New 2012 numbers show that California is still lagging the country in manufacturing investments

Posted by Gino DiCaro, Vice President, Communications on May 23, 2013

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'Made in California' plastic bags mean California jobs

Posted by Jack Stewart, President on April 25, 2013

It’s more important than ever that our leaders find ways to help California’s manufacturers grow and compete for our state’s fair share of the nation’s manufacturing renaissance. What we most certainly do not need at this point are more obstacles and barriers to manufacturing job growth.

And yet, those keep coming. Consider one current legislative proposal – a bill to ban plastic bags statewide. While scientists and others may argue about whether this will help or hurt the environment, there is no disagreement about its immediate impact – it will threaten jobs in our manufacturing sector. And while there may have been a time when legislators could ignore a few hundred jobs here and there as a reasonable trade-off for making a statement, this isn’t that time.

AB 158 by Assemblyman Marc Levine from Marin County would ban single-use plastic grocery bags and mandate that any store with more than $2 million in annual sales provide re-useable bags to all patrons.

Plastic bags are phenomenally strong for their weight and represent a dramatic level of cost-saving for grocers, retailers and, ultimately, consumers. Despite their status as the favorite target for environmental activists, they boast a number of important advantages over the alternatives. A 2008 study, for example, found that the reusable shopping bags being all but forced on consumers today often contain considerable bacterial build-up, mold and yeast.

Nobody is saying plastic bags are issue-free. In fact, California has rightly been a leader in the effort to encourage their re-use and recycling. Increasingly, shoppers are finding new uses for these bags and giving them much longer lives. And better recycling processes means these bags are being used to make things like park benches or playground equipment. These efforts work, and do so while still valuing the needs of our economy and the need for high-paying jobs.

Manufacturing in America is making a comeback. U.S. manufacturing jobs grew by 4.5 percent from January, 2010 through 2012. This is great news for our entire economy, as it’s well-established that growth in manufacturing drives growth overall and creates high wage jobs.

Unfortunately, the news in California isn’t as good. Here, manufacturing employment has been stagnant, sitting out the rebound seen in the rest of the country. In the past three years, the top 10 manufacturing states averaged a 6.3 percent growth in manufacturing employment. In California, we saw less than a half-percentage point of growth.

Sadly, these facts are unlikely to stand in the way of the ongoing demonization of plastic bags. The drive to eliminate them has taken on the feel of a sacred mission among some elected officials. But pursuing this mission requires an ability to ignore some troubling realities. First, we don’t solve litter problems by banning products; we solve litter problems by better enforcement and better efforts at recycling. Second, there are more than 2,000 California families who put food on the table each night thanks to jobs associated with manufacturing plastic bags.

Some say California is inhospitable to manufacturing. Well, it doesn’t have to be that way. Policymakers consistently ask me what they can do to help grow manufacturing jobs. Their efforts to find ways to help us compete are genuine. But considering our state has the highest unemployment rate in the nation and a manufacturing sector that is missing out on a national rebound, one good way to help is to take a pass on actions that ban useful products, increase costs and eliminate good jobs.

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Manufacturing sales tax exemption bills move forward

Posted by Gino DiCaro, Vice President, Communications on April 25, 2013

This is a follow-up to last week's 'Tipping Point' piece on CMTA's proposed sales tax exemption on manufacturing equipment purchases.

Both tax exemption proposals were heard in committee this week, receiving positive comments from legislators. SB 376 by Sen Lou Correa received a unanimous 7-0 vote in the Senate Governance and Finance Committee and Assemblyman Kevin Mullin's AB 486 received an affirming hearing but we won't know the bill's fate until the Assembly Revenue and Taxation Committee votes on it in its 'suspense file' hearing next week.

Both bills enjoyed wide support in testimony with the only opposition coming from California Tax Reform Association, a group funded by public employee interests. In ten years, among at least 30 proposals, only one ever made it past its first hearing,

CMTA stepped up its game this week to show the job impact from the manufacturers investment credit back when it was originally implemented in the state in 1993 for a ten-year period. See for yourself below. We basically caught up to U.S. manufacturing in the first seven years and grew by seven percent with 131,000 new manufacturing jobs before the massive tech bust occurred.

California manufacturers can overcome big challenges with the support of state and local government. Most manufacturers realize there is a premium to pay to operate in the state, but the total valuation of California costs makes it almost impossible to compete. Bringing back the sales tax exemption on manufacturing investments is one way to get back in line with most other states and position the state to compete for manufacturing scale-ups.

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Manufacturing gap between US and California grows

Posted by Gino DiCaro, Vice President, Communications on March 20, 2013

We updated our manufacturing employment numbers, comparing us to the nation.

Since January 2010, the country has seen 4.5 percent growth with 517,000 new manufacturing jobs, while California has been stagnant with only a 0.45 percent gain in its manufacturing base.

That two-year trend seems to accelerate the gap that has been slowly growing over 12 years -- where California saw a 33 percent loss versus the nation's 30 percent decline.

(CORRECTION to earlier post: The LMID spreadsheet showed a number of 1,231,000 for December 2012. The January number for their March release was actually 1,247,000. It's corrected in the chart and text above.)

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Manufacturing employment takes another hit

Posted by Gino DiCaro, Vice President, Communications on Sept. 27, 2012

One week after the California Labor Market Information Department reported the August employment numbers with only a slight increase in manufacturing jobs, Campbell Soup announced that it would close its Sacramento facility and shutter 700 high wage, union manufacturing jobs.

According to reports, "Campbell's is closing its oldest and most expensive manufacturing plant in the U.S. in an effort to cut down on production costs as soup sales continue to decline."

CMTA's valued long-time member provides us with a valuable lesson on the business climate. It's not perception. It's hard costs and markets. California can help fix the former, but not the latter. But it must get to work before its too late for scores of other manufacturers.

California continues to lag behind the country in manufacturing employment growth over the last two years, as seen in the chart below. The numbers show the rest of the country is winning out on manufacturing growth, with 4.5 percent growth, while California remains stagnant.

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