CMA Capitol Insight: Feb. 17, 2015

February 17, 2015
Area(s) of Interest: Environmental Health Public Health 

CMA Capitol Insight is a biweekly column by veteran journalist Anthony York, reporting on the inner workings of the state Legislature.

Changes for California

Can environmental concerns be reconciled with a shortage of well-paying middle class jobs? How can we build an economy that will sustain our state’s values on combating climate change?

That is perhaps a central question for state, national and global policymakers in the 21st century, and it’s one that will loom large in California this year.

Senate leader Kevin de Leon unveiled a package of climate-change related bills that seek to dispel the popular political notion that jobs and the environment are warring political forces. But expect some major pushback from the state’s business community.

As the bills find their way into print, a new report says that cheaper, better robots will replace human workers over the next decade, pushing labor costs down 16 percent.

This is good news if you own a manufacturing plant, but maybe not so good if you have a manufacturing job.

We’ve seen how these trends play out in California, where our percentage of the nation’s manufacturing output has remained constant over the last several decades, but manufacturing jobs have plummeted as a percentage of the overall workforce.

The Associated Press reports, “The Boston Consulting Group predicts that investment in industrial robots will grow 10 percent a year in the world’s 25 biggest export nations through 2025. That’s up from 2 percent to 3 percent a year now. The investment will pay off in lower costs and increased efficiency.”

Robots will cut labor costs by 33 percent in South Korea, 25 percent in Japan, 24 percent in Canada and 22 percent in the United States.

The report estimates that currently, only about 10 percent of jobs that can be automated have already been taken by robots. Within another 10 years, the machines will have more than 23 percent.

“Depending on the industry and country, output per worker could rise by an estimated 10 to 30 percent over and above productivity gains that typically come from other measures,” the report states.

“As robots become more affordable and easier to program, smaller manufacturers will use them on a wider scale. This will greatly expand the market for robots and integrate them more deeply into industrial supply chains.”

The numbers are a good reminder that looking at manufacturing output is not enough to get the real story of what’s happening in our economy. We must also wrestle with the problem of how to cope with producing more by employing fewer people.

In 1990, at the end of the Cold War, the manufacturing industry was the leading employer in 37 states – including California.

Fifteen years later, a plurality of states — 22 in all, including California — had retail trade as their largest sector. By 2005, just 15 states had an employment sector that was manufacturing based. Those states were all concentrated in the rust belt and deep South. The entire northeast and western United States had made the transition to retail.

By the time we get to 2013, we see the transformation of the country, and California, into Health Care Nation. As of 2013, 37 states had health care and social assistance as their biggest employer.

California is in the throes of significant change – but we are not alone. We are being carried by a national tide.

It also drives home another important point: We have an ever-larger portion of our pocketbooks and our economy tied up in the health care sector.

Rising health care costs threaten individual pocketbooks and government budgets alike. Medical bills are blamed for two out of every three personal bankruptcies, according to the New York Times. Just look at Governor Jerry Brown, who made controlling costs for retirees a platform in his January budget. This is largely a problem of rapidly rising costs in the health care sector.

But we also increasingly rely on this sector for jobs. Some of them, like nursing, require some training and are relatively well paid. Others pay wages that would be tough to live on in today’s California. 

Dealing with this economic transformation, while wrestling with increasing impacts from global climate change, will drive many of the policy decisions in California this year.

Meanwhile, here’s hoping science and common sense drive other decisions, namely new state rules about vaccinations and kids. Many schools don’t allow kids to bring peanut butter sandwiches to school, for fear of triggering other kids’ nut allergies. And yet, it’s fine to not have your measles or whooping cough vaccinations.

Go figure.

That may change, if a new bill by Sen. Richard Pan, M.D., is signed into law. In an unusual move, Gov. Brown has given early indication that he would support tightening the rules about vaccination requirements before kids enroll in public schools. Meanwhile, the anti-vaccination brigade is back in force, led by D-List celeb and foe of science Rob Schneider.

Dr. Pan is pushing for swift action on the bill as the measles outbreak in California continues to spread.


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