California’s manufacturing jobs declined again in August.  This month there are 2,800 less high wage middle class jobs in California that could have played a role in our  economic recovery.  The total loss since January 2001 now totals 583,000 — 31 percent of the state’s original manufacturing base at the start of this century.

While we lose these jobs, California also suffers from too many missed opportunities for new growth.  An exponential amount of companies surveying the country for competitive places to manufacture have given up on California because of costs and unpredictability.  This must be turned around with laser focused policies for competitiveness and an articulated commitment to growing middle class jobs and the economy.

One week after the close of the state’s legislative session, we can start with some important vetoes and signatures for Gov. Arnold Schwarzenegger to help keep the state’s manufacturing base afloat.  Below are some of those important bills with CMTA’s veto and signature request letters.

The President of the Association of Washington Business, Don Brunell, wrote a piece this week asking Washington state policymakers to "polish up their investment strategies for Washington’s manufacturing base" or risk California’s fate.

Brunell uses recent reports and the Milken findings to explain how California has killed and continues to kill the proverbial golden egg that it needs for its recovery and new revenues.

Even the well-read British magazine, the Economist, supported Brunell’s findings.  "Indeed, high taxes, coupled with intrusive regulations on business and greenery taken to silly extremes, have gradually strangled what was once America’s most dynamic state economy," Brunell noted from the magazine.

A great read for any policymaker: Golden State’s manufacturing image tarnished

Governor Arnold Schwarzenegger could get a Renewable Portfolio Standard (RPS) bill on his desk after the state’s legislative session ends this week.  SB 14 by Sen. Joe Simitian would deny California utilities access to the most cost-effective energy and, according to the Public Utilities Commission, raise the state’s industrial electricity costs at least 7 percent.  The Energy Information Administration states that existing rates are already 45 percent more expensive than the nation and 80 percent higher than the western region.

California industry can barely compete with its neighboring states and energy costs play a major role in that imbalance.  The AB 32 greenhouse gas law that passed in 2006 already allows the California Air Resources Board to implement RPS in a cost-effective manner.   Gov. Schwarzenegger should veto this bill because it will impose huge new costs and threaten high wage manufacturing jobs in California.

Read Letter to Gov. Schwarzenegger

Unfortunately, the Toyota portion of NUMMI (New United Motor Manufacturing Inc.) will follow GM’s path and vacate their Fremont, California manufacturing facility, despite broad support from the Assembly Jobs Committee at a Tuesday hearing.

NUMMI’s decision shows what is certain to materialize for other companies and their suppliers if state policymakers don’t produce a competitive manufacturing environment:  California facilities will be the first to go when tough economic decisions are made.  Uncertainty, regulatory costs and taxes are simply too high in California.

Dan Walters opined today that vocational skills could get a big and needed boost from SB 381, a bill that will be heard in the Assembly Appropriations committee tomorrow.   The bill simply asks that any high school requiring those courses approved by the UC and required for admissions to both UC and CSU campuses for graduation also provides career tech options for its students.

SB 381 protects curricular pathways for all students by saying ‘no’ to districts who wish to force a one-track "A-G" system on all students without providing career-preparatory coursework, too.

Take a look at this video of soundbytes from technical education students (and a teacher or two) who were recognized yesterday in the legislature.  These students show the passion and success these courses produce, as well as the impediments to real-world technical education opportunities.  Every Legislator should watch this.

Joel Makower, founder of cleantech research and publishing firm Clean Edge, recently remarked that other states are starting to "eat California’s lunch" when it comes to attracting and retaining clean technology companies. This point was called out on page 25 of the CALSTART Industry report on the state’s barriers and opportunities for economic and environmental leadership.

In the same report, venture investor, Vinod Khosla warned that high costs and slow permitting processes were threatening to drive many advanced biofuels companies out of California.

In another study recently released, the Milken institute took a look at high tech manufacturing growth. Of course many of the cleantech industries come out of this particular sector. The results were stunning when it came to California’s major competitor, Texas. Their high tech manufacturing as a percentage of GSP grew by 86 percent in 7 years. California’s grew by only 7 percent.

Recently, Stephen Colbert opined humorously that "Corn plus magic equals gasoline!"   The Contra Costa County Superior Court and environmental plaintiff’s quipped similarly last week on a Chevron upgrade and expansion, only it went something like this: "Shut down facility, retain workers, make magic."

A Chevron project that had hired approximately 1,000 temporary Contra Costa Building and Construction Trade workers was ordered to stop construction.  The facility was being upgraded for efficiency — to make 7 percent more gasoline from the same amount of light to medium crude it was already taking in.  The shut down was absurd on its own, after a 3-year long permit approval process, but it got even more nonsensical when the environmental plaintiff’s claimed that Chevron should keep the workers on payroll because the closure was not their fault.  What?  See paragraphs 11 and 13.

A friend recently gave me advice on Sacramento’s mess and the California electorate’s disposition. "People aren’t worried about their taxes, they’re worried about their jobs," he said. "The entire Legislature just doesn’t get it."

My friend was making a deep-rooted comment on California’s priorities.

The state’s chaos stems from mis-prioritizing everything. Taxes, cuts, spending and regulations in California all currently arise out of the unaccountable expectations of a short-term legislative roster with no long-term strategy for private-sector jobs. Put simply, job growth incites rhetoric in press releases but it doesn’t find its way into bills and analysis.

If I were a pollster, I would take six months to ask as many Californians as possible this question: "Would you accept a one-cent tax increase on all goods manufactured in California if it would guarantee high-wage private job growth in the state?" The chorus of "Yes" would undoubtedly follow. Try asking that question among your peers and see what happens.

This week the Milken Institute released a study that shows California has long neglected a segment of its economy that is critical to economic growth.  Let’s face it, California’s business climate problems are as big and bold as its current budget morass.  We must seek out, promote and value our champion industries of economic growth.   According to the report, "California is the only one among its peers to lack a comprehensive long-term economic strategy."

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 is broke.  The poor are worried about losing benefits. California companies don’t want to pay more taxes. Someone has to lose for the other to win, right?

Wrong.

The media likes a good fight, and the bell has rung in Sacramento for a heavyweight bout. In this corner, greedy businesses get tax breaks and in that corner the poorest and most vulnerable citizens are denied healthcare.  But the question is: Will the policy choices at the end of this cage match make us a better and more successful state?

The other night, I heard a father tell his screaming, red-faced child: "Take a breath, buddy, take a breath."   We have become that child.  Let’s take a breath.