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Statewide media covers Milken manufacturing report

Posted by Gino DiCaro, Vice President, Communications   on June 26, 10:10 am

Traditional articles
» LA Times:
Losses of California factory jobs blamed on regulation
» San Francisco Chronicle:
California manufacturing jobs cross state lines
» Orange County Register editorial:
Headed for the Exits
» Contra Costa Times:
Report shows decline in California manufacturing
» Sac, San Jose, Central Valley, LA Business Journals:
California losing manufacturing jobs faster than the nation
» EGP News:
Study shows manufacturing decline hurts state's economy

Blogs
» Reuters:
Made green in California (TM)?
» Sacramento Bee:
Milken study charts California's manufacturing decline
» So Cal Tech:
California losing manufacturing, high-tech jobs
» American Machinist:
California regulation, taxes blamed for lost jobs
» Fox and Hounds Daily:
Manufacturing STILL matters


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Manufacturing STILL Matters in California

Posted by Gino DiCaro, Vice President, Communications   on June 24, 8:22 am

This week the Milken Institute released a study that shows California has long neglected a segment of its economy that is critical to economic growth.  Let's face it, California's business climate problems are as big and bold as its current budget morass.  We must seek out, promote and value our champion industries of economic growth.   According to the report, "California is the only one among its peers to lack a comprehensive long-term economic strategy."

The study takes an in-depth look at California's manufacturing decline compared to competitive "peer" states, simulates what the state would look like if it had maintained 2000 levels of manufacturing, explains the massive economic benefits and ripple effects from high and even low wage manufacturing, assesses the challenges of manufacturing in California and makes some recommendations to make California manufacturing more competitive.

Here's a key breakdown of the 94 page report:

• California's economy was built on manufacturing
• California's manufacturing decline is a virtual "canary in a coal mine" of things to come in our overall economy
• California is NOT living up to its potential

Among the many key findings:

The state would have seen $54 billion more in output if we would have maintained the same manufacturing share of our total workers that we had in 2000 (12% share).




California is not winning.  Manufacturing's share of GSP is far outpaced by competitor states, according to the report.




Lower wage sectors are growing while high wage manufacturing continues its precipitous decline.





Do the math on the statistics and the state's revenue situation could have looked so much better.

As the State Legislature debates a budget today, the state's focus on one of the largest wealth creators for our workers and our state government should at least be widely agreed upon as a place to start for a long-term strategy for economic recovery.

Policymakers and media often say (and assume), "it's California, we'll be fine."  CMTA president Jack Stewart's quote during a report discussion yesterday provides a perfect retort, "California has the capacity to innovate and make things but it is not at all living up to its potential."  Pamela Kan, President of 53-employee Bishop-Wisecarver in Contra Costa County agreed, "This report is a wake up call to California's policymakers that we need a focused manufacturing strategy in the state to retain and grow the nation's most coveted producers."

In other words, manufacturing still matters but California's unintended push to make it matter less is going to hurt if we don't turn it around and leverage California’s most precious and wealth creating asset -- the ability and capacity to make things.


Downloads:
CMTA Key Findings of The Milken Report: Manufacturing STILL Matters (2 pages)
Milken Institute Report: Manufacturing 2.0 -- A More Prosperous California (94 pages)
 



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Promote -- don't revoke -- economic recovery policies set for 2011

Posted by Gino DiCaro, Vice President, Communications   on June 10, 10:40 am

Senate Pro Tem Darrell Steinberg mentions eliminating "corporate tax breaks approved in past budget negotiations" in today's Sacramento Bee article, Senate Dems push to raid budget reserve. With that statement it can be concluded that the Net Operating Loss (NOL) carry-back and the elective Single Sales Apportionment Factor are being debated for elimination -- both will help drive California's economy (and state revenue) with high wage job growth and retention in the future.

Those "breaks" were intended to remove barriers to California’s economic growth and neutralize a portion of the more than $9 billion in tax hikes and revenue accelerations on the business community. Certainty and predictability are primary tipping points for businesses looking to grow, stay or site in a location. Revoking economic stimulus policies 6 months after they were passed sets a dangerous precedent and sends signals to high wage employers that the state can't be trusted.

The NOL and the single sales factor provisions do not apply until January of 2011 and their elimination would do nothing to infuse cash to the 2009-10 budget.

Watch how the Legislature treats and delineates these important job growth provisions in the budget debate.



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California, take a breath

Posted by Gino DiCaro, Vice President, Communications   on June 4, 4:30 pm

California is broke.  The poor are worried about losing benefits. California companies don’t want to pay more taxes. Someone has to lose for the other to win, right?

Wrong.

The media likes a good fight, and the bell has rung in Sacramento for a heavyweight bout. In this corner, greedy businesses get tax breaks and in that corner the poorest and most vulnerable citizens are denied healthcare.  But the question is: Will the policy choices at the end of this cage match make us a better and more successful state?

Last night I heard a father tell his screaming, red-faced child: "Take a breath, buddy, take a breath."   We have become that child.  Let’s take a breath.

Policymakers have daunting decisions to make. We need to be guided by deep analysis to make strategic value-driven decisions. We don’t need the media to perpetuate the notion that this should or will be decided simply by who has the strongest lobby in Sacramento.  

Sadly, this notion was perpetuated in a San Jose Mercury non-editorial piece this week that in so many words, and with limited retort, stated that the poor will lose because of back room deals that gave business $2.5 billion dollars.

Readers and voters should be afforded more than this.  Let's face it, after the recent May 19 "elective yawp" on taxes and the budget, the voters have finally become very real pressure points for our policymakers to make decisions.  So let's give them the entire picture.


Here are some point/counterpoints to consider for the article:

Mercury: "Corporate tax giveaways from dead-of-night budget agreements in September and February will cost the state as much as $2.5 billion in revenues at a time when lawmakers are contemplating eliminating programs for the poor, a budget analyst said Wednesday."

