Viewing blog posts written by Jack Stewart

To Legislature: Protect manufacturing in closing hours of session

Posted by Jack Stewart, on Sept. 12, 2013

The Legislature committed to growing California manufacturing investments this year, by passing a key bill to make our state more competitive with the rest of the country.  We must continue on this path and not go backward.  On this last day of legislative session, there are some bills that need to be defeated to ensure that high wage manufacturers see the state as a safe place to make long term investments.

Below is a floor alert that CMTA sent over to the Legisalture this afternoon asking legislators for three "no" votes to protect manufacturing in the closing hours of this session.



CMTA logo

VOTE “NO” ON AB 1330, SB 691 and AB 10

Manufacturers need a competitive business environment to hire employees and expand operations in California. You took a positive step this summer by passing a sales tax exemption on the purchase of manufacturing equipment.

Don’t vote for bills that will take us backward.  Business leaders and other states are watching to see if California is serious about making a manufacturing comeback.   Show them that we’ve put out the welcome mat for new manufacturing investment:

Defeat these bills

AB 1330 (Speaker John Perez)

Doubles fines on manufacturers in some California communities which will deter investment and job growth.

SB 691 (Sen. Loni Hancock)

Manufacturers will be subject to fines for air nuisance emissions without proof of harm, willful action, or violation of permit limits.

AB 10 (Asm. Luis Alejo)

Higher payroll and supplier costs will lead to less investment and fewer workers.  

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Proposed labor bill could backfire on safety, costs and jobs

Posted by Jack Stewart, on Aug. 30, 2013

California’s manufacturers place a high premium on a skilled workforce that produces world-class products while protecting their safety and the safety of their neighbors in the surrounding community.  So we are understandably alarmed by legislation that would not only put that safety at risk, but create an unprecedented mandate that would fundamentally alter the ability of private businesses to make critical hiring and compensation choices.

SB 54 (Senator Loni Hancock) is just such a bill.  It purports to be about safety but in fact could increase risks, displace highly skilled workers with excellent safety records, and remove the flexibility of employers to hire the best available workers.  SB 54 would establish arbitrary training requirements that would force refinery and petrochemical facilities to choose a large percentage of their workers from the membership of a single union, and to pay those workers government mandated wages.

In the case of the refining industry, California’s 14 facilities will be limited to far fewer qualified workers for essential projects that directly impact the safety of a facility and its surrounding community.  SB 54 impairs those employers’ ability to select their contractors on the basis of their expertise, experience, actual safety record, risk and safety management compliance and workforce training and availability.  SB 54 will materially increase payroll costs that likely would be passed on to consumers. As the first such law of its kind, SB 54 sets the stage to do real damage to the state’s economy just as we’re beginning to recover from one of the worst recessions in history.

The bill will displace, according to the United Steelworkers Union, up to 10,000 highly skilled and experienced workers for no cause other than that they belong to the “wrong” union.

Any manufacturer will tell you this is not a small matter of inconvenience for the targeted employers – it’s a recipe for an array of unintended consequences in terms of safety and consumer costs.  And it’s made even more frustrating because SB 54 is entirely unnecessary to improve safety. Thankfully, there is a common-sense alternative to SB 54.

In the wake of last August’s Richmond refinery incident, the Governor formed an Interagency Working Group on Refinery Safety, charged with strengthening emergency preparedness and improving worker and public safety through increased oversight. 

The Governor’s Working Group is already making good progress in tightening up monitoring and oversight, and in increasing the penalties for violations of safety, health and environmental regulations.  California’s refining industry boasts one of the best safety records in the nation. It makes sense to start a conversation about safety reform with solutions that build upon and improve standards rather than displacing thousands of workers, raising the cost to produce a fundamental energy source, and establishing a mandated wage precedent statewide.

California manufacturers are distinctively proactive when it comes to issues of safety, and look forward to working with the legislature and the administration in a thoughtful process to improve safety. SB 54 works in direct conflict with that goal.  In the interest of safety, cost, and fair employment practices, SB 54 must be defeated. 


