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Fighting for Good Jobs

 

Bringing Manufacturing Back to California 


Since 2000, California has experienced largeand sustained job losses in the manufacturing sector, mirroring the national manufacturing decline. Between January 2000 and 2009, California lost 471,000 manufacturing jobs, equal to
25.6% of all manufacturing jobs in the state. The loss of manufacturing jobs makes California’s economic woes even worse. Historically, California’s economy has been built on the success and growth of the manufacturing sector.

Without a robust manufacturing base, the state’s economy faces a long and slow recovery and uncertain future. The global credit crisis has only made the
situation worse. Despite the government bank bailout, banks are not lending and manufacturers cannot access credit. Manufacturers that want to expand, retool or start new enterprises cannot access the credit they need to do so. California was once the leader in manufacturing for new and innovative industries – from
aerospace to high tech. Even though California still is a leader in innovation and invention, the manufacturing of new products has moved overseas.

We are no longer a leader in manufacturing the products that build the new economy. California’s working families are struggling just to get by. The only way for California to emerge from this deep, dark recession is to invest in
the creation of good jobs with decent pay and benefits.

Investment in manufacturing is a smart way to get California on the road to recovery and lay the foundation for a robust economy. Manufacturing jobs have the highest multiplier effect of any job classification in any industry – for every manufacturing job created, an additional 2.5 jobs are created in the broader
economy.

The presence of one manufacturing firm gives rise to an entire supply chain creating business opportunities for suppliers, component manufacturers,
contractors and professionals. In addition, producing goods in-state spurs economic activity in the transportation and shipping industries.

Jobs in manufacturing are also good for working families. The average wage for a manufacturing job in California is $25,000 higher than that of a service sector employee and $35,000 higher than retail trade wages.

California has great potential to generate new manufacturing activity. We can begin making things again. The state has committed $9 billion to build a high-speed rail system and has received $4.1 billion in matching federal funds.

Currently all high-speed rail train car manufacturers are located overseas. But California has an opportunity to use public dollars to attract those
manufacturers to California to build high-speed rail trains here, creating new jobs and a new industry.

AB 894 and AB 16 invest in California’s manufacturing sector by providing the tools and markets that manufacturers need to grow and thrive in the state. Public investment in the manufacturing sector will yield short-term job creation that will put our members back to work today. The real value of manufacturing, however, is that it builds a strong foundation for tomorrow’s economic growth and prosperity.

AB 894 creates a Revolving Loan Fund in the State Treasurer’s office that will be capitalized by existing state and federal funds. The Fund will give low-interest loans to manufacturers that plan to create or retain jobs in California. Priority for loans will be given to applicants that pay the highest industry wage goals, provide good health and retirement benefits, and submit joint labor/management applications. Firms that do not meet job creation goals or that move jobs out of state will have to pay back the loan in full plus interest.

AB 16 will require the California High-Speed Rail Authority to make every effort to purchase high-speed trains manufactured in California when they contract for trains. Since no trains are currently manufactured in California, this consideration will create an incentive for train manufacturers from abroad to locate new manufacturing in California.

Download the Bring Manufacturing Jobs Back to California fact sheet.

 

Evaluating the Economic Impacts of Supercenters


With record high unemployment, every city is looking for ways to create jobs. When a developer makes big promises, it can be hard for local leaders to assess their accuracy. Different types of developments can have dramatically different
results on job creation and economic impact. While certain business models produce new jobs that revive the economy, others merely replace existing jobs. When it comes to job replacement, it is important to consider job quality and the
impact on small businesses. In these economic times, many cities and counties lack the resources to do independent analysis on economic impact and so they rely on the claims made by the developer or the company.

Over the past decade, some retailers have moved to a supercenter model. A supercenter refers to a large-scale establishment at least 90,000 square
feet with at least 10 percent of floor space dedicated to non-taxable goods. Supercenters have a complex and dramatic impact on everything from traffic flow to worker wages, from mom and pop shops to large retail chains.\

Because of their size and market power, supercenters often decimate nearby shopping centers and small business districts. Many supercenters are open 24 hours, resulting in increased noise and higher crime. In addition, as anchor tenants, supercenters often exercise significant control over which other businesses can be located in a specified area, depriving residents of access to competing retailers.

Some communities may decide that the benefits of supercenters outweigh the costs, but those decisions should be based on independent analysis of how a supercenter will transform a local economy. There is no downside to increased
information and well-informed decision-making.

SB 469 requires that an economic impact analysis be completed before a supercenter can be approved. The cost of an independent study will
be paid for by the developer. The study will measure the proposed supercenter’s impact on (1) supply and demand of retail space; (2) net impact on jobs; (3) need and cost of public services and facilities; (4) likelihood of increasing blight; (5) property values; (6) capture of retail sales; (7) vehicle use and traffic; (8) conformity to land use plans; (9) affordable housing and open space; and (10) viability of local businesses.

Nothing in this bill will prevent any community from deciding for themselves whether or not to build a supercenter. It will simply ensure that those decisions are made based on a factual analysis of the economic impact. This bill does not limit local control; rather, it empowers local governments to make the best decisions for their own constituents.

