Report: Manufacturing STILL Matters in California
Milken Institute Study shows that state is neglecting critical engine of economic growth, $54 billion worth of output
June 23, 2009 Sacramento, CA -- The Milken Institute released Manufacturing 2.0: A More Prosperous California today, a study, commissioned by the California Manufacturers & Technology Association, to understand the current state of manufacturing and the need for action to save the state's most critical engine of economic growth. The report proves that the impacts of lost manufacturing jobs has been devastating and that the particular sector must become a cornerstone of our economic recovery.
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.
"California's economy has been built on manufacturing. It's steady decline is undoubtedly a 'canary in a coal mine' for the state's economy," said California Manufacturers & Technology Association President, Jack M. Stewart. "California has the capacity to innovate and make things but it is not at all living up to its potential."
The Milken Institute did a similar study in 2002, titled Manufacturing Matters. Since then, and even before the current international recession, California manufacturing has remained in decline, with little attention from policymakers.
Among many things, the 2009 study retroactively looked at how much California would have benefited if we simply maintained the same level of manufacturing from 2000 to 2007 (a 12 percent share of all California workers in 2000). According to the report, the state would have seen $27 billion more in manufacturing wages and $54 billion more in total manufacturing related output if we would have kept pace with 2000 levels.
"Just do the math on those numbers to see how much more the state would have seen in tax revenue," furthered Stewart. "It's absolutely crucial that our state doesn't neglect this sector for another seven years."
The report will be discussed Tuesday, June 30 at 9:00 a.m. in an informational hearing in the Assembly Committee on Jobs, the Economy and Economic Development. The Committee is trying to understand the manufacturing sector's role in our economic recovery.
"California manufacturing is clean, innovative, exciting and wealth creating," said Bishop-Wisecarver President, Pamela Kan, who's family first came to Califoria in 1854 and later started the company in 1950. "We employ 53 California workers who make great wages and very precise, innovative and technical products for many other manufacturing sectors. We hear constantly about our California suppliers' and clients' struggles with regulatory uncertainty and costs. Bishop-Wisecarvers's success is dependent on so many other manufacturers in the state. 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."
Kan's words are reflected in the report with a 9.8 percent decline since 2000 in the manufacturing sector's share of gross state product. Texas' share has actually grown by 24 percent in the same time. In terms of high tech manufacturing, the gap widens even more: California's rose only 7 percent while Texas is up 86 percent.
See more at these 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)