Press Release(s)

Manufacturers urge lawmakers to grow high wage jobs

Express alarm over lack of understanding of policy impacts on revenue-generating jobs

 Dec. 15, 2008 Sacramento, CA -- Today, the California Manufacturers & Technology Association (CMTA) and 24 other employer groups sent a joint letter to the Legislature insisting that economic stimulus must be the third leg of budget negotiations.

"We urge lawmakers to negotiate in good faith to resolve the budget crisis for the good of all Californians," said CMTA President, Jack Stewart. "A crucial part of the solution is understanding and building the foundation for a healthy economic recovery. We donít have that now."

Economic impacts must always take precedent in a state that leads the nation in bold government programs. The unintended consequences of previous policies and budget solutions have exacerbated the current emergency. California has reached an economic tipping point where current economic activity can no longer produce the revenues needed to sustain state spending.

The lack of focus on economic recovery in current budget negotiations is alarming. Lawmakers must understand that, in the coming months and years, this state will only thrive by growing the industries that create both wealth and high paying jobs -- such as manufacturing. That will in turn produce robust economic activity and new state revenue.

The state has already lost 25,000 manufacturing jobs through the first ten months of 2008 rounding out an unbelievable loss of a quarter of its industrial workforce since 2001.

"It is important that legislators focus on how spending cut and tax increases impact jobs and future economic growth," said Stewart. "For example, a sales tax increase would further discourage manufacturing investments. Because, unlike 47 other states, California applies full sales tax on the purchase of capital equipment. Our state's tax burden on business is already 20 percent higher than the rest of the country, along with overall costs that are 23 percent higher."

The coalition is simply asking that economic recovery guide budget decisions and that negotiators fully account for jobs and revenue lost or gained as a result of budget outcomes.

Abbreviated principles are as follows:

  • Sufficient business activity and a growing tax base is critical to reach California's public funding goals.
  • State policy and regulatory regimes for the future must be assessed in terms of their impact on overall economic development.
  • California must become more cost-competitive to retain and grow high wage jobs.

Link to letter

Media Contact: Gino DiCaro 916-498-3347

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