Polling Question 1: What is the most important issue for job creation in California? 1. Improving state s regulatory climate 2. Increasing access to credit for small businesses 3. Retaining talent / developing more coherent immigration policy 4. Addressing job skills mismatch/retraining workers 5. Passing President s American Jobs Act
Polling Question 2: What is the biggest challenge California employers face doing business in the state? 1. High health-care costs 2. Current tax structure 3. Excessive regulations for businesses 4. Hiring qualified workers 5. High labor costs
Polling Question 3: What should our elected officials in Sacramento be giving top priority? 1. Incentives to promote manufacturing 2. Incentives for skilled immigrants 3. K-12 education reform / more emphasis in STEM fields 4. Reduce health-care costs 5. More competitive tax incentives to small businesses
Job market showing no sign of improvement Non-farm employment, California Absolute change, ths. (R) % change (L) Sources: Bureau of Labor Statistics, IHS Global Insight.
Unemployment insurance claims California, weekly average Initial Claims (L) Continuing Claims (R) Sources: U.S. Census Bureau, Moody's Analytics.
Unemployment rate California vs. United States California United States Sources: Bureau of Labor Statistics, IHS Global Insight.
Double-digit unemployment in 49 of 58 counties August 2011 (preliminary) Rank County Unemployment Rate 1 IMPERIAL 32.4% 2 YUBA 18.7% 3 MERCED 17.5% 4 TRINITY 17.3% 5 LAKE 16.6% 45 VENTURA 10.5% 46 MONO 10.3% 47 MARIPOSA 10.2% 48 SONOMA 10.2% 49 STANISLAUS 10.0% Source: California Employment Development Department.
Underemployment is significantly higher California, annual average Underemployment Unemployment Sources: Moody's Analytics, U.S. Census Bureau. *total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.
Underemployment rate California vs. U.S. California United States Sources: Moody's Analytics, U.S. Census Bureau. *total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.
Higher share unemployed for longer duration Unemployment by duration, California Source: California Employment Development Department.
Middle-skills gap indicates skills mismatch California, 2009 Source: National Skills Coalition.
Home-grown high-tech talent on the decline Recent S&E graduates per 1,000 civilian workers, California Sources: National Science Foundation, Milken Institute.
Heavy reliance on foreign-born tech talent STEM degree holders in California, 2009 Sources: U.S. Census Bureau, Milken Institute.
Mediocre academic performance for the average high school graduate Mean SAT score, top ten states and California, 2010 California ranked 35th. Note: Red line denotes the national average. Source: College Board.
Manufacturing diminishes in California Manufacturing share of total non-farm employment 57 53 44 Sources: Moody s Analytics, Milken Institute
Intel expands outside of California California vs. Oregon 11,900 jobs 15,500 jobs Source: Harris InfoSource.
Economy shifts towards services Professional and business services vs. manufacturing, California Prof. & business services 57 53 44 Manufacturing Sources: Bureau of Labor Statistics, Moody s Analytics.
California maintains higher employment concentration in various high-tech industries Industry LQ*, 2011 Motion picture and video industries 3.91 57 Telecommunications 3.74 Computer and peripheral equipment manufacturing 53 3.37 Audio and video equipment manufacturing 3.12 Other information services 2.75 Manufacturing and reproducing magnetic and optical equipment 2.55 44 Semiconductor and other electronic component manufacturing 2.19 Communications equipment manufacturing 2.15 Navigational, measuring, electromedical, and control instruments manufacturing 2.06 Scientific research and development services 1.77 Sources: Moody s Analytics, Milken Institute *A location quotient (LQ) is calculated by determining the share of employment in California, then dividing by the same ratio for the U.S. for each high-tech industry.
Are other states luring away high-paying jobs? Motion picture and video industries, California vs. U.S. 57 53 44 Sources: Bureau of Labor Statistics, Moody s Analytics.
Wage costs 5th highest in the nation Most expensive states, 2010 Rank State Index 1 New York 124.3 2 Connecticut 124.1 3 Massachusetts 120.6 4 New Jersey 118.7 5 California 115.1 6 Maryland 113.0 7 Virginia 108.1 8 Illinois 107.2 9 Alaska 105.7 10 Washington 104.9 Sources: BEA, Moody's Analytics, Milken Institute.
Tax burden 15th highest in the nation Most expensive states, 2010 Rank State Index 1 Alaska 256.1 2 Vermont 177.2 3 North Dakota 172.3 4 Hawaii 154.2 5 Wyoming 139.6 6 Delaware 137.3 7 West Virginia 136.9 8 Minnesota 134.7 9 Arkansas 133.9 10 Maine 125.3 15 California 116.1 Sources: U.S. Census Bureau, BEA, Milken Institute.
Tax climate among least favorable Major components of the state business tax climate index, 2010 Selected States Corporate Tax Index Rank Unemployment Insurance Tax Index Rank Property Tax Index Rank Total Rank Highest tax burdens New Jersey 41 25 50 50 New York 20 47 43 49 California 34 14 13 48 Lowest tax burdens South Dakota 1 35 11 1 Wyoming 1 27 35 2 Alaska 26 29 15 3 Source: Tax Foundation.
Electricity cost 9th highest in the nation Most expensive states, 2010 Rank State Index 1 Hawaii 285.5 2 Connecticut 183.1 3 Alaska 171.3 4 Massachusetts 162.9 5 New Hampshire 156.6 6 New York 153.0 7 New Jersey 149.5 8 Rhode Island 143.3 9 California 142.5 10 Vermont 134.9 Sources: Energy Info. Admin., Milken Institute.
