Middle-class manufacturing jobs? Not in California

2/1/2015

It took far too long, but finally many state politicians are taking seriously Census Bureau reports that California is ground zero for American poverty. Once the high cost of living is factored in, the Golden State moves from the middle of the pack nationally to a clear number one, with nearly one-quarter of residents in a constant struggle to make ends meet.

But with this harsh fact finally internalized, when will state leaders come to the parallel realization that having among the nation’s highest energy and real estate costs is also bad for the economy — and for job-seekers without college degrees?

This is underscored by recent reports on manufacturing’s renaissance in the United States — a phenomenon that stops at the California border.

Manufacturing jobs are a classic steppingstone into the middle class, paying much better than service or retail work. Such jobs in the aerospace and automobile industries were a central pillar of the state’s economy from World War II to the end of the Cold War. Then California and the rest of the United States began to hemorrhage millions of manufacturing jobs to lower-cost nations, especially China.

In the last half-dozen years, however, as wages soared in China and as exploding U.S. natural gas and oil production drove energy costs down, we’ve seen a “reshoring” phenomenon in which dozens of manufacturers have returned to America — sometimes to the states in which they were originally based.

Except the Golden State. Returning manufacturers take “a fresh look at the whole country. Unless you’re forced to be in California for some reason, increasingly it’s hard to find reasons that you have to be here,” Dorothy Rothrock, president of the California Manufacturers & Technology Association, told The Los Angeles Times.

The number of manufacturing jobs in California has edged up 1 percent over the past five years versus about 7 percent nationally.

Unfortunately for the millions of state residents without white-collar job skills, these sorts of statistics don’t seem to bother California’s dominant Democrats. Environmentalists are more likely to see factory jobs as grubby and unsavory than as welcome. There’s also the view offered by Gov. Jerry Brown and others that amounts to a shrug — there’s nothing anyone can do about the fact that lots of people want to live here, so of course California will be an expensive place to live.

That’s only partly true. The streamlining and fine-tuning of the California Environmental Quality Act recommended by the past three governors would make building factories much cheaper.

And the decision to force energy costs much higher by using cleaner-but-costlier sources of electricity is also something that can be reversed. This policy hasn’t remotely achieved its original goal of inspiring the rest of the world to copy California. Instead, its main effect is to reduce the state’s economic competitiveness.

That California has been left out of the U.S. renaissance in manufacturing isn’t just unsurprising. It was predictable.

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