(You can sign the petion to stop SB 54 online here)

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Keep the ‘Affordable Care Act’ affordable

Posted by Jack Stewart, on June 17, 2013


California manufacturers are among the best friends the state's economy can have.  The sector pays an annual average of $74,000 in wages and traditionally is one of the best providers of health insurance for employees.
You would think, then, that everyone on Team California would be pulling for this vital sector to remain healthy and growing.  After all, over the last two years, our state has lagged behind the rest of the country in manufacturing job growth and new investments. 
You'd think that, but sadly, you'd be wrong.  Right now, the California Legislature is considering a bill that threatens our ability to foster growth in manufacturing and other critical sectors.  That bill, AB 880 by Assemblymember Jimmy Gomez, will severely harm businesses, employees and the state’s effort to implement the federal Affordable Care Act (ACA).  
AB 880 places a fine on businesses with 500 or more employees when any worker – including part-time or seasonal -- putting in eight hours a week or more decides to enroll in Medi-Cal instead of the employee-sponsored insurance plan. This fine could be between  $6000-$15,000 per employee.
This proposal does not help increase healthcare coverage, rather it will penalize employers – including employers who provide healthcare coverage to its workers.
When the ACA is fully implemented, all Californians will be guaranteed access to health coverage and this bill is not necessary to achieve that goal. In fact, AB 880 doesn't provide one worker with health insurance. It doesn't lead to one more office visit or hospital stay being covered.  What it does is create a burdensome new law and regulations that will dampen job creation and add to the government bureaucracy. 
Businesses, like everyone else in California, are in the midst of trying to figure out how the ACA will work and how to meet the requirements of the new law.  AB 880 steps in at this uncertain time and introduces a chilling uncertainty -- additional and costly penalties and taxes, and more complicated government rules. The result is confusion and another disincentive to adding manufacturing jobs in a state that needs them.
Supporters of the bill deceptively claim that it will only impact a few very large companies that won’t leave the state.  Somehow, fines can be imposed and sanctions levied, but nobody gets hurt.  Please. The reality is that AB 880 will discourage California employers from every major industry sector from growing in the state and hiring part-time workers or workers who are trying to enter or re-enter the workforce. That hurts everybody.
Our state has been stagnant in manufacturing job growth during last two years while the nation grew these jobs by more than four percent. That means that California is not getting its share of the emerging recovery.
The state does not need AB 880 to make the ACA work. Our manufacturers and other high-wage job creators, whom we depend on for economic growth, can’t afford it.

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'Made in California' plastic bags mean California jobs

Posted by Jack Stewart, 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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Finance reform without accountability could devastate career tech

Posted by Jack Stewart, on June 4, 2012

Cross-posted on June 3, 2012 at the Silicon Valley Education Foundation

Under the current K-12 public education system in California, programs that are not required, measured, or explicitly funded by the state will disappear from our schools. Elective courses are becoming victims of educational policy that only recognizes “success” as defined by scores on standardized tests in courses mandated for graduation or college admission. Since that’s all that is really measured, that’s all that will really matter.

The ongoing state budget deficit and the lack of financial incentives to support programs outside of the mandated core academics will undoubtedly force districts to abandon such electives with impunity. This is our concern with  the “Weighted Student Formula” (WSF) proposal. Because the latest version of education finance reform doesn’t alter the current approach to accountability, we fear WSF will accelerate an already alarming narrowing of the curriculum.

In areas like career technical education (CTE), the impact of this well-intended reform could be devastating. Without incentives provided to districts to support these elective programs, there is simply no reason for them to do so. If you doubt that scenario, just examine the impact of the “flexibility” provisions granted to districts for programs like ROPs, Adult Education, and others since 2009 under the state budget. Given the unfettered authority to “flex” the use of these funds for any purpose, districts have obliterated Adult Ed throughout the state, and have put undue pressure on the vast majority of ROPs to survive on a starvation diet. Without  appropriate educational policies that hold districts accountable for truly meeting the needs of all students, this scenario will hold true for programs outside of the “required” or “measured” mandate. That’s not a recipe for success.

From a purely budgetary perspective, distributing CTE dollars without any vocational accountability upon schools makes little sense either. The three CTE-related categoricals most at risk under WSF  leverage every dollar the state invests. The Ag Incentive Grant requires local districts to match each state dollar (requiring districts to provide an extensive, annual report on the use of those precious state dollars). Apprenticeships are largely funded by contractors and unions, thereby stretching each state dollar invested in these “learn while you earn” programs. And Partnership Academies require both a local and industry match for each state dollar, magnifying the state’s investment threefold. Simply sending out these dollars on an per-student basis without any vocational strings 0r leveraged match requirements will cause more harm to education under any calculation.

We hope the governor and the Legislature take the time necessary to develop solutions to protect career technical education programs while also achieving education finance reform. Given the challenges facing these programs at the local level, we know our schools will not continue to support career technical education without the incentives to do so.

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