Congratulations are in order to members of the California Legislature, California Air Resources Board, no growth advocates and others. According to a study released this week, the tourism industry is Los Angeles County’s number one job generator. This follows news of earlier this week from the Milkin Institute about the continuing loss of manufacturing jobs in California.

According to the Los Angeles Times, “Trade and manufacturing generally pay higher wages than tourism” and that “…economists have long worried that the region’s employment base is in danger of getting too many low-paying jobs.’ But don’t fret, in addition to the good news about California’s newest growth industry (prior to the closure of all state parks), it should be noted that sweeping up garbage at Southern California amusement parks can be classified as some of the “green jobs” we have all been promised.

International trade through California’s ports continues to plummet. The latest year-to-date figures show the following:

Port of Los Angeles: -16.2%
Port of Long Beach: -27.1%
Oakland: -13.8%

Trade volumes were dropping well in advance of the current economic collapse. The drop in trade has been a function of higher landside costs, political dysfunction and uncertainty – both at a local and state level, imposition of multiple fees, conflicting (and competing) environmental regulations and the development and expansion of alternative gateways in Canada, Mexico, Texas, Alabama, Florida, Virginia, the Carolina’s, Georgia and the like. Other states and countries have placed the development of freight policy and funding as a priority. In fact, those states are seeking out more goods movement business and supporting the creation of new jobs. In California some elected officials try to promote goods movement, but for some it is a hobby or worse the industry is described as a burden to the state.

How did we migrate from trade friendly to trade hostile? Over the years, the California Legislature has introduced dozens of bills that seek to “regulate” the logistics industry. These proposals have ranged from establishing hours of operation, imposition of significant new fees to micro-managing business operations by mandating specific pieces of equipment or fuel. The proposals and mandates have either made California more expensive or added a great deal of uncertainty to those businesses planning for the future.

All of these changes were done, of course, with the best of intentions. Every author of these prescriptive measures maintained that they supported the continued growth of the logistics industry in California. Now that the logistics industry is in a state of freefall, and with it the loss of jobs and opportunities for tens of thousands of Californian’s, can you guess how many bills have been introduced in the Legislature as part of an effort to stop the bleeding or foster future growth? Not one.

California policymakers are engaged in very difficult discussions with regard to the state budget. Unfortunately the debate seems to focus on only two punitive alternatives: draconian budget cuts or increases in taxes – both of which put California in a very unfriendly light. I leave to more informed people to debate how to resolve the current budget deficit. But for a better future California also needs to “create the opportunity for lighting to strike” with respect to job creation and business opportunities.

The first change the state needs to make is to adopt policies that allow the creation of quality blue collar jobs that provide a career for men and women. We can only achieve that goal by spending an equal amount of time and energy building our state’s economy. For example, there are federal stimulus dollars and Proposition 1B funds (somewhere) that can be utilized to improve our aging infrastructure. We also need to move forward with changing the environmental review and permitting process in such a way that doesn’t deviate from the goal of environmental protection but does moves away from the multigenerational marathon that exists today.

The reality is that industries contemplating expansion or improvement face a choice between an uncertain and expensive process for expansion in California or the help and encouragement of a competing state. While congratulations are in order for the tourism industry for rising to the top of job rankings, we should all be extremely concerned and worried for the long term implications for California.