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California trailing industrial states in recent manufacturing job growth

Posted by Gino DiCaro, VP, Communications on June 5, 2012

Since 2010 California has been stagnant in critical manufacturing job growth while other industrial states have found ways to grow the sector, which always translates to high paying middle class work, new government revenues and economic upswings in the rest of the economy. (Credit caveat: These numbers were researched by CMTA President Jack Stewart. He never stops.)





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Manufacturing growth: CA and Los Angeles lagging far behind the U.S.

Posted by Gino DiCaro, VP, Communications on May 22, 2012

CMTA looked at the growing lag of manufacturing growth in California after the California Labor Market Information Department's numbers last week showed a loss of 4,100 California manufacturing jobs in April. You'll see in the chart below that, for the past two years, the U.S. has attracted 4.3 percent growth in the critical sector and outpaced a stagnant California.   The largest manufacturing county (MSA), Los Angeles, actually suffered a 3.7 percent loss.

 





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Two new national surveys = Very bad news for California's unemployed workers

Posted by Jack Stewart, President on May 3, 2012

Two national surveys released this week provided very bad news for California’s 2 million unemployed workers.

The first survey, Best/Worst States for Business, was released by CEO Magazine. The survey of 650 Chief Executive Officers (CEOs) found California the worst state in which to do business, a ranking California has held for the past eight years. When America’s CEOs deem California the worst state to do business, there is little chance their companies will be making job creation investments in California.

The following is a representative sample of comments from participating CEOs in the often cited survey:

"California is the worst! They are doing everything possible to drive a business out of their state. If it were not for the climate, they would have lost half their population.

"California regulations, taxes and costs will leave only tech, life sciences and entertainment as viable. If you aren’t an elitist, no room here for the middle or working classes.

"California treats business owners like criminals. California has different overtime policies for its own employees vs. private sector.

"California’s labor regulation is a job killer. We will be moving our business out of the state, which will lose hundreds of jobs simply due to the poor regulatory environment.

"California should secede from the union—it is like doing business in a foreign country, it has its own exchange rate, and its regulation is crazy.

Full List of CEO comments

 

The second survey, Best Cities for Jobs 2012, was published by Forbes Magazine.  To determine the best cities for jobs, Forbes ranked all 398 U.S. metropolitan statistical areas (MSAs) based on employment data from the Bureau of Labor Statistics (BLS) covering November 2000 through January 2012. Rankings are based on recent growth trends, mid-term growth, long-term growth and the region’s momentum.

The highest ranked California SMA is Hanford-Corcoran as the 36th best city for finding a job.  Three other California SMAs made the top 100; San Jose-Sunnyvale-Santa Clara, Bakersfield-Delano and San Francisco-San Mateo-Redwood City.  On the other hand, Texas had 20 SMAs in the top 100 and 6 in the top 10.

According to the report authors:  “So amidst all the good news, which big cities are still doing badly, or even relatively worse? Sadly, many of the places still declining are located in our home state of California, including Los Angeles (59th place among the biggest metro areas), Sacramento (60th), and just across the Bay from Silicon Valley, Oakland (63rd). Only the old, and to date still not recovering, industrial towns of Providence, R.I. (64th), and Birmingham-Hoover, Ala. (dead last at No. 65), did worse."

 

Complete ranking of 398 cities

 





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California lost another 1,500 manufacturing jobs in November: Time for job creation 101

Posted by Dorothy Rothrock, President on Dec. 20, 2010

On Friday we learned that California lost another 1,500 manufacturing jobs in November and that our overall unemployment is second worst in the country.

California Assembly Speaker John Perez showed his concern in his "welcome" speech to our new Legislature two weeks ago and said that increasing jobs for Californians is the main solution for the budget crisis.

We agree.  But he didn’t take the time to describe what it takes to create a job.  Let’s not assume that everyone knows.

Job Creation 101 - What creates a job?  First you need an entrepreneur with an idea for a new or better way to do things, who can find someone to accomplish the work. Then the entrepreneur must develop and sell the product or service for more than the wages paid and other costs.

Do we have what it takes to create new jobs in California?   Let’s break it down:

1. A good idea for new products or services

No shortage here – California is bursting with talent and innovation.  We boast huge numbers of patents, venture capital investments and small business start-ups.  But we are not alone. Other states and nations are getting better at this. 

