Transcript Empowering Manufacturers to Lead the Way Presentation California Manufacturers & Technology Association California employment snapshot: Low-wage sectors expanding, High-wage sectors declining Average Employment change 2005 salary.

Empowering Manufacturers
to Lead the Way
Presentation
California Manufacturers & Technology Association
California employment snapshot:
Low-wage sectors expanding, High-wage sectors declining
Average Employment change
2005 salary Jan. 2001- Jan. 2006
Construction
Accomodation and Food Services
Finance and Insurance
Government
Retail Trade
Educational Services
Real Estate
Arts, Entertainment & Recreation
Professional & Technical Services
Other Services
Wholesale Trade
Health Care & Social Services
Administrative & Waste Services
Farm
Mining
Transportation and Warehousing
Management of Companies & Enterprise
Information
Manufacturing
$43,913
$16,566
$80,074
Average pay of
growing sectors:
$39,862
$28,900
$40,644
$56,669
$42,781
$70,832
$23,875
$54,289
$42,225
$29,626
$20,752
$88,556
$44,145
$75,452
$78,682
$56,524
Average pay of
declining sectors:
-372,400
-400,000
-300,000
-200,000
-100,000
0
100,000
Jobs lost Jobs gained
Source: California Employment Development Department
200,000
Manufacturing as a percent of overall employment in state
has declined steadily since 1990
14 %
2006
9% of overall employment
1,504,200 mnfg. jobs
12
1990
14% of overall employment
1,970,200 mnfg. jobs
10
8
1990
1995
2000
2006
California lost 374,000 manufacturing jobs
since January 2001
1.9 million
1.8
Jan. 2001:
1.878 million
1.7
March 2006:
1.504 million
1.6
1.5
1.4
‘01
‘02
‘03
‘04
‘05
‘06
Source:
Labor
Market
Information
Department
Why Manufacturing Matters
• High Paying Jobs
• Creates Wealth
• Most Export Intensive Sector
• High Investments in R&D
• Ripple Effect
Based on large multiplier effect,
manufacturing supports
4.5 million jobs
almost 30% of California’s labor force
More than
1,000
California suppliers
Shasta
Mendocino
Nearly
Nevada
Sutter
Placer
20,000
El Dorado
SonomaNapaYolo
Amador
Sacramento
NUMMI
suppliers
by county
Solano
Calaveras
San
Marin
Tuolumne
Contra Costa
Joaquin
San Francisco Alameda
NUMMI
San
Stanislaus
Fremont
Mateo Santa
Merced
Clara
Santa
Madera
Cruz
San
Fresno
Benito
Tulare
Monterey
jobs created in state
1-19
San Bernardino
Santa Barbara
20-99
100 or more
Ventura Los Angeles
Orange
Riverside
San Diego
Manufacturers
fund 60%
of California’s
R & D Investment
$60 billion
$50
Manufacturing
$41.8 billion
$40
$30
$20
$10
0
Federal govt.
$11.8 billion
Non- profits
$366 million
State & Local govt.
$236 million
Universities
$821 Million
Source:
American
Association
for the
Advancement
of Science
Why Manufacturing is an integral part
of the capacity to innovate
Skilled
workforce
Knowledge:
Patents
Machinery
Manufacturing
GROWTH:
Revolves around the combination
of knowledge, labor, and production
High cost of doing business for
California manufacturers
Cost average = 100
More than 115
100 to 114
California:124
Source:
Milken Institute
85 to 99
Less than 85
Western states cost index
One of only four states with a sales tax
on manufacturing equipment
Overall cost
Wage
Tax
Electricity 80% more expensive
than western states
Industrial space
Office space
Electricity
California
124.2
112.5
111.1
136.8
136.3
168.0
Nevada
Washington
103.8
103.5
96.5
105.7
99.0
103.4
107.5
110.2
131.5
130.5
122.7
82.6
New Mexico
95.6
82.0
130.8
103.1
80.5
93.8
Arizona
Texas
Oregon
94.0
92.8
92.6
93.5
98.0
91.1
95.8
73.7
92.3
85.4
93.0
106.4
105.8
95.7
107.7
95.1
100.0
84.0
Utah
86.8
83.0
107.4
80.2
101.3
71.5
Source: Milken Institute
Survey: What state has least favorable business climate
0
10%
20%
30%
40%
50%
2005
California
Massachussetts
New Jersey
34%
22%
22%
21%
21%
2002
57%
California
36%
New York
Massachussetts
New Jersey
1999
California
New York
Massachussetts
New Jersey
66%
34%
New York
60%
said
California
was one of
the worst
three states
to do
business in
2005
18%
15%
25%
29%
19%
14%
Development
Counsellors
International
survey
Changing Face of Manufacturing
• Aging of Baby Boom Generation
• More Productive Workers
• Different entry-level skill requirements
– Basic computer skills
– Business application knowledge
– Critical thinking skills
Change in labor productivity (output per hour),
manufacturing vs. all nonfarm workers
Percentage change
in output per hour
8%
California
manufacturing is
especially productive:
its value added per
worker in 2001 was
$191,000,
Manufacturing
7
All other sectors
6
5
4
16% higher
3
2
than national average
1
0
-1
1980
1986
1992
1998
2004
Source: U.S. Dept. of Commerce, Bureau of Economic Analysis
California no longer top exporter
$130 billion
Texas:
$129 billion
in exports
36% growth
since 2001
120
California:
$117 billion
in exports
9% growth
since 2001
110
100
90
‘01
‘02
Sources: Export.gov,