MPowered: That budget analyst is a well respected and ubiquitous lobbyist for the poor in the State Capitol but that statement is very inflammatory and does nothing to solve any problems.   A further analysis would indicate that California has one of the highest corporate tax rates in the country.   Businesses were hit with $9 billion in tax increases in the last two budget deals -- one increase was a first-in-the-country corporate tax penalty policy that was completed in 24 hours in the fall budget and now has removed $2.7 billion dollars from the economy in the form of overpayments.


SJ Mercury: "The problem with dark-of-the-night deals is that you never get a chance to get a debate over value choices," she said.  "These tax breaks represent a reduction of one-third the income taxes paid by California corporations..."

MPowered:  The same lobbyist used "dead-of-the-night" in her first quote and "dark-of-the-night" in her second.   It's like a Martin Scorcese film in here.  Again, the entire quote needs more analysis.  "Value choices" is a spot-on term for the budget tipping point(s).  Solutions will all come down to what we value most.  Programs for the poor are the very obvious part of that equation.  Creating more opportunity for careers and high wage jobs is equally as important.  If we value the high wage employment so desperately needed in California, we need to a certain extent tax policy articles (and a debate) that juxtapose the $9 billion in increases heaped on corporations versus job creating tax policies.  Again, we already have one of the highest tax rates in the country, as well as one of the highest per capita government spending budgets.


SJ Mercury:  "The single sales factor, the memo said, spurs job creation by eliminating the tax penalty for increasing the number of employees on payroll.  A 2005 study contradicted those arguments. The Center on Budget and Policy Priorities, a nonprofit research institute in Washington, D.C., found that while most states have lost manufacturing jobs since 1995, states that went to the single sales tax formula did not fare much better."

MPowered: Most states have lost manufacturing jobs since since 2000 (a common CMTA year of reference) and I'm assuming since 1995, per the article.  As a percentage of gross state product (GSP) though, no competing state has lost as much as California since 2000.  According to a yet-to-be-released report on California manufacturing, the industry's share of the state's GSP has declined 9.8 percent.  Comparatively, Texas manufacturing gained 24 percent of its GSP and Oregon gained 66 percent.  And as stated so many times before in this blog, California has lost 30 percent of its industrial base since December, 2000, more than any other state.


SJ Mercury:  "While the Franchise Tax Board is not authorized to release the names of taxpayers, Ross noted that a handful have aggressively pushed the single sales factor legislation in previous efforts, including Apple, Genentech, Paramount Theaters, Disney, Intel and Warner Brothers.

MPowered: Are we to deduce that a large portion of Californians don't want the jobs these companies bring to California?  Is the fact that we've gained 163,000 government jobs and lost 235,000 private sector jobs since 2001 a good thing?

Let this blog be CMTA's virtual breath going into understandably difficult and engaging times.   We'll do everything we can to temper the conflict that the media is spawning, making a difficult situation worse for our policymakers.   That breath will unveil principles and facts that help our policymakers find ways to grow the economy, employ our workers and, according to the aforementioned lobbyist's website, "improve public policies affecting the economic and social well-being of low- and middle-income Californians."



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Sen. Rod Wright scores one for equal respect for all students' dreams

Posted by Gino DiCaro, Vice President, Communications   on May 26, 3:16 pm

Last Thursday, the California State Senate voted in support of Sen. Wright's SB 381 on an overwhelming and bipartisan vote of 32-2  (2 no's: Simitian and Wiggins -- 5 abstains: Alquist, Cedillo, Oropeza, Romero, Wolk).  Over the weekend, the most emailed article out of the New York Times was a piece, written by Matthew Crawford, on how we have devalued working with our hands. The two items together represent a growing shift back to education reality and the fulfillment of all our students' dreams. 

Crawford summed up how, over time, our country has begun to view our children's success:

"A gifted young person who chooses to become a mechanic rather than to accumulate academic credentials is viewed as eccentric, if not self-destructive. There is a pervasive anxiety among parents that there is only one track to success for their children."

The fact that SB 381 passed so overwhelmingly shows that we might be reaching the tipping point for a more balanced educational system that provides more than the traditional access to a resume of academic credentials, but options for technical skills and careers.

SB 381 calls for curricular balance in school districts that adopt the UC/CSU course admission requirements (known as "a-g") as a high school graduation requirement, by also requiring those districts adopt alternative graduation coursework that includes the core academics currently mandated by the state, along with a series of at least three career technical education classes.

We must not forget also, that this bill is a simple and clear reminder to districts of their legal obligation to maintain curricular equity and balance, as outlined in Education Code Sections 51224 and 51228:

51224. The governing board of any school district maintaining a high school shall prescribe courses of study designed to provide the skills and knowledge required for adult life for pupils attending the schools within its school district. The governing board shall prescribe separate courses of study, including, but not limited to, a course of study designed to prepare prospective pupils for admission to state colleges and universities and a course of study for career technical training.

More 51228

California's manufacturers offer high paying but very technical careers to our workforce.  These jobs play an important role in our society and pay, on average, $20,000 more than service sector wages for our hard working families.  At the very least, students should have the choice of exposure to these skills and this particular pathway.   SB 381 takes a big step toward equality for all students' dreams and, after weeks of internal legislative squabbling, garnered almost unanimous support.  SB 381 now moves to the Assembly. Stay tuned.

Here's some video from the floor debate that's worth your time:

SB 381 Author, Sen. Rod Wright's, closing speech (4:41)


Sen. Mark Wyland on SB 381 (6:31)

Sen. Pro Tem Darrell Steinberg on SB 381 (4:46)

Sen. Bob Dutton, on SB 381 (1:08)


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