
In addition to the District's sheer size and diversity, its recent economic
performance also distinguishes it from other parts of the country. Over
the past decade, the District's economy and population grew significantly
faster than the rest of the nation;
jobs increased 24 percent for the District, despite its relatively later
recovery from the recession, versus 20 percent for the rest of the U.S.
Finally, the District is rich in its ethnic and cultural diversity.
Over the past five years, the District has increased its nonfarm payroll
employment by 17 percent, above the 11 percent increase recorded for the
rest of the nation.
that period, both Nevada and Arizona experienced sustained economic booms,
with five-year job increases of 31 percent and 24 percent, respectively,
the largest increases in the nation.
More recently, the Twelfth District added payroll jobs at a rate of
approximately 2.9 percent in 2000, twice as fast as the rest of the nation.
As the accompanying chart shows, the District had six of the nation's
ten fastest growing states last year: Nevada, Arizona, Idaho, California,
Utah, and Hawaii.
Strong job growth has contributed to both the Twelfth District's population
growth and its population diversity. During the past decade, the District
population increased 19 percent, while that of the rest of the nation
rose 12 percent.
6 In addition
to natural population growthbirths less deathsthe District
experienced a strong inflow of new residents from overseas. Nevada and
Arizona led the nation in adding new residents in the past decade, with
10-year population growth of 66 percent and 40 percent, respectively.
Rapid population growth in a number of District states has created the
need for additional infrastructure. This robust growth is also a factor
in increasing the demand for a variety of financial services in these
states in recent years.
response to the brisk growth in commerce and financial services, and in
order to continue to provide high quality services to depository institutions,
the Federal Reserve Bank of San Francisco will open a cash services facility
in Phoenix, Arizona, in September 2001.
Expansion Driven by Technology
One key factor in the Twelfth District's expansion over the past decade
has been the surge in high technology-related activities, ranging from
manufacturing and software to venture capital financing for high technology
firms. The District has a larger overall share of jobs, earnings, and
exports from high technology industries than does the rest of the nation;
while the District has 19 percent of all U.S. jobs, it has 30 percent
of the country's high technology manufacturing jobs. California dominates
the nation's venture capital activity, typically the source of funds for
high technology start-up ventures.
While Silicon Valley remains the nation's high technology hub, important
high technology centers are now spread across many of the District's metropolitan
areas, including other parts of the San Francisco Bay Area, Southern California,
Sacramento, Seattle, Portland, Phoenix, Boise, and Salt Lake City.
Located within this hub of much of the nation's high technology activity,
the Federal Reserve Bank of San Francisco utilizes web and other modern
technological developments in its day-to-day operations. In 2000, the
Bank launched various initiatives to add value to a long-existing automated
process: electronic payments.
Exports to East Asia
While half of the Twelfth District's goods exports are from the high
technology sector, aerospace and agriculture also play very important
roles. Not only is the District dependent on these export products in
particular, but as the chart below indicates, it is also heavily dependent
on a range of exports to East Asian markets. Following the turbulence
in the late 1990s, improvement in East Asian economies in 2000 clearly
benefited the District's exports and economy, although some of these economies
slowed late in the year.
In recognition of the importance of the Pacific Basin region
to the District, in 1990 the Bank established the Center for Pacific Basin
Monetary and Economic Studies within the Economic Research Department.
The Center works to promote cooperation among central banks in the Pacific
Basin and to enhance public understanding of economic policy issues in
the region. Also, the Banking Supervision and Regulation Division conducts
an international program that includes supervision of foreign banking
organizations from the Pacific Basin and elsewhere.
The District's population is much more diverse than that of the nation.
Based on 1999 Census Bureau figures and classifications, only one quarter
of the nation's population outside the District was either White Hispanic
, Black, Asian and Pacific Islander, or American Indian and Alaska Native;
in the Twelfth District that figure was 42 percent. Moreover, the District's
diversity is increasing; over the past decade, international immigration
accounted for a much larger share of net population growth in the region
than in the nation.
Relative to the nation as a whole, the Twelfth District has particularly
strong representation by three demographic groups: Asian and Pacific Islander;
White Hispanic; and American Indian and Alaska Native. While the District
accounted for approximately 20 percent of the nation's total population
in 1999, it is home to 51 percent of the nation's Asian and Pacific Islanders,
almost 42 percent of the nation's White Hispanics, and 38 percent of the
nation's combined total of American Indians and Alaska Natives.
The relatively high concentration of American Indians in the Twelfth
District is especially relevant to the Bank's efforts to encourage the
development of financial services to Sovereign Nations.
Serving a Diverse Community
Through outreach programs, the Bank seeks to educate the public about
the Federal Reserve and promotes financial and economic literacy.
The Bank is engaged in numerous activities that respond to the needs
of the District's diverse environment. English poet W. H. Auden said that
civilizations should be gauged by "the degree of diversity attained and
the degree of unity retained." By that measure, the Twelfth District surely