California among least friendly toward small business Small business survival index, California rankings, 2010 Rank among states Index components (1 = Best, 51 = Worst) Personal income tax rate 49 Capital gains tax rate 50 Corporate income tax rate 42 Corporate capital gains tax rate 43 Property taxes 31 Sales tax 22 Unemployment tax 1 Health insurance mandates 42 Electric utilities 42 Workers' compensation 43 Crime rate 23 Number of government employees 7 Gas tax 51 State and local gov. 4-year spending trends 29 State and local gov. expenditures 47 Highway cost effectiveness 48 Overall Small-Business Survival Index 48 Source: Small Business and Entrepreneurship Council. Note: Includes District of Columbia
Lack of credit hurting small businesses Small Business Optimism Index, United States Net percent of firms reporting credit is harder to get Net percent of firms planning to add inventory Sources: National Federation of Independent Business, Moody s Analytics.
Government regulation impedes competitiveness State competitiveness index, California rankings, 2010 Rank among states Index components (1 = Best, 51 = Worst) Government and fiscal policy 47 Security 19 Infrastructure 46 Human resources 38 Technology 7 Business incubation 17 Openness 4 Environmental policy 32 Overall Competitiveness Index 29 Source: Beacon Hill Institute.
California s innovation and R&D assets are among its competitive advantages Milken Institute State Technology and Science index, Top ranked states, 2010 California ranked 4th Sources: Milken Institute.
California s position in technology and science, 2010 Source: Milken Institute.
2010 QS World University rankings Life Sciences & Medicine Of the eight U.S. universities that rank in the top 20 worldwide for life sciences and medicine, four are in California. Sources: Quacquarelli Symonds, Times Higher Education.
Technology transfer and commercialization index Top 10 Milken Institute rankings* Sources: Association of University Technology Managers, Milken Institute. * Based on 2005-2007 data from the Association of University Technology Managers (AUTM)
Port activity continues to support recovery California, annual growth Exports Imports Sources: California Department of Finance
California represents larger share of exports to Asia California vs. U.S., 2010 34.9% 21.3% Sources: U.S. Census, Milken Institute. California U.S.
Infrastructure investment stimulates job creation Jobs created per $1 billion investment Sources: Bureau of Economic Analysis, Milken Institute (Jobs for America).
Lt. Governor s agenda for economic growth and competitiveness 1. Gear Up Exports 2. Reinvigorate Manufacturing 3. Drive Innovation 4. Accelerate the Clean Economy 5. Skill Up for Opportunities 6. Build Infrastructure 7. Align with Regional Strengths 8. Organize for Success
Most venture capital investment went to CA Top 10 states, Q2 2010 vs. Q2 2011 Q2 2011: California received 50 percent of total U.S. venture-backed investments. Average dollar amount per deal in California was $9.3 million vs. $9.8 million in Q2 2010. VC investments in California decreased by 7 percent (year over- year). Sources: PricewaterhouseCoopers, National Venture Capital Association MoneyTree Report, Thomson Reuters.
California leads the way in clean technology Top venture capital states by number of companies, 2006 - June 2010 Overall clean-tech innovation Number of Rank State companies 1 California 227 2 Massachusetts 61 3 Texas 38 4 Washington 25 5 New York 21 Rank Renewable electricity Number of State companies 1 California 87 2 Massachusetts 22 3 New York 11 4 Texas 9 5 Washington 8 California received 39% share of VC investments among North American companies ($654 million out of $1.69 billion) in Q2 2011. Source. Cleantech Group LLC.
California s cutting-edge industries Solar power Green vehicles Leader in fuel economy standards and registered hybrids, electric and natural gas-fueled cars. Los Angeles and San Francisco are the top U.S. hybrid markets. 38% of the nation s solar energy patent registrations. Fast-growing local demand for clean tech. Roof-top solar installations have doubled two years in a row. Life sciences clusters San Diego, Los Angeles and San Francisco are among top clusters. Strong player in genomic medicine and photosynthetic algae technology Leader in venture capital investments 58% of all recent venture capital funds are in California 9 of the 11 biggest investments are in the state Major player in clean-energy investments. Next generation of high-tech industries First in semi-conductor research Pouring resources into green ventures Example: digitized energy grid Ultra-high-def video conferencing Sources: Time, PricewaterhouseCoopers, National Venture Capital Association, Thomson Reuters, Tesla, Milken Institute.
Present infrastructure points to promising future High-speed rail The California high-speed rail will travel between Los Angeles and San Francisco in under 2 hours and 40 minutes. It will create 600,000 construction-related jobs. Busiest ports The ports of Los Angeles and Long Beach are the busiest container ports in America. The port of Los Angeles handles almost 190 million metric revenue tons of cargo annually. Excellent airports Almost 56 million passengers travel through LAX each year, making it the world s seventh-busiest airport. Safe drinking water Orange County s water recycling system is the largest project of its kind in the world. It generates enough safe water to meet the needs of 500,000 people. Sources: California High Speed Rail Authority, The Port of Los Angeles, Airports Council International, Association of California Water Agencies.
5 Pillars to Drive Economic Recovery Lower Regulatory and Litigation Costs Maintain Stability and Certainty Fair Taxes Invest in Public Works Worldclass Education 2011 Chevron