Study: California taxes, regulation blamed on lost jobs

The state of California lost more than a fifth of its manufacturing jobs between 2000 and 2007, according to a new study by the Milken Institute, which cited the state’s onerous regulations and high taxes.

The report, entitled, "Manufacturing 2.0: A More Prosperous California", compares California’s performance and policies to those of seven “peer” states—Arizona, Indiana, Kansas, Minnesota, Oregon, Texas and Washington—chosen for their increasing share of U.S. manufacturing jobs and production, especially in high-tech manufacturing.

According to the report, California’s employment in this high-wage, high-skill segment is down 23 percent from 2000 levels, as opposed to declines nationally of 19 percent and the peer states’ average of 16 percent. In fact, from 2003 to 2007, encompassing the recovery of the high-tech sector, the peer states gained 24,000 high-tech manufacturing jobs while California lost almost 16,000.

The report’s preparation was sponsored, in part, by the California Manufacturers and Technology Association, which lobbies for state policies to protect and increase the manufacturing sector, ranging from more vocational education to regulatory reform.

Among the report’s recommendations are streamlining regulatory procedures, more coordination among public agencies, private-public partnerships, encouraging students to pursue technical educations, and creating “incubation centers” to encourage manufacturing.