Office of Trade & Economic Analysis
‘03
‘04
‘05
State’s export
growth lags far
behind rest
of country
NV 177%
2001 to 2005
50% change from 2001
40%
TX 36%
30%
20%
US 24%
AZ 19%
10%
CA 9%
0
-10%
‘01
‘02
‘03
‘04
‘05
CMTA
workforce
survey
results
72 HR executives
representing
30,000 employees
completed
the survey
Employees most difficult
to recruit and retain*
Skilled workers
Entry level
Supervisory
Administrative
55
27
21
5
CMTA
workforce
survey
results
72 HR executives
representing
30,000 employees
completed
the survey
Barriers faced in finding and retaining
qualified employees*
Lack of job specific skills
Poor work ethic
Language barrier
Employees leave for better pay or benefits
Commute time
Employee dissatisfaction with work hours
48
34
25
21
14
11
CMTA
workforce
survey
results
72 HR executives
representing
30,000 employees
completed
the survey
Most significant business challenge
Respondents who ranked each as their #1 business challenge
Sustaining and/or acquiring a skilled workforce 24
Workers' compensation 14
Energy costs 11
Housing costs 9
Health insurance costs 7
Environmental regulations 8
Tax burden 4
Overtime laws 1
58%
said it was
one of top
3 challenges
NAM
skills gap
survey
results
Given changes in economy and business environment, which of the
following will be most important to your company’s business success over
the next three years? (select up to three)
74%
High performance workforce
New product innovation
Low-cost producer status
Increased customer service orientation
Increasing sales outside U.S.
Sourcing products in global markets
Supply chain integration with supplies
49%
45%
32%
20%
19%
14%
0
10%
20%
30%
40%
50%
60%
70%
80%
NAM
skills gap
survey
results
What types of employees are expected to be in short supply
Skilled production
Scientists and engineers
Unskilled production
Sales & marketing
Management & administration
Customer service
Others
None
80%
35%
25%
18%
16%
8%
5%
4%
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
NAM
skills gap
survey
results
Why do companies provide training to employees today
73%
Must train - it’s a business necessity
Raise the basic skills of entry level workers
Keep workers’ skills current with new technology
68%
59%
Attract new workers
Required by state/local government
Provision in labor contract
59%
0
10%
20%
30%
40%
50%
60%
70%
80%
How prepared for typical entry level job in your company
are applicants with high school/GED qualifications
NAM
skills gap
survey
results
Poorly
prepared
+500 employees
61%
under 500
60%
Adequately
prepared
+500 employees
39%
40%
under 500
0
10%
20%
30%
40%
50%
60%
70%
How prepared for typical entry level job in your company
are applicants with a certification from a two-year college
Poorly
prepared
+500
Adequately
prepared
+500
8%
under 500
19%
92%
81%
under 500
0
10%
20%
30%
40%
50%
60%
70%
80%
90%
California career tech education enrollment declines
while high school enrollment increases
2 million
1.8
1.6
High school enrollment
2005:1,915,370
1.4
48% increase since 1987
1,289,806
1.2
Career tech enrollment
1 million
2005: 644,909
952,097
-32% decrease since 1987
.8
.6
0
1987
1997
2005
Source: California Basic Educational Data Sytstem
Decline in number of
career technical education teachers
7,500
7,000
6,500
1988
6,922
teachers
Decline in number of
career technical courses
6,000
5,500
2005
5,000
4,923
teachers
4,500
1988
40,000
1997
2005
1988
38,402
courses
35,000
30,000
25,000
2005
24,141
courses
20,000
1988
1997
2005
New Opportunities
• Bio-Tech and Pharmaceuticals
• BioMedical Devices and Instruments
• Wireless Communications
• Advanced Materials
• Nanotechnology
• Space and Communications Satellites
Good Jobs Coalition
• Commission On Industrial Innovation
– AB 2860 (Lieu)
• Education and Workforce Training
• Level the Playing Field
Other Manufacturing Issues
• Sales Tax Exemption
– AB 2218 (Torrico)
• Global Warming
• Energy Supply and Cost
• Stay the Course on Workers’ Comp
Reforms
California employment snapshot:
Low-wage sectors expanding, High-wage sectors declining
Average Employment change
2005 salary Jan. 2001- Jan. 2006
Construction
Accomodation and Food Services
Finance and Insurance
Government
Retail Trade
Educational Services
Real Estate
Arts, Entertainment & Recreation
Professional & Technical Services
Other Services
Wholesale Trade
Health Care & Social Services
Administrative & Waste Services
Farm
Mining
Transportation and Warehousing
Management of Companies & Enterprise
Information
Manufacturing
$43,913
$16,566
$80,074
Average pay of
growing sectors:
$39,862
$28,900
$40,644
$56,669
$42,781
$70,832
$23,875
$54,289
$42,225
$29,626
$20,752
$88,556
$44,145
$75,452
$78,682
$56,524
Average pay of
declining sectors:
-372,400
-400,000
-300,000
-200,000
-100,000
0
100,000
Jobs lost Jobs gained
Source: California Employment Development Department
200,000