Yesterday, The Milken Institute released a new report titled, Manufacturing 2.0 – A More Prosperous California. The report was released in cooperation with the California Manufacturing and Technology Association (CMTA).
According to the report, California has 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. It went on to say that driving the decline is California’s reputation for an unfriendly business climate, comparatively high tax rates, a restrictive regulatory climate and unsustainable government spending.
I am just surprised that litigation was not also included. In addition to the items mentioned above, one thing that impacts economic development and steers businesses to other state or countries is a state’s litigation climate. All of these items go hand in hand at turning businesses away. I can see why Governor Perry in Texas is having such a great time.
When I worked at the CMTA back in early 1990’s, then President Bill Campbell (former State Senator) would always say that for every one manufacturing job you create in the state, you create five additional service jobs. Since that time California has been systematically wiping out it’s manufacturing base. People wonder why we have an 11.5 percent unemployment rate.
When people talk about high taxes and too many regulations, they need to start putting on that list excessive litigation. Manufacturers have plenty of choices when it comes to business friendly states and right now California is not one of them.