2. Market demand for the product or service

California is a large market with international reach – an ideal place for market research, to conduct early commercialization and connect with suppliers.  Other locations are also favorable with greater ease of travel, communications, etc.  The “flat earth” is lessening our advantage in this area.

3. Predictable costs of operation and ability to maintain or grow facilities

This is one area where California falls drastically short. The regulatory and tax environment is uncertain and punitive.  Entrepreneurs justifiably fear that costs and taxes will go higher with little regard to impact on job creation. This is often reflected in surveys of CEOs and site selection managers. We are famous for long and uncertain timelines for licensing and permitting facilities.  A businessowner recently summed it up perfectly: "It is not about a single regulation. It is about an attitude of no respect or concern for business of any kind in this state."

4. Total costs of operations, wages, and taxes are less than the price of the product or service

Another black mark for California. Costs for manufacturers are 23% higher than the national average, for example.  Taxes are at the high end compared to other states.  Wages are competitive, but taxes, workers' compensation, and other costs associated with each employee is high. Electricity costs 50% more than the national average.  The ability to raise prices to overcome the higher costs is lower due to flat earth dynamics.

5. Access to workers with the skills that are needed to accomplish the work to be done

California once had a world-class education system but we are sadly seeing this decline.  Other states and nations are catching up.  Manufacturing job creation is particularly hurt by the drop in career and technical education in the public schools.  Two decades ago, 75 percent of our high school students enrolled in vocational courses, now barely 30 percent.  Housing is also expensive in California, putting upward pressure on wages and discouraging qualified workers from moving to California.

6. Adequate public infrastructure to support commerce and operations (energy and water supply, transportation, etc.)

A troubling area for California.  Budget deficits make it more expensive to borrow for public infrastructure and taxpayers are less likely to support new bonds while deficits and taxes are too high.  The prospect of higher costs in the future to pay for crumbling infrastructure will dampen enthusiasm for new job creation in California.

Looks like we come up short in some critical areas.  CMTA looks forward to working with Speaker Perez and his colleagues to address these concerns and add the jobs we need to bring California back in the black.

To fully understand the need for Job Creation 101 in California, have a look at the country's 14 most unemployed regions.

In 2011, every bill in our State Legislature should work toward improving one or more of these policies for job creation.





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Dear Legislature: Your jobs rhetoric is not creating jobs

Posted by Jack Stewart, President on Aug. 24, 2010

For the past year, we've heard you say again and again that your top priority is jobs for California workers.  Unfortunately, you are not walking the talk.

According to the U.S. Bureau of Labor Statistics, from August 2009 to August 2010, thirty one states created new jobs while nineteen states lost jobs.  Texas was the big winner with 134,600 new jobs.  California was the big loser with a loss of 103,900 jobs.  Utah, with a population 1/14 the size of California, created 13,800 new jobs by targeting California’s high technology employers.  The long term jobs picture for California is even gloomier.

Our plea to the California legislature in this final week of session:  don’t make California’s jobs climate any worse. But based on your actions so far this year, I have doubts you will hear our plea.

We’ve asked you repeatedly throughout the year to reduce the regulatory and tax burden on California employers.  I guess you weren’t listening.

We’ve asked you to reform California’s meal & rest period law to provide clarity and reduce unnecessary costly litigation.  You didn’t seem to care.

We’ve asked you to consider the ultimate cost to consumers and to California’s economy when you increase the renewable portfolio standard from 20% to 33% in SB 722.  You missed the point.

We’ve asked you to leave human trafficking to the federal government and not add an additional layer of California-only costs and uncertainty as proposed in SB 657. You must have missed the memo.

We’ve asked you to consider the unknown, unintended consequences of spending money you don’t have, but you’re moving forward with AB 1405 to appropriate nonexistent AB 32 cap & trade fees for pet projects unrelated to greenhouse gas reduction.  You must have another agenda.

We’ve asked you to balance California’s budget without job killing business tax increases, but you propose billions in new taxes targeted at employers.  You don’t seem to get the concept.

You’ve granted open season for Texas, Utah and other states to poach our most valuable resources, our jobs and our industries.

In the next few days, you have the opportunity to make a difference for California’s 2.3 million unemployed workers.  Consider the consequences.





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