Author: Gino DiCaro

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.

Last Thursday, the California State Senate voted in support of Sen. Wright’s SB 381 on an overwhelming and bipartisan vote of 32-2  (2 no’s: Simitian and Wiggins — 5 abstains: Alquist, Cedillo, Oropeza, Romero, Wolk).  Over the weekend, the most emailed article out of the New York Times was a piece, written by Matthew Crawford, on how we have devalued working with our hands. The two items together represent a growing shift back to education reality and the fulfillment of all our students’ dreams. 

Crawford summed up how, over time, our country has begun to view our children’s success:

"A gifted young person who chooses to become a mechanic rather than to accumulate academic credentials is viewed as eccentric, if not self-destructive. There is a pervasive anxiety among parents that there is only one track to success for their children."

This week the Assembly
Revenue and Taxation Committee passed — with 6 voting yes and 3 not
voting — a bill that brings California in line with 47 other states by
exempting the sales tax on manufacturing equipment and giving working
families a fighting chance for higher paying careers.  The
bill is AB 829 by Assemblymember Anna Caballero. 
Unfortunately, the bill was amended to include offsetting revenue
sources, a difficult circumstance during tough budget times. 
But the vote on the bill shows that legislators want to put out the
welcome mat for high wage employers.

Many in both
the capitol and media circles have argued that companies aren’t leaving
the state and they often use that as carte blanche to oppose the
removal of any barriers to conducting business in California —
including reinstatement of the sales tax exemption that our employers
lost back in 2003.

1. Caterpillar bulldozes to fuel efficiency and less greenhouse gases
California’s Air Resources Board continues to formulate plans for cap and trade, mandatory reporting, carbon offsets and other mandates to reach bold California-only emission goals.  There are, though, other forces out there promoting change that are a win-win for everyone.  Take for example the Caterpillar D7E Track Type Tractor (what we call a bulldozer and pictured below) that was unveiled last week in front of the Cal EPA building.  This innovation screamer is a result of Caterpillar’s focus on the marketplace and reducing the operating costs of their customers.  CARB acknowledged this innovative approach for powering these off-road machines at the recent unveiling of their new funding program for clean engine technologies  (see CARB release).

Earlier this week, I wrote about how Dan Walters missed the mark on California’s job woes.  In his latest column, however, Walters nailed it on education.  He all but declared California’s recently imposed high school exit exam a failure and the continued one-size-fits-all education system a serious threat to our children and workforce.

CMTA and the many manufacturers it represents (along with the emerging torch bearer for the state’s career technical education needs, the Get REAL coalition) gives equal respect for all students’ dreams by demanding non-discriminatory educational resources to attain those dreams.  A mantra that has fallen flat in California’s $60 billion education community.   That notion is substantiated by the fact that, over the past 10 years, high school dropouts have increased by 27 percent (reaching annual dropout rates around 35 percent) while crucial and inspiring technical courses have declined by 20 percent (and 50 percent over last two decades).

The Sacramento Bee’s Dan Walters opined on Monday that there is no evidence of job-migration out of California and generally that any concern over our business climate is unfounded.  He focused on the following two points:

1. A 2008 PPIC report that found limited amount of job migration out of California. 
2. The notion that California’s business climate is unchanged from many years ago when the state experienced an economic boom.  I assume he meant the 90’s.

At this blog, we focus on the massive opportunities that come from high paying manufacturing jobs for workers, the economy and the state budget — and how manufacturing employers can succeed in California.  It should always be noted that a manufacturing wage pays approximately $20,000 more than a service job and provides the needed tax base for bold state government programs.  Here are three facts that should be considered in response to Walters’ piece:

I recently watched an employer focus group unfold.  An executive was asked, "Is there anything positive about conducting business in California?"  The employer replied, "Yeah, investment barriers to new competitors in California."  Another respondent replied without hesitating, "There is no way we would invest anything more in California."

These realities play out in so many ways — notwithstanding California’s tremendous quality of life advantages — while so many unfounded and rushed policy directions tip economy-altering board room decisions against our working families.