CALIFORNIA BUSINESS MINUTE
Manufacturing
06-24-09
Hi, I am Tim Johnson and welcome to the California Business Minute.
According to a new report, California is losing a battle with other states to retain
and attract manufacturing jobs, and the cost of doing business is largely to blame
as presented by the California- based Milken Institute. The report was paid for in
part by the California Manufacturers & Technology Association.
The Report identifies that the state had 21 percent fewer manufacturing jobs in 2007
than in 2000, compared with a decline of 20 percent nationally and 13 percent among
seven states that are competing for the same types of manufacturing jobs.
The report compares California's performance and policies from 2000-2007 to Arizona,
Indiana, Kansas, Minnesota, Oregon, Texas and Washington -- chosen for their increasing
share of U.S. manufacturing jobs and production, especially in high-tech manufacturing.
“The state is hemorrhaging high-tech manufacturing jobs at an even higher rate than
in traditional manufacturing industries,” Milken says. California's employment in this
high-wage, high-skill segment is down 23 percent from 2000 levels, as opposed to
declines nationally of 19 percent and the peer states' average of 16 percent.
From 2003 to 2007, encompassing the recovery of the high-tech sector, the peer states
gained 24,000 high-tech manufacturing jobs while California lost almost 16,000, the
report says.
"Widespread misconceptions about the manufacturing sector in California are part of
the problem," says Perry Wong, senior economist and one of the authors of the report.
"People don't understand that manufacturing is an integral part of the high-tech and
clean-tech economy. If Californians want to build the future economic recovery on
high-tech and retain highly skilled workers, they have to address the underlying
issues of this sector now."
Driving the decline, the report says, are “a reputation for an unfriendly business
climate, comparatively high tax rates, a restrictive regulatory climate and unsustainable
government spending.”
The Milken report suggestions include:
• Streamlining the regulatory procedure for manufacturers, without relaxing
or changing regulatory standards, to increase transparency and accountability
in the regulatory process.
• Enhancing public incentives through better planning, coordination across
government agencies, and partnering with the private sector.
• Launching an industry-led campaign to encourage Californians to pursue
careers in the highly technical and highly paid manufacturing field.
• Creating a network of education, training, research, and business incubation
centers around the state.
• Developing a public-private initiative to conduct research and develop new
manufacturing processes that are cleaner, more energy efficient, and generate
less waste.
I am Tim Johnson and this has been the California Business Minute.
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