Click here to download the Supercenter Economic Impact Study fact sheet.

 

Corporate Tax Break Accountability


Californians have endured years of deep and painful cuts to vital programs such as schools, public safety, and social services. But the pain of California’s budget crisis is not shared equally. Corporations receive billions of public dollars each year in the form of tax breaks.

Altogether, the state gives away approximately $5 billion to corporations annually in the form of tax breaks, and close to another $9 billion in sales tax deductions that indirectly benefit business.

As public money flows out to corporations, public services are being devastated by budget cuts in every sector from education to health care. Each dollar the state does not collect from corporations is a dollar less for core state programs. California gives tax breaks to corporations as an incentive for them to create jobs, which the state urgently needs. In recent years, legislators have created numerous new tax loopholes and tax breaks in an attempt to spur economic recovery.

The problem is that these tax subsidies do not require that companies actually create jobs. The state does not require that tax breaks have any measurable goals or performance standards. Companies do not have to report if they created
jobs or not. In fact, the state does not even track which corporations claim tax breaks or how much they claim.

Under existing law, corporations can take taxpayer money and then eliminate hundreds or thousands of jobs. They can use taxpayer money to increase shareholder profits or CEO bonuses. The state has no way to hold corporations
accountable for the billions in tax breaks given away each year. To make matters worse, it only requires a majority vote to create a tax break, but a two-thirds vote to reduce or repeal it, virtually making tax breaks permanent.

The Enterprise Zone (EZ) program is a good example of the inadequate oversight of corporate tax breaks. The Public Policy Institute of California found in a 2009 study that the Enterprise Zones “have no statistically significant effect on either employment levels or employment growth rates.” Yet, the Enterprise Zone Program has grown significantly and costs the state nearly $500 million
a year even though research shows EZs fail to create jobs – a key goal of the program.

In contrast, recipients of public dollars, who are not corporations, are subject to stringent requirements. CalWORKS recipients, the poorest families in California, are required to provide fingerprints, be checked continuously for fraud and required to report their income every three months. They are also required to find work for thirty-two hours per week or their grant could be cut and assistance
reduced.

At a time when unemployment is at Depression-era highs and Californians face brutal budget cuts, we cannot afford to give away free money to multinational
corporations. Taxpayers deserve a return on their investment in the private sector. States across the country are demanding more transparency and accountability in public spending on corporate tax breaks, yet California lags
far behind. Twenty states, including our neighbors Nevada and Arizona, already require “clawback” provisions on tax subsidies.

SB 364 (Yee) will hold companies accountable for the public money they take in tax breaks. The state will be able to collect penalties from companies that eliminate jobs while taking job-creation tax breaks. Corporations with more than 100 employees that claim tax breaks with the goal of job creation will be required to annually report to the Franchise Tax Board the number of current employees on their tax returns. If a company reduces their workforce by more than 10 percent in a year, then they are subject to a penalty of $5000 for each full-time job lost beyond the 10 percent. This percentage allows for a normal fluctuation in workforce due to the business cycle without any penalty.

The more jobs the company eliminates, the greater the penalty they pay. Taxpayers will no longer have to subsidize the elimination of jobs and the state
can redirect the penalty fund toward real job creation programs that California so urgently needs.

Click here to download the Corporate Tax Accountability fact sheet.

 

Rewarding Companies for Worker Retention


With an unemployment rate stuck at 12.5%, working people in California face the bleakest economy since the Great Depression. We have over two million Californians out of work. Last year alone, the state Employment Development
Department (EDD) paid out an unprecedented $22.9 billion in unemployment benefits. Workers who have lost jobs are finding it nearly impossible to find new ones. The number of long-term unemployed doubled last year to 880,000. Over 40% of the unemployed have been out of work more than six months. This is
catastrophic for our economy as these families cannot keep their homes, cannot put money into the economy, and in many cases, are forced to depend on the safety net.

In tough budget times, there is little the state can do to preserve good jobs. One effective tool is through bid preferences to incentivize worker retention. Bid preferences allow state and local decision makers to target public funds to where
they will do the most good. It creates an effective and inexpensive investment to reward companies for doing the right thing. When cities and counties contract for services like garbage and recycling, they are often focused only on the costs of the bids and the services provided. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

Families simply have no safety net when they lose these good jobs. The last few years, workers have exhausted their savings and nearly half have negative equity in their homes. California families are strained to the breaking point. The layoffs of the existing workforce hurt individual families, but also impact the local economy. Promoting a stable workforce allows workers to invest in and contribute to
their communities. It means people can stay in their homes, kids can stay in their schools, and families can keep their health insurance. It also means fewer workers relying on unemployment benefits and other social service programs.

Beyond the benefit to existing employees, worker retention means higher quality of services from a capable and experienced workforce. This benefits the community as a whole while keeping families from falling into poverty.

AB 508 (Swanson) rewards companies who retain existing garbage and recycling employees for ninety days after a new contract takes effect with a 10% bid preference. This 90-day period allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for the possibility of a layoff. Existing law already provides such a preference in bids for transit services.

Download the Worker Retention Reward fact sheet.