Abstract
Manufacturing currently provides high-paying jobs for nearly 10% of working Californians. However, between 1990 and 2003, the state lost almost 400,000 manufacturing jobs. Some believe that a significant portion of this loss in manufacturing base is attributable to statewide public policies that raise the cost of doing business in California. In this article, we offer a perspective on this issue by examining the following: (1) whether it is in California's best interest to pursue manufacturing jobs, (2) the factors blamed by many as responsible for the state's manufacturing losses, (3) what previous academic studies found as important to manufacturing location, and (4) the likely effect of California's business climate on its manufacturing investment. We also use "shift-share" analysis to document the strong tie between national trends in manufacturing and job losses in California, and identify state-specific components that point to the relative strength of most types of manufacturing in California. We conclude with a cautionary note to policymakers that this relative strength may not always continue. [PUBLICATION ABSTRACT]